Stimulus payments miss target
| January 9, 2021 1:00 AM
The President signed the latest COVID stimulus bill ($908 billion in additional spending), which will provide a stimulus payment to any individual and their children (aged 16 and younger) having an adjusted gross income (AGI) of $75,000 or less, or a couple having an AGI of $150,000 or less.
For a family of four (two adults and two children), that will be a payment of $2,400. Congress is now discussing the possibility of increasing those payments to $2,000 per adult and $600 per child aged 16 or younger. This would increase the stimulus payment to the same family of four to $5,200. Nice payday!
As with the previous stimulus payments, there are no limitations on those who retained their jobs and could work from home or for those who are retired and were not working prior to the pandemic. The issue that all taxpayers should be concerned with is not how much their government is spending, but on who is getting the stimulus payments.
The economic crisis occasioned by the pandemic has impacted a minority of Americans — those predominantly working in the hospitality and service industries whose hours were cut or whose jobs were eliminated.
Yes, that involves tens of millions of our citizens who are jobless, hungry and facing eviction. Yes, the impact of schools closing fell most heavily on women, many of whom had to stop working and care for their children. We definitely need to help those folks.
Meanwhile, a large portion of our population has been able to retain their jobs and work remotely. They did not lose their jobs or take a pay cut. They actually have more disposable income than they did before COVID, because there are fewer diversions (travel, movies, etc.) on which to spend money.
Another large segment of our population, retired folks who were not working prior to COVID, and who receive pension, IRA and Social Security payments were not impacted. Their monthly checks continue to arrive and they suffered no direct or indirect financial impact from COVID. Why are we sending them stimulus money?
The American Enterprise Institute estimates that 89% of America’s households will receive stimulus checks under the bill that has passed, and if the stimulus checks are increased to $2,000 per person, with same phase-out schedule, 94% of households will receive stimulus checks.
Why are we sending money to nearly every American family, even those who have not been financially impacted by the virus? Why not target the aid to those who have truly been impacted by the pandemic? To those who lost a job, to those who need the money to put food on the table and keep their family housed, to those whose kids need Wi-Fi to connect with their school. If we did a better job of targeting these payments, we could provide more assistance to those who truly have been impacted by the virus.
The simple answer is that near universal stimulus payments are easier to do — none of that hard work required to document those who really need assistance — AND universal payments allow the politicians to take credit for giving EVERYONE a check (sort of like the Oprah show — a check for you, and a check for you).
So, we aren’t doing what is right, we are doing what is easy and what is simple and what is politically palatable. And we are kicking the responsibility for paying for all this largesse down the road to a future generation. Sadly, that has become the American way!
Len Crosby is a Post Falls resident.