Menu Close

Why it is important for the stimulus package to offer a range of benefits in addition to the $1,400 check?

Why it is important for the stimulus package to offer a range of benefits in addition to the $1,400 check

The plan includes extra support for children, unemployment bonus, food and housing subsidies.

While the “flagship” program of the pandemic economic stimulus package is arguably the direct check to Americans, it is not the only one helping families get back on their feet during the pandemic crisis.

So states an analysis by the Center for American Progress (CAP), which highlights seven principles that should guide the economic relief plan, in order to address the health crisis, provide targeted assistance and create broad-based economic growth.

“The state of the economy is fragile, job losses are returning, unemployment is high. This is a situation that, if nothing is done or you have too small a package, it is going to take two or three years to reverse,” Andres Vinelli, CAP’s Vice President for Economic Policy and author of the report “7 Principles to Guide Economic Relief Negotiations,” explained in an interview.

He added that President Joe Biden’s $1.9 trillion plan is broad and diverse, but acknowledged that negotiations in Congress may reduce it, although he insisted on maintaining its diversity of programs and not leaving it so low.

In his report he stresses that only the federal government can provide the financial assistance needed by families, businesses, and state and local governments.

“Only the federal government has the ability to provide the economic stimulus needed to generate a rapid and equitable recovery, but economists agree that the economic stimulus must be implemented quickly, be properly targeted, and be sufficiently robust,” the report said.

Vinelli noted that the package under debate in Congress is comprehensive and will seek to address the economic and health care crisis from different perspectives.

“One of the major problems in this recession is that it has left a lot of people in crisis and there is not a single program that addresses that has been heavily impacted,” he said. “There are a lot of things that are positive about this package, which is about different treatments, different programs that reach people.”

The stimulus package, Senate Majority Leader Chuck Schumer (N.Y.) noted, is still being integrated by committees in both chambers, but he will make sure there are no further delays.

“Senate Democrats will not dither, water down or delay (the stimulus package), because COVID’s responsibility is very real,” he said.

Both the House and Senate integrate a relief plan as part of Budget Reconciliation and passage is expected in two to three weeks at the latest.

The $1,400 check

Vinelli, who is also an adjunct professor at the McDonough School of Business at Georgetown University, advocated sending an additional stimulus check.

“Sending people a check at this time is a good idea. Another way of looking at it is that it’s a tax break,” he said.

He added that the direct-to-family stimulus ensures that support reaches everyone, a wide range of people, who would not otherwise receive help. Congress is debating whether to modify the eligibility rules.

“It’s a great way to revive the economy and it would reach all the families that have had a problem, because all the programs we have are not very accurate in reaching everybody,” he said. “This does not represent any threat to the State’s finances, because the State can get into debt at very low rates, practically zero interest.”

Child tax credit

Vinelli emphasized the “multiplier effect” of assistance programs, such as the child tax credit that would send parents $3,600 per child under age 6 and $3,000 for children ages 6 to 17.

“It is proven that payments that go directly to families with children produce a very healthy effect on children’s health and food security,” he said.

He said the multiplier effect is a key element, and studies estimate that such a payment would cut child poverty in half.

“It is an excellent program for several reasons, it reactivates the economy of families and reduces poverty by half,” he insisted. “There are studies that indicate that children who have access to balanced nutrition and food security, achieve better school performance, which results in better jobs in the future, and that improves the labor force.”

The seven keys

1. Congress must act fast – If Congress does not pass the new package as soon as possible, “a deeper and more prolonged recession is likely,” the report states.

2. Think big.– The report states that the economy must return to its full potential, which would be achieved with spending between $3 trillion and $4.5 trillion, although the $1.9 trillion plan is a good start.

3. Public health investment – The program should have a clear focus on pandemic vaccine production and distribution, as well as on maintaining health care capacity.

4. Targeted assistance – The expert indicated that the various programs should be targeted, such as the $400 per week unemployment bonus; a $3,000 per child child tax credit (CTC); increased earned income tax credit; and a 15 percent increase in food stamps or SNAP.

5. Support for State governments – The report adds that direct assistance to State and local governments is also a priority, due to the loss of jobs and the constant demands on services due to the pandemic. This will avoid laying off key employees, such as teachers.

6. Address inequality – The new aid package should address widespread inequality through minimum wage increases; eviction protections for renters and homeowners; foreclosure moratoriums; and additional financial assistance for small businesses.

7. Infrastructure and jobs – An economic recovery package must include robust and comprehensive investments in infrastructure, the report notes. “The final package should include transportation, water, clean energy, schools, rural broadband, and affordable housing, among other sectors.

Leave a Reply

Your email address will not be published. Required fields are marked *