Another View: Don’t mortgage our kids’ future with more debt
We all want to help people who are struggling in the COVID-19 recession through no fault of their own. That’s why I voted in March for the $2.2 trillion CARES Act, knowing we had to act decisively to avert a financial crisis but also realizing something passed that hastily would be far from perfect.
The result was a massive spending bill that distributed financial relief in a shotgun approach throughout the economy. But even though Congress authorized more than $3 trillion in four bills, people and businesses truly needing help were still left behind, and hundreds of billions of dollars (no one knows the exact amount) were provided to those who didn’t need help at all.
The economic impact payments to individuals are a prime example. At the worst point of the COVID-19 recession, total employment was down 25 million, but we sent relief checks totaling $275 billion to 166 million people.
According to the Federal Reserve Bank of New York, the median payment per household was $2,400, and only 18% was used for essential spending. The remainder was spent on nonessentials (8%), donations (3%), savings (36%) and debt payment (35%).
Nine months later, Congress authorized $600 per-person direct payments without tightening eligibility, and the House passed a bill increasing that amount to $2,000 per person, which would send $8,000 to a four-person household.
Since I arrived in Congress in 2011, federal debt has almost doubled, from nearly $15 trillion to more than $27.5 trillion. The passage of $900 billion in additional relief, combined with a $1 trillion projected deficit for fiscal 2021, will increase federal debt to over $29 trillion. Unfortunately, few in Congress seem to care.
Without targeting, $2,000 per-person payments will add $464 billion to the debt burden we are placing on our children. By effectively targeting relief, we can help those in need and minimize how much we are mortgaging our children’s future.