Senate Democrats pump brakes on new stimulus checks
House Democrats looking to deliver another round of $1,200 relief checks to Americans are encountering skepticism from an unexpected source — fellow Democrats in the Senate.
The $3 trillion House-passed measure is not only facing opposition from GOP senators, it’s also prompting Senate Democrats to raise concerns about what they see as a huge untargeted expenditure.
Sen. Ben Cardin (D-Md.), a member of the Senate Finance Committee, said he wants the next round of coronavirus relief to be more focused on the households that have been hardest hit by the economic downturn brought on by the pandemic.
“I’d like to take a look at all that aid we provided and get good economic information on the value for that, from the point of view of our economy but more importantly on fairness to people who are really hurt,” Cardin said when asked whether he would support another round of checks.
Cardin said the direct payments made more sense in March when Congress wanted to get money out the door as quickly as possible. But now, as states are allowing businesses to reopen around the country, he says lawmakers should look at who will most need relief in the coming months.
“We wanted to get money out quickly. We used the refund checks to do that, we used the PPP program to do that,” he said, referring to the Small Business Administration’s popular Paycheck Protection Program.
“I think the next round we’ve got to be more targeted to those who are really in need. So I hope we can target this a little bit better to those who have been hit hard because of COVID-19,” he added.
Sen. Ron Wyden (Ore.), the senior Democrat on the Finance Committee, earlier this month acknowledged there’s “a little bit of debate” over whether another round of checks should be included in the next relief bill.
Senate Republicans have panned the $3 trillion HEROES Act, which the House passed on May 15, calling it a non-starter.
While Senate Majority Leader Mitch McConnell (R-Ky.) now says Congress will “probably” pass another relief bill, Republicans say it is likely to carry a much smaller price tag than the House package.
Many Republicans have raised concerns over the increasing federal deficit, which is projected to reach $3.7 trillion in 2020, according to the Congressional Budget Office.
Senators in both parties are now starting to rank their policy priorities. As a result, proposals for ideas other than stimulus checks are starting to gain momentum.
Wyden, a key player in upcoming talks for the next emergency spending bill, said he would back another round of direct payments but that they’re not his top priority.
“I would support additional payments, as well as fixing problems with the first round of payments like the exclusion of dependents and citizen children of immigrants. My top priorities are tying expanded unemployment benefits to economic conditions and providing more help for the smallest of small businesses,” he said in a statement.
Wyden has proposed extending the weekly federal boost to state unemployment benefits, a key provision of the $2.2 trillion CARES Act enacted in late March. That provision is due to expire at the end of July.
Under Wyden’s plan, the federal boost to unemployment benefits would remain at $600 a week until a state’s three-month average total unemployment rate falls below 11 percent.
Weekly federal unemployment compensation would drop by $100 a week for each percentage point decline in a state’s joblessness, bottoming out at 6 percent. That means workers would receive an extra $500 if their state’s unemployment rate is between 10 and 11 percent, down to an additional $100 where the jobless rate falls between 6 percent and 7 percent.
“I believe the economic conditions at the end of July workers are going to need another boost,” he said, citing estimates earlier this month by White House officials that the U.S. unemployment rate is likely to hit 20 percent.
The jobless rate nationwide was 14.7 percent in April.
Wyden has also praised legislation sponsored by Sens. Mark Warner (D-Va.), Richard Blumenthal (D-Conn.), Doug Jones (D-Ala.) and Bernie Sanders (I-Vt.) that would use the Employee Retention Tax Credit as a mechanism to secure paychecks and benefits for workers and provide financial assistance to small businesses to cover operating costs over the next six months.
“Without additional help many small businesses will not survive this crisis and it will take far longer to climb out of this economic ditch,” Wyden said.
The skepticism in the Senate surrounding relief checks is familiar territory, though Democrats earlier this year were more in favor of recurring payments instead of one-time checks of $1,200 for individuals earning up to $75,000 a year, with an extra $500 for each child in a household.
“There are many, many who have lost their jobs and one check, when they may be out of their jobs for three, four, five months, isn’t going to be enough,” Senate Democratic Leader Charles Schumer (N.Y.) said in March.
Sen. Debbie Stabenow (D-Mich.), a member of the Finance Committee, also wasn’t a fan of the checks when the idea was first floated.
“One-time payments are not what people need. What people need is a paycheck. They need ongoing income until this is done. That’s what they need,” she told The Hill during the negotiations for the CARES Act.
Senate Democrats eventually went along with providing the checks because Republicans agreed to provide a weekly $600 federal boost to state unemployment benefits.
There was also substantial skepticism among Senate Republicans, but they later rallied around the checks proposal because it was one of President Trump’s top priorities.
Sens. Lindsey Graham (S.C.) and Rand Paul (Ky.) were among the Republicans who questioned the approach at the time.
“What I want is income, not one check. I want you to get a check you can count on every week, not one week,” Graham said. “Here’s what I’m focused on: You have unemployment insurance that is totally inadequate, let’s beef it up.”