Editorial: Stimulus checks: Too little for some, too much for many
Senate Majority Leader Mitch McConnell (R-Ky.), Shown on Capitol Hill December 15, negotiated with other Democratic and Republican leaders a $ 908 billion bill to ease the coronavirus.
Nearly a fifth of the $ 908 billion proposed in the long-awaited coronavirus bill of Congress will be sent direct to American taxpayers in the form of economic impact payments - checks for up to $ 600 per person . The $ 166 billion spent on these payments is the second largest item on the bill, followed by the $ 325 billion spent on loans to support small businesses.
And yet, according to some critics, the amount is nowhere near enough. "$ 600 isn't much for families," said author Don Winslow in a tweet that epitomized the pushback, "and ... the people who said it was" a lot "are detached from the pain of millions of Americans not helping in any real or meaningful way. "
Critics are right that the controls will only marginally affect some Americans' tax problems. At the same time, they will replenish the savings accounts of millions of Americans who have no problems.
This is because payments are the least efficient and the least targeted element of the bill. The full amount is available to individuals earning up to $ 75,000 per year and couples earning up to $ 150,000. At least a few dollars go to individuals with adjusted gross income up to $ 99,000 and couples with AGIs up to $ 198,000. That's about 85% of the population.
It's not a bad idea to put money out there in public when the economy needs a spark. But the economy, which recovered strongly in the summer to calm down in the last few weeks, does not need any impulses at this point. The public needs relief - not everyone, just the minority who have seen the pandemic most acutely.
Other parts of the bill will only help people in crisis, add and expand unemployment benefits, help tenants, and increase food stamp benefits. In addition, there are provisions that address other pandemic-related needs, including helping small employers, local bus and rail services, day care centers, schools and the postal service. There is also more than $ 50 billion to help distribute COVID-19 vaccines and run testing and tracking programs to try to contain the disease.
All of these programs are important, and in the case of unemployment benefits and rent support, the needs will almost certainly remain when the money runs out. Meanwhile, many state and local governments, whose efforts to slow the spread of the coronavirus have increased their costs and reduced their tax revenues, face significant budgetary constraints that could lead to massive layoffs. The latest relief bill will help these governments in certain ways - for example by covering some pandemic-related health care costs - but does not provide the scale or breadth of aid local governments have been desperately looking for.
The measure on Monday is therefore only temporary. The question is whether Congress will be ready to take action again next year to address the remaining issues - and those that will return after last aid expires.
At this point the signs are not encouraging. Republicans in Congress expressed more concern about the burgeoning federal budget deficit, which they showed no interest in, when they controlled both Houses of Congress and the Presidency. It is worth remembering that in the last recession, Republican opposition to stimulus measures after the US $ 800 billion Reconstruction and Reinvestment Act passed in 2009 contributed to sluggish economic growth.
If future funding is uncertain, you could argue that Congress should have carried out much larger controls to help people in the current crisis. However, given the poor direction of the program, larger checks would also mean more money going to people who don't need it. The perceived waste will only lend ammunition to lawmakers who do not want to provide any further assistance next year.
A better answer would have been to only give significantly larger checks to those with problems beyond the reach of the government's financial safety net - for example, lower-income Americans who have difficulty paying an unexpected auto repair bill or medical expenses. And that's really hard to do, especially if you're trying to get help out quickly.
The proposal presented on Monday is as unsatisfactory as any compromise, but the total amount of money is substantial. Given that Senate Republicans were willing to provide only $ 500 billion as recently as October (and much of that money was recycled from previous measures), the new bill is a welcome step forward. The next challenge will be to make sure that this is not the last step in the right direction.
This story originally appeared in the Los Angeles Times.
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