A growing bipartisan backlash is emerging against the possibility that Congress would lower the income eligibility for proposed $1,400 relief checks, reducing or eliminating benefits for many middle-class households.
Like previous relief payments, President Joe Biden’s American Rescue Plan would begin phasing out cash payments for individuals earning more than $75,000 a year and married couples earning $150,000 a year.
But the White House and several Democratic lawmakers have expressed openness to lowering the income threshold for the drawdown of benefits to $50,000 a year for individuals and $100,000 a year for a married couple.
Now a number of lawmakers from both parties have begun pushing back on the suggestion. Reps. Lisa Blunt Rochester (D-Del.) and David McKinley (R-W.Va.) introduced legislation on Friday that would deliver the cash payments to families and phase them out at the original income thresholds of $75,000 for individuals and $150,000 for married couples.
“Today’s weak jobs report highlights how American families are struggling and need immediate relief,” McKinley said in a statement. “By providing a third round of individual relief, millions of American families would receive the help they need.”
“I’m proud to, once again, join with Representative McKinley to make clear that providing direct relief to the American people shouldn’t be a partisan issue,” Blunt Rochester said in her own statement accompanying the bill.
Both McKinley and Blunt Rochester enjoy unique influence because of the states they represent. Blunt Rochester, Delaware’s sole representative in the House, is a close ally of Biden, a fellow Delawarean.
And McKinley’s perch in West Virginia means he shares a constituency with Sen. Joe Manchin (D-W.Va.), whose support Democrats need to pass a bill of any kind. Manchin, the most conservative Democrat in the Senate, has expressed more skepticism of the relief bill’s price tag and benefits for so-called higher earners than either McKinley or Republican West Virginia Gov. Jim Justice.
When it comes to relief payments, the political stakes are especially high for Democrats, who flipped two Georgia Senate seats in January based on a promise of delivering cash aid to families that then-Senate Majority Leader Mitch McConnell (R-Ky.) had held up. Democrats vowed to bring the total aid to these households up to $2,000 a person by supplementing a payment of $600 that Congress approved in December with another $1,400 check.
Sen. Jeff Merkley (D-Ore.) warned Biden against tinkering with the income thresholds in an interview with The Intercept that came out on Friday. “I would advise [Biden], if he were to ask me, that is not the place to compromise, that if you want to see us lose a Senate race in Georgia in two years, then modify the promise made — break the promise made during the Georgia runoff,” Merkley said.
Sen. Jon Ossoff, one of two Georgia Democrats whose victory in January flipped control of the Senate, also indicated his preference for keeping income thresholds as they are.
“I want this package to be as ambitious as possible. I was sent here to fight for major COVID relief,” Ossoff told HuffPost. “I was sent here to fight for stimulus checks for Georgia families. And I don’t want to see any reductions in the help that we’re sending to people.”
Likewise, Democratic Sens. Elizabeth Warren (Mass.), Cory Booker (N.J.) and Chris Murphy (Conn.) all told HuffPost they prefer a phase-out that begins at individuals earning $75,000 a year and married couples earning $150,000 a year.
“I’m a state where $100,000 doesn’t go as far as a state like Louisiana,” Murphy told HuffPost. “So I’d rather keep the threshold where it is.”
Rep. Alexandria Ocasio-Cortez (D-N.Y.), perhaps the most famous progressive in the House, joined the fray on Friday afternoon as new reports emerged of a push to impose stricter means-testing.
“Millions are on the brink of eviction. Give too little and they’re devastated,” she told her 12 million followers in a Twitter thread panning the lower income thresholds. “Give ‘too much’ and a single mom might save for a rainy day. This isn’t hard.”
The complexities of the congressional debate over cash payments reflect the peculiar nature of the drawdown formula. Currently, the cash payments are set to decline 5% for every dollar above the income threshold that a person earns ― reducing payments by $50 for every $1,000 above the cutoff.
As a result, larger checks end up going to a bigger group of earners than smaller ones. For example, the $600 check sent to families in December reached fewer families than the $1,200 checks Congress sent out in March, because it phased out faster above the income threshold.
Barring any changes then, checks of $1,400 would, by default, go to a slice of higher earners than the first two rounds of cash relief. The new bill also provides $1,400 for every dependent in a household, potentially enabling even some upper-middle-class households with numerous children to receive benefits for which they were previously ineligible.
To address concerns about sending benefits to families on the higher end of the earnings spectrum, Biden, Manchin and even some progressive stalwarts like Senate Budget Committee Chairman Bernie Sanders (I-Vt.) are openly entertaining the idea of lowering the income threshold for the phaseout to $50,000. Even if Congress set the phaseout threshold at $40,000 a year for individuals, a small percentage of households with annual incomes of $390,000 a year would get cash payments, according to an analysis by the conservative Tax Foundation.
But some economists, activists and now lawmakers worry that the price of excluding more middle-class families ― some 10 million of them, per the nonpartisan Tax Policy Center ― far outweigh the dangers of sending money to high-earning households.
“There is a large chunk of the income distribution that got $2,000 from Trump, $600 from Trump, and then will get $0 from Biden,” University of Utah economist Marshall Steinbaum warned on Twitter.
Critics have also noted that unless Americans file their tax returns for 2020 prior to the bill’s passage, the federal government will assess their cash payments based on their income in 2019. Many Americans have experienced sudden declines in their earnings since the onset of the COVID-19 pandemic in March.
These arguments may resonate with Biden, who has repeatedly emphasized his commitment to an ambitious relief bill.
“We can’t do too much here,” he said before a meeting with House Democrats on Friday. “We can do too little.”
Kevin Robillard contributed reporting.
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