Will Joe Biden’s first big economic policy priority get tubed … by a Democrat? The incoming president endorsed expanding COVID-19 relief/stimulus payments from $600 per individual to $2000, an idea also pushed by a diverse group that includes both Donald Trump and Bernie Sanders. In fact, Sanders stepped up calls today for quick passage of the extra payment:
With little over a week before President-elect Joe Biden is inaugurated, some of his Democratic colleagues are pressuring him to prioritize coronavirus stimulus checks.
On Monday, Senator Bernie Sanders said the direct payments must be the Biden administration’s “first order of business.”
In response to Biden’s call for $2,000 stimulus checks, Sanders tweeted, “President-elect Biden is absolutely right. $600 is not enough for working class Americans who are struggling to pay the rent and feed their families. Our first order of business must be to pass $2,000 direct payments and major COVID-relief.”
And that’s pretty much been the assumption all along. Thanks to Trump, a significant number of Republicans ended up endorsing the expansion of the relief/stimulus payments, including now-former senators David Perdue and Kelly Loeffler, both of whom were caught out by Trump’s late attempt to force the change in the relief bill.
One senator still wants to exercise some fiscal restraint — or more accurately, wants more targeted aid. Democrat Joe Manchin remains opposed to the proposal, at least as currently floated, as a waste of resources. He told Jake Tapper on CNN’s State of the Union yesterday that he hadn’t changed his mind about the expanded payments based on current eligibility:
MANCHIN: There’s a lot we can do to put people back to work.
TAPPER: So, yes on a big infrastructure bill, no on the $2,000 checks, because they’re not targeted enough. I only have a minute left, so I just want to do a…
MANCHIN: Well, if they’re targeted. No, if they’re targeted — if they’re targeted.
TAPPER: Yes. I… (CROSSTALK)
MANCHIN: If they’re targeted, I’m all for targeting the money.
TAPPER: Targeted — targeted, but not just anybody who makes under $75,000.
MANCHIN: Not carte blanche across the board.
I’m not sure that limiting it to $75K income in 2019 is “across the board,” but Manchin has a point. The knock on the payments, both in April and again in the past couple of weeks, is that people who have kept their jobs have gotten the money as well as those who lost their jobs. The former group doesn’t really need the cash, a point that’s hard to argue … on the sole basis of relief.
However, this money isn’t just intended for relief — it’s also intended for economic stimulus by encouraging people to engage in consumer activity. It’s the people who have an income that might be less tempted to back the cash and more likely to spend it on non-necessities. That has secondary effects that keep people employed and maintains the tax base for local and state services. Also, the problem with “targeting” is that there isn’t any good way to do that accurately and quickly, not without dragging the process out for a few months — by which time it might be too late for the stimulus effects, and for the small businesses that might have benefited from more consumer activity.
Investing that money in infrastructure projects sounds like an option, but it rarely works out very well, either. That was the main principle behind the 2009 stimulus package in our last major economic crisis, but the “shovel ready project” spending did little to expand employment or consumer activity. At best, it just shifted scheduling for already-funded public works projects, almost all of which involved road construction. Remember the ARRA signs? They were almost exclusively found on highways, and on projects that would have taken place with or without that cash. It turned into a shell game to benefit states with big budget holes, and didn’t have any real stimulating impact. The economy had already gone into recovery months before any of those dollars got spent on those road projects.
Can Manchin hold up the expanded payments? Perhaps initially, but it’s far from certain that there are enough opponents to the idea to sustain a filibuster on it. Manchin will play a key role in gatekeeping crazy ideas from becoming policy in the Senate, but this idea already has some broad support with or without him. It would be a bit ironic, though, if Manchin ended up obstructing Biden’s first big economic policy. Tough to blame Republicans in that instance.