Will Congress claw it’s way past dysfunction to pass another round of measures to help a devastated economy and, if so, what will the latest attempts at economic recovery look like?
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The United States Senate is scheduled to return to work this week. It is expected to begin debating (as much as Congress does such work these days) and offering amendments to various proposed bills within the House and the Senate related to the expected 4th round of COVID-19 stimulus. There is an array of proposals from various corners of the political spectrum, and there are many variables in play that will determine if, when, and how much stimulus individuals and businesses receive in the coming months.
President Trump has expressed his desire to send checks to individuals again (if there is anything Trump loves doing, it is giving people someone else’s money and taking credit for it). Right now, there are several proposals for direct payments (“tax rebates”) to families and individuals. Some of them have a better chance than others of making it through the gauntlet that is a divided Congress.
The bill with the seemingly best chance is the HEROES Act (who the “heroes” are, I am not sure). This bill from Representative Nita Lowey (D-NY) has already passed the House. Rep. Lowey also wrote the CARES Act, which passed in March. The HEROES Act is similar in nature and breadth to the CARES Act and seems to be a follow-up and extension of the latter. As such, the HEROES Act would provide the same amount of stimulus to the individual as the CARES Act: $1,200 for a single person and $2,400 for those filing jointly with an additional $500 per dependent child. Senate Majority Leader Mitch McConnell (R-KY) introduced a CARES Act that has been moved along in the Senate, which may indicate his willingness to pass the HEROES Act if it has the votes.
Senators Josh Hawley (R-MO) and Tom Cotton (R-AR) have competing bills that propose different stimulus amounts, either as monthly payments for the rest of the year or a one-time check. Their bills are smaller and more specific in nature as both Senators are trying to flex what little fiscally and constitutionally conservative bona fides they have left. Both bills are awaiting hearings and votes in the Finance Committee.
Cotton’s Coronavirus Economic Stimulus Act is a bit slimmer than the CARES Act – providing funds for $1,000 checks to individuals and $2,000 checks for joint filers with an additional $500 per dependent child. Hawley’s Emergency Family Relief Act of 2020 is an attempt at a conservative universal basic income where the government provides:
“[E]mergency family relief credit payments on a monthly basis for the period prior to January 1, 2021, without respect to tax liability, for taxpayers with dependent children equal to $1,288 for a two-person household, $1,446 for a three-person household, and $1,786 for a four-person household. For households larger that four persons, the credit amount is $1,786, plus $420 for each additional household member. These credits amounts are phased out for a taxpayer with a modified adjusted gross income exceeding $50,000 ($100,000 for a joint return).”
You can tell from the summary that some congressional aid did a lot of math to make these numbers work in a way that wouldn’t blow up the budget too much. The mean testing (up to $100,000 gross income) is probably what will kill this bill even in the Democratic House – no representative from New York or California would vote for a bill that doesn’t benefit anyone in their district.
Representative Tim Ryan (D-OH) has a similar problem with his Emergency Money for the People Act. He has outlined monthly payments of $2,000 ($4,000 for joint filers) and $500 per dependent child (up to 3 children). His proposal would cut off at $130,000 gross income ($260,000 for joint filers), which is far more generous than Senator Hawley but would still exclude a large percentage of those living in New York City and San Francisco.
Representative Ilhan Omar (D-MN) has proposed the RELIEF Act of 2020, which provides for monthly payments of $1,000 ($2,000 for joint filers) to everyone over 18 and $500 for every dependent child under 18. The RELIEF Act would make the payments taxable income only to “the top 1 percent of income earners” while the rest of America would suffer no tax burden for these payments.
Those bills are all a little hopeless, but in May, Senator Kamala Harris (D-CA) introduced the Monthly Economic Crisis Support Act. Senator Harris’ bill would provide $2,000 ($4,000 for joint filers) and an additional $2,000 per dependent child to each household every month until three months after the “Secretary of Health and Human Services determines that the public health emergency declared by such Secretary under section 319 of the Public Health Service Act (42 U.S.C. 247d) on January 31, 2020, with respect to COVID-19, has ended.”
Those making more than $100,000 a year (individually, $200k for joint and $150 for head of household filers) will get less, but not nothing. This is a whopper of a bill, and the cost to the long-term economy would potentially be catastrophic. To put this in perspective, this bill would more than triple my income. I could quit my job for six months and still be able to save up money to buy a new house somewhere warm and sunny where I can lounge surrounded by enormous piles of money.
Looking at these proposals, I think there are four most likely outcomes from the Senate’s July session:
- The HEROES Act will pass and be signed into law by Trump. We will get a new round of checks identical to the ones we got in March. Congress and the President will pat themselves on the back for being heroes.
- Some compromise will be hashed out that provides a larger single check to individuals than the HEROES Act provides for.
- Some compromise will be hashed out that provides some small universal basic income (perhaps similar to Senator Hawley’s bill) that will be less than or equal to the single check in the HEROES Act.
- Nothing will happen. Congress will deadlock because of the impending election and, instead of accomplishing something most people would be OK with, they will pander to their bases and fail to pass any bills.
While researching this article, I came across some fun things that I would like to append here. There are 677 bills from Congress with “Coronavirus” in the title or summary. Of them, only 17 have passed either Chamber, and only eight have actually become law. This raises a lot of questions about what, exactly, Congress has been doing since March. If this epidemic was really the most important thing on their minds, you would think they would have made an effort to pass more legislation related to the outbreak.
Among those 677 bills, there is, in fact, a PANDEMIC Act introduced by Representative Matt Gaetz (R-FL), which revolves around illegal immigration and raises a lot of questions about how Representative Gaetz views such people. Additionally, there is the more aptly named CHARITY Act from Representative Mark Walker (R-NC), which expands how charitable donations can be deducted from taxes for 2020. It would even allow those who do not itemize their deductions (the vast majority of people) to deduct their charitable contributions.
The most helpful set of proposals I was able to find were part of the Coronavirus Regulatory Repeal Act of 2020, introduced by Representative Chip Roy (R-TX) and Senator Rand Paul (R-KY). From the summary: “This bill repeals or modifies any agency rule that is temporarily waived or modified during the COVID-19 (i.e., coronavirus disease 2019) public health emergency, subject to a review process.” Now that is an idea worth getting behind.