More money. Sen. Kamala Harris backs new plan for financial help in coronavirus pandemic
So the idea of a government cash payment or two doesn’t seem enough? Sens. Kamala Harris, Sherrod Brown and their Democratic colleagues want to keep the checks coming as long as the economy remains stuck.
Harris, a California Democrat, told McClatchy she supports a plan authored by Brown, an Ohio Democrat, that would provide two immediate payments and then quarterly payments as long as the economy remains in turmoil.
Nineteen Democrats, including Minority Whip Richard Durbin, D-Illinois, have endorsed the idea.
The White House and congressional leaders Monday are considering a cash payment that would probably be made once. They had hoped to unveil a massive economic stimulus plan that included the payments, but disputes over other provisions have stalled any action.
The most likely outcome for this bill is a one-time payment of up to $1,200 per taxpayer, plus $500 per child.
The amounts would be reduced for single taxpayers with more than $75,000 in adjusted gross income and $150,000 for joint filers, and phased out entirely for individuals who earned more than $99,000 and joint filers making more than $198,000. It was unclear what income would be considered for eligibility.
Democrats, though, continue to consider several plans. Under the cash payment proposal backed by Brown and Harris, every lower and middle income adult, child or non-child dependent, including those receiving Social Security, veterans or Supplemental Security Income benefits, would get $2,000 right away. The amount would drop as incomes increased and phase out at the highest incomes.
If the public health emergency continues into July, or unemployment is at least a percentage point higher than the December to February average, there would be another payment of up to $1,500 per person.
In addition, the federal government would provide $1,000 each quarter if the economy remains in turmoil and unemployment stays high.The payments would then continue each quarter until unemployment falls to within half a percentage point of December-to-February jobless levels.
In the House, there are similar efforts to push this idea and others. Rep. Pramila Jayapal, D-Washington, co-chair of the Congressional Progressive Caucus, is leading a bid to guarantee immediate, monthly payments of up to $2,000 per income-eligible adult and another $1,000 for families with children for up to six months.
If needed, the payments could be extended another six months.
California could benefit somewhat more than other states from an ongoing cash payment, said Chris Hoene, executive director of the California Budget & Policy Center, which works on strategies to help low and middle income people..
Because of the state’s size, he said, it has a disproportionate impact of the nation’s economy. And because housing affordability is a challenge in many parts of the state, the ongoing aid could be particularly helpful, he said.
There is skepticism about the value of such any such payments, whether once or twice or periodic, as many economists have long argued they provide only a quick boost and not a sustainable income.
In 2008, as the Great Recession was worsening, the federal government created a tax rebate program with the same aim as the one being discussed now.
Single people could get between $300 and $600, depending on income, while those filing jointly could get $600 to $1,200. Parents with children eligible for a Child Tax Credit could receive another $300 per child.
All this became phased out for single people earning more than $75,000 and married couples making more than $150,000.
People got the money either by cash deposited in their accounts or by mail.
It turned out to be a temporary fix at best. The National Bureau of Economic Research,a nonpartisan economic analysis firm, found “Putting cash into the hands of the consumers who use it to save or pay off debt boosts their well-being, but it does not necessarily make them spend. In particular, low income individuals were particularly likely to use the rebate to pay off debt.”
The current economic downturn is different, most economists and lawmakers said.
“This is a crisis of a very different magnitude,” Harris told McClatchy.
“This is a survival bill, not a stimulus bill,” added Michael Graetz, professor of law at Columbia University.
He would rather see the nation’s patchwork unemployment system be improved so that it serves more people out of work. But that won’t be happening anytime soon.
So while “I don’t believe cash payments are well targeted, they are the only alternative to get money to people who need it,’ said Graetz, co-author of “The Wolf at the Door: The Menace of Economic Insecurity and How to Fight It.”
Analyst Ben Ritz did not think that because unemployment rates before the downturn were historically low, even an uptick to a still-low 4% could mean payments in the future.
But, “the general principle in the bill is sound,” said Ritz, the center-left Progressive Policy Institute’s Center for Funding America’s Future.
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