The covid relief bill is moving rapidly toward completion, and one major question has now been resolved: President Biden has agreed to limit the amount of the stimulus checks in the bill by phasing payments out quicker for those at higher incomes. Here are the details:
It was always a little odd that it was moderates who wanted to make sure those at higher incomes didn’t get too much assistance, but the disagreement wasn’t so much about fairness and equity as it was about how aggressive Democrats should be in confronting the effects of the pandemic. Progressives wanted to do as much as possible, and moderates wanted to find ways to scale back the bill’s ambitions.
And since the checks are the most visible part of the bill, that was a good place for the moderates to come out for trimming it back. Never forget that moderate Democrats such as Sens. Joe Manchin III (D-W.Va.) and Kyrsten Sinema (D-Ariz.) are always on the lookout for high-profile ways they can disagree with their party, which helps them sustain their reputation for independence.
But it’s also probably the case that had Biden wanted, he could have held firm on the House’s numbers and the moderate Democrats would have gone along in the end. It’s implausible to think that Manchin or Sinema would have torpedoed the entire relief bill over this relatively minor question.
And it is relatively minor. A Democratic aide tells The Post’s Jeff Stein that the change reduces the total of checks being sent out by $12 billion. Which represents about six-tenths of 1 percent of the entire bill’s cost, or next to nothing.
It does mean, however, that some people who got stimulus checks from then-President Donald Trump won’t be getting them from Biden. You could argue that most of those people don’t really need the money, which would be fair — although eligibility is determined by the last tax return you filed, and many people lost income in 2020, which means they might need it now even if they were doing well in 2019.
It’s also true that most of the people who need help the most will be getting enormous benefit from this bill. Among other things, it extends supplemented benefits for those who are unemployed, increases the child tax credit and boosts the Earned Income Tax Credit.
But the point isn’t really whether you can find some people who would have gotten some stimulus under the House version but won’t get it now, and who never really needed it in the first place. Such people do exist. But what would we have lost if they had gotten assistance?
Not much of anything. They would have spent at least some of the money, recirculating it through the economy and helping the recovery. Overall, the amount they would have spent is less than that spent by low-income people, who have urgent needs and so will spend their stimulus checks immediately — but it would have been something.
And it’s not a zero-sum game. That $12 billion in savings isn’t getting pumped back into more stimulus for those at lower income levels. And as Rep. Pramila Jayapal (D-Wash.) argued, leaving anyone who got a check last time without one now is “bad policy and bad politics too.”
Progressives such as Jayapal want Biden and his party to be seen as the benefactors of a struggling country, coming to the rescue with a wallet opened as wide as possible. From their perspective, trying to cut back a few dollars here and there just undermines that claim, for a negligible reward.
I’m sure Biden would respond that the bill is still enormously generous, which it is. And he also likes to be seen as someone willing to negotiate and take into account the views of moderates and even Republicans. (Republicans wanted the stimulus checks to be reduced even further, so you could argue that the final bill will have moved slightly in their direction, even if they won’t support it.)
But this bill is already hugely popular. Cutting back the stimulus checks won’t make it any more so. And no senator would have been the victim of a vicious attack ad skewering them for allowing stimulus checks to phase out slightly more slowly for people in the middle- to upper-middle class.
In other words, Democrats could lose something with the change they’re making, both politically and for the economy. But they won’t gain much of anything.