Automatic Stimulus Payments Tied to Economic Problems? Why It Could Happen.

Stimulus on Auto

Automatic Stimulus Payments Tied to Economic Problems? Why It Could Happen.

Following the onset of the coronavirus pandemic and the subsequent economic crisis, the government moved into action to pass relief, including the CARES Act in 2020 and later the American Rescue Plan a year later. But what if the delivery of aid didn’t require new legislation?

 

Following the onset of the coronavirus pandemic and the subsequent economic crisis, the government moved into action to pass relief, including the CARES Act in 2020 and later the American Rescue Plan a year later.

But what if the delivery of aid didn’t require new legislation?

 

According to Newsweek, the Economic Security Project has recently briefed staffers from the Senate Finance Committee on a concept called “automatic stabilizers,” which would “tie the issuance of expanded unemployment payments and stimulus checks to the state of the economy,” and make payments automatic when there’s a crisis. The same group has also briefed the White House on the same idea. The White House has endorsed automatic stabilizers when it comes to unemployment insurance.

The idea is to quickly head off the possibility of future recessions and make aid automatic while insulating the process from political considerations.

"They understand that this is smart policy and good politics," Adam Ruben, director of the Economic Security Project, said of the Biden White House, in an interview with Newsweek. "Putting in place these kinds of triggers would smooth out the recovery and no one is left at the mercy of Washington gridlock in future recessions.”

The same organization has called for recurring stimulus payments until the pandemic is over.

“Let’s do this again. We are going to make this automatic,” Ruben said earlier this year of that proposal. “We are going to tie this to economic conditions so that people are not at the mercy of stagnation in Washington.”

At least 21 Senators, per Newsweek, support the proposal, although that’s not enough to get the bill through the Senate, much less overcome the filibuster.

Last July, the Economic Security Project issued an open letter from more than 150 economists, calling for such economic stabilizers to be passed into law.

“Many economists believe our response to the Great Recession was too small and too brief, slowing the recovery and causing preventable harm particularly to low-income people. Cash assistance is an important element of economic aid, injecting resources through direct stimulus payments and refundable tax credits into low- and middle-income households that need help and are likely to spend it,” the letter said.

“That will start a chain reaction to boost local businesses and increase economic activity. Continuing recurring payments until there is reliable evidence of an economic recovery — such as low and declining unemployment — will promote certainty for all sectors of the economy and for state and local governments and federal agencies.”

The letter also called for “extended and enhanced unemployment benefits; substantial aid to state and local governments; stronger SNAP benefits; robust child care funding and more.”

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.