The idea of just giving checks to nearly every American was, a week ago, on the fringes of Democratic politics. Doing so regularly was the central proposal for a presidential candidate who never won a single delegate before he dropped out of the Democratic primary race, Andrew Yang.
Yet with the coronavirus crippling the U.S. economy, sending it into a recession, it’s suddenly a likely policy plan.
On Tuesday, President Trump said he wants to send Americans checks, at least temporarily. The White House is even talking to Yang about his idea to pay people $1,000 a month more long term. Rep. Alexandria Ocasio-Cortez (D-N.Y.) supports it. There is a growing consensus among Republican senators, including some of the most conservative, that this needs to happen. Economists say it’s a fine idea, at least in the short term.
Here’s the case for the federal government just giving Americans money to get them through the coronavirus — and some of the cautionary pushback.
We don’t know. Sen. Mitt Romney (R-Utah) has proposed giving every American adult $1,000 at least once. “I’ve been asked, would this be every month? I don’t have the answer to that,” Romney told Utah reporters on Monday. That is not the same thing as Yang’s proposal, which would give Americans $1,000 every month indefinitely.
On Tuesday, Senate Republicans said they didn’t have an exact number to give. Nor did the White House.
But Treasury Secretary Steven Mnuchin said there would be probably be an income cap. “We don’t need to send people who make $1 million a year checks,” he said.
That’s another thing we don’t yet know. We do know that the White House wants money in people’s pockets ASAP to avoid a further slowing down of the economy. “We’re looking at sending checks to Americans immediately,” Mnuchin said “ … and I mean now, in the next two weeks. ”
But Congress has to sign off on spending this much money. Sen. John Thune (R-S.D.) said if this idea were to pass Congress, late April would be a target date for mailing checks.
Americans are hurting by the widespread cancellations of nearly everything in American life — and it’s only going to get worse. Restaurants, sports, entertainment, child care, travel, tourism and transportation are all massive industries affected by this virus. Coronavirus layoffs are already happening. And the cancellations have a ripple effect that will only reach more people with time.
“The main problem now is people are stuck in their homes, and they can’t afford child care, and they can’t buy groceries, and their checks are going to stop,” said Michael J. Graetz, a tax expert and law professor at Columbia University who was a top Treasury Department official in the Clinton administration. “Many businesses will continue to pay for people for a short period of time, but they are not going to pay people for a longer period of time. They will just let people go. ”
Another big argument for this once radical idea: This economic crisis is partly government-made. It’s governments that are asking Americans to stay home, buy less and avoid restaurants, Mnuchin said on Tuesday. In such a singular moment like that, the government owes it to Americans to help them pay their bills: “Hard-working Americans are impacted by government decisions,” he said. “That’s when the government has to step up to put money into the economy. ”
Some of the most liberal members of Congress agree the government has a responsibility to hand people money. Plus, writing checks to Americans will help more people than a payroll tax cut Trump wants (which only helps the employed or those who earn a salary, not tips).
Here’s Sen. Sherrod Brown (D-Ohio) and Ocasio-Cortez backing the idea the Trump administration is actively campaigning Congress for:
The pressure on family budgets is only going to get worse as we deal with coronavirus.
Congress should pass a bill sending every middle class and low-income adult an initial check for at least $1,000 ASAP. We can’t leave the hardest-hit Americans behind.
GOP & Democrats are both coming to the same conclusion: Universal Basic Income is going to have to play a role in helping Americans weather this crisis.@RoKhanna & @TimRyan’s proposal goes up to $6,000/mo depending on need. Mitt Romney just came out for a flat $1,000 universal. https://t.co/43d4AWK70u
Well, it’s extremely expensive. But the White House is okay with spending lots of money now. Mnuchin said Tuesday they proposed an overall aid package that would inject $1 trillion into the economy. (For comparison, that’s more than the 2008 Wall Street bailout or the 2009 stimulus bill to prop up the economy after the crash that ignited the Great Recession. Back then, Congress gave people tax rebates.) “In different times we will fix the deficit. This is not the time to worry about it,” Mnuchin said.
Sen. Lindsey O. Graham (R-S.C.) argues there are more vulnerable people who can be helped: He told The Washington Post’s Mike DeBonis on Tuesday his priority is “making sure people who get laid off keep getting their paycheck. ”
Graetz argues that a monthly dividend, like what Yang proposes, does raise the concern that some people might not enter back into the workforce after this is over. “I don’t think it’s a great idea to write checks to people indefinitely because I think able-bodied adults should be working,” he said.
But his real concern is that even a temporary injection of money risks papering over the real, systemic problems in the American economy that make it so workers don’t earn enough to weather a virus or terrorist attack or recession.
Graetz co-authored a new book about economic insecurity, “The Wolf at the Door — The Menace of Economic Insecurity and How to Fight It,” where he argues that unemployment protections don’t protect part-time workers or contract workers (who outnumber employees at some major tech companies). And wages even when times are good aren’t enough to allow people to pay for child care or save for a rainy day.
“We need to understand the window that this is opening on the problems that people are facing all the time when the economy goes south — or even when it doesn’t and you just lose your job through no fault of your own,” he said.
He added: “I understand Congress needs to address the short-term problems first, but I hope we don’t let a rampaging virus go to waste. ”
And right now, there is remarkable bipartisan unity on one answer to that rampaging virus: Give Americans money.
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