Given how 2020 has gone, we probably should have known it would end with Congress and the president wasting their final days on one last bad idea: $2,000-per-person direct payments.
As The Washington Post editorial board previously pointed out, there was a case for including modest “checks” to the hardest-hit, low-income population segment. 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. Meanwhile, the bill extends unemployment benefits a mere 11 weeks.
In short, the measure short-shrifted the neediest and showered billions on people who suffered little lasting hardship from the pandemic. This, at a time when the economy has healed significantly — unlike the chaotic days of April, when Congress previously sent checks (of only $1,200) to help people cope with economic free-fall.
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. The resources would be far better spent on longer extension of unemployment benefits, aid to state and local governments and vaccines.
It is a bad idea whose time has come due to politics not economics. President Donald Trump deserves primary blame, by criticizing the initial $600 per-person version and threatening to veto. That created an opening for Democrats in Congress, who seek to exploit the proposal’s appeal.
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 for perfectly comfortable families. Then again, Republican would-be populists such as Sen. Josh Hawley, R-Mo., made common cause with Sanders; and now Republican Sen. Marco Rubio of Florida, has jumped on the bandwagon, as have the two Republican Senate candidates in Georgia.
Only the Senate can stop this policy. Majority Leader Mitch McConnell, R-Ky., blocked an immediate vote on the House bill Tuesday, while hinting he might hold a vote on the $2,000, but linked to Trump-backed provisions Democrats could not accept: repeal of a law that protects social media companies from liability and an investigation of purported fraud in the 2020 election. Sanders, meanwhile, threatens to delay a defense-bill veto override, which would keep senators in Washington for New Year’s Eve. Blowing the holiday for senators would be a small price to pay for keeping them from blowing nearly half a trillion taxpayer dollars.