USA TODAY International Edition
Our view: Add $ 1,400 to checks, but target those most in need
As the coronavirus plague drags on into the new year, more Americans are falling into financial distress. A 2020 spike in the poverty rate was the largest in six decades. Twenty million people are jobless, with more than 800,000 filing unemployment claims each week. Consumer confidence and spending, personal income and home sales are all in decline. And food banks across the country are overwhelmed.
It’s appropriate, then, that Congress passed, and President Donald Trump signed, a relief measure containing $ 600 payments for most Americans on top of the traditional safety- net programs. Those checks started going out this week. Now the question is what to do about Trump’s belated demand, endorsed by congressional Democrats and some Republicans, to tack on $ 1,400.
The answer is to more carefully target any future one- time payments to Americans who truly need them, while being mindful of the federal government’s exploding debt.
It’s a balancing act, to be sure. A round of $ 1,400 payments would add $ 464 billion to the $ 900 billion rescue package approved by Congress shortly before Christmas and signed by Trump after nearly a week of dithering. That package included small business assistance and enhanced unemployment benefits.
The Congressional Budget Office forecasts the cost of fighting the pandemic will cause the federal debt next year to exceed the size of the entire American economy for the first time since the end of World War II. Generations will be saddled with paying it down. There is no such thing as free money.
At the same time, however, government borrowing costs have never been lower, the economy needs stimulus and America is in the deadliest health crisis in 100 years. Extraordinary problems require extraordinary responses. The time for fiscal restraint is when times are good, not in the middle of a national emergency.
After lavishing corporations with tax cuts early in Trump’s presidency, many congressional Republicans are newly reborn deficit hawks who oppose raising the payments to $ 2,000. And Senate Majority Leader Mitch McConnell introduced poison- pill legislation Tuesday that includes the sought- after payments but links them with two other provisions demanded by Trump that Democrats almost certainly will oppose: taking away liability protections for Big Tech firms and opening an investigation into the president’s unfounded claims of election fraud.
That could end the matter of hiking relief checks to $ 2,000. Indeed, McConnell said Wednesday that the House- passed measure endorsed by Trump has “no realistic path to quickly pass the Senate.” But, if not in this Congress then in the next one, there’s room for compromise, specifically by tightening means testing for the remaining $ 1,400 and increasing the phase- out rate for higher earners.
As it stands now, under the measures the House passed Monday, individuals earning up to $ 115,000 a year would still receive some money, as would a married couple with two children earning up to $ 310,000, according to figures provided by Marc Goldwein, senior vice president and senior policy director of the nonpartisan Committee for a Responsible Federal Budget.
Those kinds of earners can do without another federal check.
For those earning less than $ 50,000, it’s a different story. By focusing on the lower income brackets and phasing out payments for higher earners more quickly, the government could save upwards of $ 100 billion on the additional $ 1,400 payouts. Recalculating eligibility should be possible in matter of days, so there shouldn’t be weeks of delay in sending out the balance of the full $ 2,000 in relief money.
These are tough calls. But they’re a way to be fiscally responsible with taxpayers’ money and still help those most in need during this crisis.