Stimulus for the well-off

As President Joe Biden and the Democratic-majority Senate move toward final passage of a covid relief package, a key question has been how far they would be willing to go to make sure that cash payments go only to the neediest people. The answer began to emerge Wednesday, and unfortunately, it appears to be “not very far.” The White House and Senate Democrats have converged on a plan that would trim a House-approved plan somewhat but still enable stimulus payments to reach millions of upper-middle-class individuals and households. In addition to being unjustifiable as a response to the covid crisis, showering public money on those who don't need it would further commit the governing party to a mistaken concept of progressive policy.

The revised plan would provide $1,400 to individuals earning up to $75,000 per year and at least some money to those making up to $80,000. For couples, the corresponding figures are $150,000 and $160,000. This is indeed an improvement, in terms of careful “targeting,” over the House's plan. Yet this still means that government cash will flow to all but roughly the top quarter of the U.S. income scale.

Even in a cheap-interest world, government resources are not limitless and trade-offs are still real. Funds Congress spends padding the bank accounts of people who aren't poor, or even close to poor, are funds that won't be available for other purposes.