Three Democratic chairs of the Senate’s major economic committees are urging President Biden to include repeat direct stimulus payments and automatic unemployment insurance extensions for struggling U.S. families as part of the administration’s next spending bill.
And the concept would have a steep climb as Senate Democrats debate how targeted to make the $1,400 stimulus payments in the current legislation.
The letter’s chief signatories are Senate Finance Chair Ron Wyden (D-Ore.); Senate Budget Committee head Bernie Sanders (I-Vt.), and Banking, Housing and Urban Affairs Chair Sherrod Brown (D-Ohio).
“Unemployment insurance has replaced lost income for millions who have lost their jobs,” the senators write. “But millions of others do not qualify for unemployment insurance after seeing their hours reduced, switching to lower-paying jobs, or temporarily leaving the workforce to care for family members during the pandemic.”
The missive will be distributed to the rest of the Democratic caucus and illustrates the contours of what could be the next Democratic fight over how much aid should be sent directly to Americans during a pandemic that’s put the unemployment rate at 6.3 percent, with nearly 20 million Americans receiving weekly unemployment payments. Federal Reserve Chair Jerome H. Powell recently estimated the true unemployment rate was closer to “10 percent in January.”
The proposal does not specify how big the checks should be or the eligibility requirements for direct payments that would recur as many times as deemed necessary. But the overall infrastructure package is expected to carry an even bigger price tag than the $1.9 trillion relief bill passed by the House over the weekend.
That bill passed without a single House Republican vote. And GOP senators are expected to be just as hard of a sell in the closely divided upper chamber, where Democrats are using a procedure known as budget reconciliation to ensure the bill needs only a simple majority to get approved.
In the letter, Wyden, who is the lead signatory, and nine other Democratic senators urge Biden to prioritize recurring payments and enhanced unemployment insurance, as “direct payments are crucial for supporting struggling families who aren’t reached by unemployment insurance.”
The senator from Oregon has long advocated for “automatic triggers” tying the expiration of federal benefits to economic conditions such as the unemployment rate to avert “jumping from cliff to [benefits] cliff” throughout the economic recovery, according to a senior Democratic Senate aide.
The proposal has support from Democrats across the ideological spectrum, including Sens. Elizabeth Warren (Mass.), Michael F. Bennet (Colo.) and Cory Booker (N.J.) Noticeably missing from the list, however, are the names of the two moderate Senate Democrats: Joe Manchin III (W.Va.) and Kyrsten Sinema (Ariz.)
“I think there’s an expanding interest in our caucus in tying relief to conditions on the ground as much as possible,” the Democratic aide adding, alluding to Manchin’s previous calls for more narrowly targeted relief.
Moderate Democratic senators are still raising issues regarding the structure of unemployment insurance and eligibility requirements for direct payments in the coronavirus relief package.
On a Monday conference call with Biden, centrist Democrats proposed narrowing the income eligibility for $1,400 stimulus payments and keeping the weekly unemployment benefits at $300 a month. The legislation that passed the House increases the weekly unemployment benefit from $300 to $400 per week through Aug. 29 — a month short of Biden’s original proposal. Biden did not agree to specific changes during the meeting.
And any bill that doesn’t use budget reconciliation — Democrats do have another budget proposal they could employ this year — would require the support of Republicans and 60 votes.
The concept of direct stimulus payments distributed regularly to Americans has been under Democratic discussion since the start of the pandemic. House liberals petitioned Biden to include recurring payments in the current relief plan. And the New Democrat Coalition, a House group of centrist Democrats, previously endorsed the idea of recurring direct payments.
The letter cites the popularity of recurring direct payments with the public and economic experts. Those involved with the push argue Democrats’ twin victories in the Georgia Senate runoffs prove that direct checks are a political winner for the party.
“Georgia showed the political power of checks, and data shows these checks plus unemployment benefits keep millions of families out of poverty,” said Adam Green, the co-founder of the Progressive Change Campaign Committee and the Progressive Change Institute.
A study from the Urban Institute “suggests that a single direct payment of $1,200 combined with an extension of enhanced unemployment insurance and other assistance could keep 12 million people out of poverty,” according to the letter, “and adding a second direct payment could keep an additional 6.3 million people above the poverty line.”
The push is also supported by the Economic Security Project, a nonprofit started by Facebook co-founder Chris Hughes, as the most efficient way to deliver relief to Americans.
“Most economists think when you look back at the Great Recession, the recovery was too little and too short,” Adam Ruben, the campaigns director at the project. “The [direct payment] says, ‘Let’s not let it take years by choking off relief and not be too stingy, but send the money out to make sure people can keep their heads above water and boost the economy.’ … The checks going back out shorten the period time that checks need to go out again.”