A growing number of congressional Democrats are calling for recurring stimulus checks until the coronavirus pandemic is over, in addition to the three direct payments sent out to millions of Americans within the last year.
Democrats are unlikely to rally support for the measure, as the party’s efforts to gut the filibuster will likely hit a brick wall. Sen. Joe Manchin (D-WV), a centrist, seemingly squashed the Democratic push to nix the legislative process in an op-ed piece for The Washington Post.
“There is no circumstance in which I will vote to eliminate or weaken the filibuster,” Manchin wrote. “The time has come to end these political games, and to usher a new era of bipartisanship where we find common ground on the major policy debates facing our nation.”
And Democrats would certainly face an uphill battle finding ten Republicans to stand behind the measure of the recurring payments, considering President Joe Biden received loads of pushback from the GOP for his $1.9 trillion rescue package, where Republicans argued it was too costly and didn’t provide enough targeted relief.
So, progressive Democrats have turned to Biden’s infrastructure and jobs plan to include stimulus for recurring payments, contending that the pandemic is far from over and that Americans need more immediate relief.
“We urge you to include recurring direct payments and automatic unemployment insurance extensions tied to economic conditions in your Build Back Better long-term economic plan,” the lawmakers wrote in a letter to the president.
Biden’s infrastructure plan, however, doesn’t include direct payments to Americans, as it instead, aims at rebuilding the nation’s roads and bridges and works to establish climate-friendly technologies. And Democrats are reportedly planning on passing Biden’s multi-trillion infrastructure and jobs bill through budget reconciliation, which wouldn’t require support from Republicans.
The letter, which didn’t mention specifics like the size and frequency of the payments, was signed by twenty-one senators, including Democratic Sens. Elizabeth Warren (MA), Cory Booker (NJ), and Kirsten Gillibrand (NY), along with Sen. Bernie Sanders (I-VT), all of which were led by Sen. Ron Wyden (D-OR).
Economists noted, however, that recurring payments would likely boost the national debt, which is on track to hit a record amount of $30 trillion this year after roughly $6 trillion in pandemic-related spending.
“Recurring payments, though no doubt be popular with certain interest groups, would enlarge what is already an outsized sea of red ink, albeit by an amount that could be considered small but only by the standard of the ocean-sized deficits already in prospect,” Milton Ezrati, chief economist for Vested, the New York-based communication firm and a contributing editor at The National Interest, said.
“Without an increase in revenues, any increase in spending would, by definition, increase deficits, and hence the national debt,” Patricia M. Anderson, an economics professor at Dartmouth College, said. “While stimulus payments would likely increase consumption, it seems unlikely that federal receipts would go up more than the spending, at least in the short run. Thus, I would expect an increase in the national debt.”
Anderson added, “That said, the impact on the debt is probably not what the main concern should be when it comes to fiscal stimulus. The main question should be whether it is needed.”
Democrats behind the push argue that millions of Americans are still struggling to pay bills and “put food on the table,” due to the economic impacts of the pandemic, as the unemployment rate reached double digits in April 2020, at more than 14 percent. The rate has slowly decreased, however, hitting six percent last month.
“This crisis is far from over, and families deserve certainty that they can put food on the table and keep a roof over their heads,” the lawmakers wrote. “Families should not be at the mercy of constantly shifting legislative timelines and ad hoc solutions.”
But economists suggested that the incentive to seek employment and get the unemployment rate down to pre-pandemic levels may diminish with recurring payments.
“At the low end of the income distribution, recurring payments would also discourage work,” Ezrati said. “Some employers are already complaining that they can’t get former employees to return to their jobs.”
Anderson also noted that she would “expect the incentive to seek employment to diminish. How this impacts unemployment typically depends on the state of the business cycle. When things are going downhill and jobs are scarce, there tends to be little effect of payments. The more plentiful jobs are, the more likely it is that diminished incentives for job search will increase the likelihood someone is unemployed.”
A recent poll released by Data for Progress revealed that 65 percent of Americans backed monthly $2,000 payments throughout the pandemic, and over two million people have signed a Change.org petition calling for them. Although polls indicated that Americans support the measure, progressive Democrats will likely face some intra-party divisions, considering less than half of the caucus in the Senate stands behind the initiative.
Progressive Democrats might be able to rally support for recurring payments if they propose tighter income-level qualifications, an issue that was in heavy debate over the third stimulus payment.
Anderson suggested that “automatic stabilizers,” might be a “good thing for U.S. policy.” These “stabilizers,” would enable “automatic triggers” such as increases in the unemployment rate to implement stimulus relief like higher or extended jobless benefits “in order to lessen the impact of a recession.”
“Recurring payments could be thought of as an automatic stabilizer, but I’m not certain that such an automatic program would imply the continuation of payments right now, when unemployment is half what it was at the peak of the pandemic and job growth last month was high,” Anderson said.
The federal government has already issued three direct checks to Americans including, $1,200 checks to those who qualify under the Cares Act, $600 checks in late 2020, and $1,400 payments that were featured in Biden’s rescue bill.
Rachel Bucchino is a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill.