Who Gets a Relief Check? Biden Willing to Negotiate

Who Gets a Relief Check? Biden Willing to Negotiate

Printer-friendly version
Plus - Speeding the vaccines
Tuesday, January 26, 2021

Biden Announces Steps to Boost Covid Vaccine Supply and Improve Distribution

President Joe Biden on Tuesday announced new steps meant to speed the pace of coronavirus vaccinations:

* The federal government will increase weekly vaccine distribution to states from 8.6 million doses to 10 million doses for the next three weeks.

* The U.S. will buy another 100 million doses each of the Pfizer and Moderna vaccines, with delivery expected this summer. The additional orders raise the total number of doses ordered from 400 million to 600 million. “As a result of these actions, the federal government will have enough vaccine supply for the entire U.S. population by the end of the summer,” the White House said.

* The Biden administration will start providing states with estimated vaccine allocations for the next three weeks instead of just one week. The change is meant to help states plan their vaccination efforts and increase certainty around vaccine supply.

Biden Says He’s Willing to Negotiate on Covid Bill

Responding to concerns from lawmakers about his proposed $1.9 trillion coronavirus relief plan, President Joe Biden said Monday that he’s willing to discuss the size and scope of the bill — including eligibility for the $1,400 direct payments he’s proposed.

White House National Economic Council Director Brian Deese told CNBC Tuesday that Biden is willing to negotiate the value of the direct relief payments included in the bill, among other things. “When it comes to the checks, we put forward a proposal that ... passed the House with 275 votes — 44 Republicans voted for it,” Deese said, referring to the bill passed by the House in December. “Certainly, if there are ways to make that provision, and other provisions, more effective, that’s something that we’re open to, that we’ll have conversations about.

Biden also said Monday that he still hopes that a relief bill will pass with support from both parties, even as reports indicate that congressional Democrats are preparing to use the budget reconciliation process to advance a bill with or without Republican support. “I prefer these things to be bipartisan,” Biden said at the White House.

Biden said that he thought his current proposal, which is similar to the relief bill that passed the House with bipartisan backing, would earn support from both sides of the aisle, but he understood why some lawmakers might call for changes. “Because it was bipartisan, I thought it would increase the prospects of passage — the additional $1,400 in direct cash payment to folks,” he said. “Well, there’s legitimate reason for people to say, ‘Do you have the lines drawn the exact right way? Should it go to anybody making over X-number of dollars or why?’”

Talk, but talk fast: Biden added that he thought negotiations over the bill were just beginning. At the same time, he said he wanted to move quickly, and that he could not be sure that Republicans would support a bill in the end. “The decision to use reconciliation will depend upon how these negotiations go,” Biden said. “I don't expect we'll know whether we have an agreement — and to what extent the entire package will be able to pass or not pass — until we get right down to the very end of this process, which will be probably in a couple weeks.”

Vote as soon as next week: Senate Majority Leader Chuck Schumer (D-NY) said Tuesday that lawmakers could vote as soon as next week on Biden’s relief bill, possibly setting the stage for passage via reconciliation. “The work must move forward, preferably with our Republican colleagues but without them if we must,” Schumer said. “Time is of the essence to address this crisis.”

While Biden still talking about bipartisan cooperation, Democratic leaders are preparing to release a budget resolution as soon as next Monday, with votes coming later in the week, The Washington Post reported. The resolution would allow lawmakers to write a bill based on Biden’s relief proposal, and for it to pass with a simple majority.

Targeting relief checks: One of the complaints some lawmakers have about Biden’s proposal is that it would provide relief checks worth as much as $1,400 to most American households, including those earning over $100,000 a year, some of which may not need the help. A new report out Tuesday suggests that it may make sense to target lower-income households for relief, since they have been hit harder by the pandemic and are more in need of the money.

According to an analysis by Opportunity Insights, a nonprofit research group, data on the most recent round of direct payments indicates that relief payments have been treated very differently by households at different income levels: Those earning less than $75,000 a year have been more likely to spend them quickly, while those with income above that level have been more likely to save them, suggesting they don’t need the cash nearly as much.

“Targeting the stimulus payments to lower-income households would both better support the households most in need and provide a large boost to the economy in the short-run,” said economist John Friedman of Opportunity Insights. “These checks are really impactful for lower-income households.”

The Washington Post’s Heather Long, who wrote about the analysis Tuesday, spelled out the difference in cost and benefit for providing checks to higher-income families. “The price tag to send another round of checks to couples earning more than $75,000 and singles earning more than $50,000 would be $200 billion, yet the researchers estimate this group is only likely to spend $15 billion of that money — about 7 percent.”

The reason for the difference is pretty straightforward, Long says: For higher-income households, the recession is largely over. But for low-income households, the recession is more like a depression, with unemployment rates hovering near 20%.

“Low-income households have suffered by far the biggest economic shock,” Friedman said. “They need the help the most.”

The First Round of Relief Payments by the Numbers

The IRS has released a detailed breakdown of the more than $271 billion sent to Americans in the first round of “Economic Impact Payments” (more commonly known as stimulus checks). Some stats:

* Total payments: 161,943,888

* Total amount: $271,421,554,000

* Number of payments made electronically: 122,526,361 (about 76%)

* Number of payments sent by check: 35,837,168 (22%)

* Number of payments made by debit card: 3,580,359 (2%)

* Number of payments sent to taxpayers with adjusted gross income (AGI) between $100,00 and $200,000: 16,985,976

* Total amount of payments to those taxpayers: $40.2 billion

* Number of payments sent to taxpayers with adjusted gross income (AGI) of $200,000 or more: 412,372

* Total amount of payments to those taxpayers: $246.4 million

Investors Tell Washington: Don’t Worry About the Debt

With a growing number of lawmakers expressing concerns about another massive, deficit-financed Covid relief package and the historically large national debt, Politico’s Victoria Guida reports that Wall Street investors and others have a message for Washington.

“[I]nvestors in the federal debt, a wide range of market-focused economists and officials in the Biden administration have a firm response: Don’t worry about it right now,” Guida writes. “The debt poses no imminent danger to U.S. finances, they say, so the more pressing concern should be jump-starting the economy to avoid the type of sluggish recovery that persisted for years following the Great Recession.”

Guida dives into the arguments surrounding the growing debt, including fears among some analysts that ramped up Treasury issuance will result in higher interest rates that eat up a larger share of federal spending. But, she says, financial pros in the market for U.S. debt say that we remain far away from any tipping point where borrowing levels might spur troublingly high inflation or an outright debt crisis.

“More than a decade of historically low rates, coupled with surging demand for safe investments like U.S. Treasury bonds, ensure that Biden can probably spend as much as he wants to revive the pandemic-battered economy and concentrate on the debt later, despite new alarms being raised by Republicans in particular,” she writes.

Read the full piece at Politico.

Send your tips and feedback to yrosenberg@thefiscaltimes.com. Follow us on Twitter: @yuvalrosenberg, @mdrainey and @TheFiscalTimes. And please tell your friends they can sign up here for their own copy of this newsletter.

Views and Analysis