President Biden again shifted what he meant when he promised to send $2,000 checks “out the door” as he negotiates with Congress over his $1.9 trillion coronavirus relief package.
A proposal from Democrats floated on Thursday would provide $1,400 checks to those who make less than $50,000 a year, with partial payments to those above the threshold, according to the Washington Post. Biden’s first proposal called for sending full $1,400 checks to those who made up to $75,000 a year.
The change would lower the total cost to the government of sending out the checks and thus improve the odds of the bill getting through Congress and fulfilling Biden’s pledge. The $1,400 total, combined with the $600 checks enacted in the December legislation, would allow Biden to claim $2,000 in relief.
“I’m not going to start my administration by breaking a promise to the American people,” Biden told Democratic lawmakers on Wednesday after a group of 10 Republican senators met with Biden earlier this week and proposed a $600 billion bill that included just $1,000 checks to people who make less than $40,000 (or double if filing jointly) — and dropping checks completely for anyone who makes more than $50,000.
Biden said that deal was “way too small,” according to Senate Majority Leader Chuck Schumer.
But Biden has already prompted calls of deception after his proposal outlined $1,400 checks, not $2,000, with liberals on Twitter trending the hashtag #BidenLied before it was hijacked by pictures of pets and K-pop groups.
$2000 is not $1400. So @JoeBiden is either a liar or really bad at math. I am going with LIAR. #BidenLied https://t.co/DNKHHWrcIC
— Ryan Knight ? (@ProudSocialist) January 30, 2021
Press secretary Jen Psaki said Wednesday that Biden’s $2,000 pledge was meant to include the $600 checks Congress approved in December.
“There were $600 payments, as you know, in the $900 billion package passed in December — this is $1,400,” Psaki said. “Together, that’s $2,000, so it’s delivering on the promise that he’s made.”
Psaki said the White House expected the bill to change as it moved through Congress. “That’s part of the legislative process. So further targeting means not the size of the check — it means the income level of people who receive the check, and that’s something that has been under discussion,” she said. “There hasn’t been a conclusion, but he’s certainly open to having that discussion.”
Oxford Economics lead economist Nancy Vanden Houten told the Washington Examiner that she would be “surprised if there was a complete cutoff for individuals earning more than $50,000.”
Joe Brusuelas, chief economist at accounting firm RSM, told the Washington Examiner that the $1,400 checks were “absolutely critical for households down the income ladder where economic conditions resemble a depression and not the modest recovery in process for the middle class and upper two quintiles of income earnings.”
“We understand the optics around the idea of ‘targeted’ aid and the desire for a bipartisan legislative action, the economics of fiscal aid strongly suggest that there is no efficacy in such an approach,” Brusuelas said. “From a purely policy standpoint, the public would be better served by the administration and Congress flooding the zone with aid, in a similar fashion to what the Federal Reserve has done during periods of financial crisis over the past two decades.”
American Action Forum President Doug Holtz-Eakin pushed back against the need for direct stimulus, suggesting that no matter how much the government disburses, the public won’t be able to use it until widespread vaccinations give people confidence to spend money on leisure activities.
“The problem, in the end, is not that people don’t have income — in that if we just give them a lot of income in these stimulus items, then the spending will happen,” Holtz-Eakin said. “The problem is that people have put about a trillion and a half in the bank because people can’t go out and do things they want to do, which is go to restaurants, concerts, plays, and all sorts of services that are delivered in a person-to-person fashion, so you won’t get the stimulus if you just pump a lot of money in, and a lot of it will just sit in people’s bank accounts.”
Vanden Houten said that the checks “may not be the most efficient way to assist households hurt by the pandemic” but stressed that the speed at which checks can be deployed made them a vital component to a future deal.
“I would agree with those who say better to err on the side of doing too much rather than too little,” Vanden Houten said. “Some households will get payments they don’t need immediately, but we expect that money will add support to the economy through increased consumer spending over time.”
