The editors of the Washington Post are unhappy with the relief package enacted by the Congress and signed into law by President Trump:
As we have previously pointed out, there was a case for including modest “checks†to the hardest-hit, low-income segment of the population. In the $908 billion stimulus it did pass, however, Congress went well beyond that, providing $600 payments that will send up to $3,000 for families of five earning as much as $150,000 — and at least a few dollars to those earning up to $210,000, before phasing out entirely. The bill does this while extending unemployment benefits a mere 11 weeks. In short, the measure short-shrifted the neediest and showered billions on people who suffered little or no lasting hardship from the pandemic. This, at a time when the economy has healed significantly and coronavirus vaccinations are underway — unlike the chaotic days of April, when Congress sent checks (of only $1,200) to help people cope with economic free fall.
What do they think of the $2,000 checks that have been proposed?
Yet a just-passed House bill would compound all of those errors by increasing the $600 payment to $2,000, at a total cost of $464 billion. It would phase out completely only for families of five earning above $350,000. Much of this is going to be saved, not spent, since restaurants are closed and air travel limited. The resources would be far better spent, in terms of both economic equity and economic growth, on longer extension of unemployment benefits, aid to state and local governments, and vaccines.
But if the $2,000 payout is a bad idea, it is a bad idea whose time has come because of politics, not economics. President Trump deserves primary blame, by criticizing the initial $600 per-person version as too small and threatening to veto the stimulus bill. That created an opening for Democrats in Congress, who seek to exploit the proposal’s simplistic appeal to help their party’s two candidates in Georgia’s Jan. 5 Senate runoff.
Especially wrongheaded in this regard is the progressive left, spearheaded by Sen. Bernie Sanders (I-Vt.), who depicts the $2,000 as aid to “desperate†Americans despite the huge amounts destined for perfectly comfortable families. Then again, Republican would-be populists such as Sen. Josh Hawley (R-Mo.) made common cause with Mr. Sanders; and now at least one other GOP politician with presidential ambitions, Sen. Marco Rubio (Fla.), has jumped on the bandwagon, as have the two Republican Senate candidates in Georgia.
Three points. First, that’s what politicians do. Policies are crafted to a) follow the prevailing wisdom; b) be easy to administer; c) not get pushback. Second, every single member of the House who voted for the larger payouts either just won their re-election campaigns or won’t be serving next session. They have absolutely nothing to lose.
Third, if you want something more targeted, it’s got to be done at the state or local level. The federal governments doesn’t have its ear that close to the ground.
I have a family of five and we are well under the $150k income threshold, so we’ll get the maximum of whatever eventually passes – perhaps $10k if the House bill passes. We don’t need the money but also won’t refuse it. We’ll give away a substantial portion and move up some home improvement projects we’d planned for next year. But we’re unusual in that we already have substantial savings.
The money given to us would definitely be better spent on those with a greater need than us. Hence why we plan to donate a sizable chunk. As you note, however, the feds are not able to determine need except crudely via the tax system far after the fact. Our close friends, for example, have a somewhat higher income than us, but because they converted and IRA last year, their income for that year is about double – so they will get nothing. They are doing fine and don’t need the money either, but it’s just an illustration of how arbitrary it is to hinge this federal benefit on reported 2019 taxable income.
I don’t know what the best policy is that will provide the greatest good for the greatest value.
But Washington doesn’t trust the states with their borrowed trillion.
Probably use it to shore up state pension funds anyway.
And most of the PPP money went to larger organizations with legal and financial staff well prepared to use their relationships with bank lenders to scoop the free money up before mom and pop operations knew the rules.
Big, non-essential operations such as Planned Parenthood and Jeffrey Epstein’s Houston megachurch reaped tens of millions.
Don’t forget also, the Democrats want even bigger stimulus, but they want credit, so they want it in January or February. Trump knows that and also has a score to settle with McConnell so his call for $2000 serves his need for vengeance.
$600 is of course a ridiculous sum as relief or stimulus but it was the product of negotiations so it only makes sense as a compromise.
and there are legal limits on how the IRS can use the information it has.
That it didn’t target the most needy should not surprise anyone. Look at the federal budget with all the programs supposedly designed, at least in the marketing phase, to “help the poor.” But look at what we really spend on the poor. A travesty. Wake up, America.
Second, I note they glossed over the fact that 7/9ths of the bill isn’t going for covid relief at all. Anyone surprised?
Speaking of travesty, the truly poor read the headlines and spend like they’ll really get the $2000. Moral hazard.
When it doesn’t materialize, they’re actually worse off than before.
But if you believe their bullshit, these are the people our legislators care most about.
Excuse me, cough, cough, lost my grip on reality for a sec there.
Those people deserve their fate, pearls before swine.
The Romney 47%. Pity. Public education is good enough for them.
All they can understand anyway.
For whatever reason, the Democrats have left the poverty stricken in the dust. Other than a mention of increased SNAP benefits(hmm why?) no mention of those on TANF, SSI, VA benefits, etc. However, as always those who divvy it out are covered.
Hmmph.. wonder if we’ll get cards from Biden et al promising more
“if you want something more targeted, it’s got to be done at the state or local level”.
This recalls a theme that been hit on different issues throughout the year.
One forcing function why additional unemployment assistance was set at a flat $600/week, and now $300/week, was States UI systems are running on software written in COBOL and 40+ years old. It would take too long to program the systems to augment UI by a more targeted formula like a percentage of income.
Then there were multiple states that were hit by the fraud in the UI system; estimates go as high as 10% of money distributed through UI was fraudulent.
Or coronavirus vaccine distribution. It is clear some states are administering the vaccine at a much faster rate then other states.
The effectiveness or what some call “state capacity” of governments to accomplish a task is very uneven across the country. Targeted aid at a state or local level is not possible unless “state capacity” is improved and consistent across the country. Otherwise, it will be like unemployment insurance, the States will tell the Federal Government that whatever targeted solution is devised cannot be done.
This issue of improving “state capacity” should be a bipartisan focus., no matter one’s position on the proper size of government. For adherents to limited government, an effective government is one that requires fewer resources to handle its responsibilities. For those believing in an expansive role in Government, only an effective government can handle increased responsibilities without governance decreasing in quality.
There are many problems with government at the state and local level. One of them is staffing. They can’t lay people off, they can’t just bring on new IT staff to augment present staff, and hiring consultants is expensive. Many of the people presently working in IT at the state and local level were hired decades ago and frequently in an area other than IT. They don’t want to get outside their comfort zone and their comfort zone is decades-old technology.
On the other hand we’re presently infantilizing state and local governments by depending on the federal government (which has many of the same problems) for things that should be done at the state or local level.
The reason that more decisions need to be made at the state or local level is that $150,000 in New York City is one thing, it’s another in upstate New York, and quite another in rural Mississippi. An eligibility cap of, say, $50,000 may be far too low in NYC, just right upstate New York, and handouts for the rich in rural Mississippi.
I dont know what other states are doing, but can tell you what we are seeing and doing. We received about 25,000 doses of vaccine. We have about 20,000 employees in the network.. Everyone has been offered the vaccine. About half have opted to receive it. I dont know the stats yet for clinical vs non-clinical. I think we had everyone vaccinated in a week or a bit over, but did have to wait a day or two for Moderna.
What to do with the rest? Several inquiries made to the state and no answer until yesterday. We were given a general list of priorities. Pretty vague for the most part, with some very specifics.
My impression from talking with other department chairs and others in hospitals we communicate with, is that some hospitals prepared well and they see to have gotten more vaccines than they actually need for all of their staff. They are also trying to figure out where to go next. A couple had laid out better more specific plans than we made for the extra, though we were ahead of a lot of people in preparing for the initial reception and distribution. So it looks to me like the feds pawned it off on the states, and the states are passing it off to hospitals, some pharmacy chains and a couple of other health care entities. Our state has been slowish, I think, on guidance. A number of hospitals, pharmacies etc were not especially well prepared. Systems not set up well to receive, administer and especially document.
Work on this should have begun and been done weeks to months ago. I understand that they wanted to see the data but the logistics should have been set.
Steve
I should add one thing just to illustrate that the workload is an issue also. When our ED is full we are using some surge capacity, but sometimes you cant just use any surge bed and you need regular telemetry monitoring, which means you need monitors and you need the staff able to monitor them who also know and have the skills to respond. With the record numbers of Covid pts we have in our hospitals plus we are seeing record levels in the number of procedures being done (still doing catch up) staff are pretty beaten down. They are offering a $50 an hour bonus on top of regular pay and on top of overtime pay to try to entice enough people to fill these positions. They are still having trouble finding enough staff. Over $100/hour.
Steve