In the most ambitious crossover since the Molotov-Ribbentrop Pact, democratic socialist Sen. Bernie Sanders (I–Vt.) and nationalist conservative Sen. Josh Hawley (R–Mo.) have joined forces to fight for another round of $1,200 COVID-19 relief checks.
On Thursday afternoon, the two senators introduced their proposal as an amendment to a one-month stopgap spending bill passed by the House earlier this week. Their proposal would provide a $1,200 check to every individual earning up to $75,000 (or a $2,400 check for joint-filing couples earning up to $150,000 ), plus $500 for each dependent.
"In the midst of this terrible pandemic and economic crisis, this amendment would make certain that working families get the urgent, direct support they need to survive," said Sanders in a press release. "It would be a dereliction of duty if Congress adjourns for Christmas without having a vote on providing working families with direct payments," added Hawley.
The odd-couple team of the left-wing Sanders and right-wing Hawley is generating a lot of buzz, despite the rather generic details of their proposal.
Their checks-for-all amendment is a carbon copy of the stimulus checks provision found in the March-passed CARES Act. People will recall that even that first round of stimulus checks attracted some strange cross-ideological couplings.
Legislators as different as Sen. Mitt Romney (R–Utah) and Rep. Tulsi Gabbard (D–Hawaii) introduced bills for universal cash payments in the run-up to the CARES Act. Even Rep. Justin Amash (L–Mich.) backed the idea, although he endorsed it as a substitute for other aid measures on the table.
House Democrats' $3 trillion HEROES Act, passed in early May, included another round of $1,200 checks. U.S. Treasury Secretary Steven Mnuchin has proposed a round of $600 universal payments as part of another pandemic relief bill currently under consideration.
Despite the increased partisanship and ideological polarization in our politics, sending each American a check in the mail seems to be the one idea most folks can agree on.
But any idea that's a little too popular in Washington, D.C. should make libertarians wary, and the demand for a second round of universal $1,200 payments is no exception.
The most compelling argument for stimulus checks in March was that Congress couldn't afford to tinker with eligibility requirements for more targeted relief programs like unemployment insurance or small business aid in the midst of an unprecedented, fast-moving crisis that was prompting governments to forcibly shut down almost all economic activity and putting millions out of work.
In that environment, mailing everyone a check seemed like the easiest way to assist people sheltering in place during the couple weeks or months it would take to flatten the curve and get the virus's spread under control with mass testing and contact tracing. (Those were truly better days.)
Nine months into a pandemic, however, these broad-based measures are far less appropriate.
While plenty of small business owners and workers have experienced hardship as a result of the economic damage done by COVID-19 and related shutdowns, it's also clear that lots of people have been able to continue to work and get paid without interruption. The unemployment rate is currently a little under seven percent, or about half of what it was at the peak of the pandemic.
That's one reason, despite the current recession, the savings rate has ballooned during the pandemic. Barron's noted in early November that the "combination of government checks and the threat of the virus has also been responsible for a massive increase in the household saving rate" worth about $1.3 trillion.
That's particularly important when considering the cost of what's being proposed. As of late August, the CARES Act stimulus checks cost taxpayers $269 billion. When all is said and done, the final costs of the program are estimated to be just shy of $300 billion.
Even in this era of money printers going "brrrr", that's still a gobsmacking price tag, and one that comes after massive increases in deficit spending. Last year's budget deficit was a record $3.1 trillion dollars. The Associated Press reported yesterday that the budget deficit for the first two months of this fiscal year is 25 percent higher than last year.
With so much money already spent, and with the uneven economic impacts of the COVID-19 crisis better understood, now seems like a terrible time to just start cutting checks again.
Whether Hawley and Sanders' proposal will come to pass remains to be seen. Quibbling over a comprise $908 billion relief proposal is ongoing. The White House has thrown its support behind a $916 billion bill that would include the aforementioned $600 payments to all Americans.
Sanders is threatening to sink the stopgap spending measure in the Senate, which needs to pass in order to avoid a government shutdown, if relief checks aren't included in it. Hawley hasn't committed to that course of action, but has urged Trump to veto any relief bill that doesn't include his and Sanders' proposal.