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US White House open to narrowing who qualifies for stimulus checks but keeping payments at $1,400 per person


FEBRUARY 2, 2021

WASHINGTON, DC – FEBRUARY 1: White House press secretary Jen Psaki participates in a briefing at the White House on Monday, Feb 01, 2021 in Washington, DC. (Photo by Jabin Botsford/The Washington Post)

The White House is open to narrowing eligibility for the next round of stimulus payments but not lowering those payments below $1,400 per person, according to a White House spokeswoman.

Congressional Republicans and even some centrist Democrats have in recent days raised concerns that President Biden’s proposal to send another round of stimulus checks would give government aid to affluent Americans who do not need it.

Biden has publicly expressed willingness to negotiate the stimulus payments, which under Democrats’ current plans would begin to diminish at $75,000 for individuals and couples making $150,000 a year. Biden is also aiming to provide $1,400 per every adult and child under that threshold, on top of the $600 per adult and child approved by Congress in December.

A group of 10 Senate Republicans trying to strike a bipartisan compromise on a stimulus plan has proposed both lowering the income thresholds on the payments — to $50,000 for individuals and $100,000 for couples — and reducing the size of the checks from $1,400 to $1,000.

During the bipartisan meeting at the White House on Monday, White House officials expressed openness to lowering the income threshold on the payments but will not accept reducing the size of the checks, two people briefed on the discussions said. These people spoke on the condition of anonymity to discuss private conversations with White House staff.

“The President remains committed to finishing the job on delivering $2,000 in direct relief to Americans who are struggling to make ends meet during this crisis,” Rosemary G. Boeglin, a White House spokeswoman, said in a statement.

Still, White House spokeswoman Jen Psaki added at her press briefing on Tuesday that Biden is wary of limiting the income thresholds on the payments too dramatically. For instance, she said Biden believes a nurse and a teacher jointly earning $120,000 a year in Biden’s hometown of Scranton, Pa., still “should get a check.” Biden reiterated this commitment in a meeting with White House aides on Tuesday, she said.

“That is in his plan,” Psaki said. “People need to get the relief they need.”

Sen. Shelley Moore Capito (R-W.Va.), a member of the bipartisan group, also said in an interview that Biden demonstrated willingness to negotiate with Republicans over more narrowly targeting the income threshold for the stimulus payments.

“He instructed and told us, ‘Let’s follow up,’” Capito said. “No promises made, and no real concessions made at the time, but certainly a greater understanding of where we are.”

While campaigning in the Senate runoffs in Georgia in January, Biden vowed $2,000 stimulus payments would be sent “immediately” if Democrats secured control of the Senate. The two newly elected Democratic senators from the state, Jon Ossoff and Raphael G. Warnock, both urged Democrats to quickly pass the stimulus payments in an internal caucus call of congressional Democrats.

“Their election will put an end to the block in Washington — that $2,000 stimulus check — that money would go out the door immediately, to help people who are in real trouble,” Biden said in Georgia in the closing days of the Senate campaigns. “Think about what it will mean to your lives — putting food on the table, paying rent.”

The dispute over how to structure the checks reflects a broader disagreement among economists about whether they represent the best form of fiscal relief to the current economic crisis caused by the coronavirus pandemic.

John Friedman, an economics professor at Brown University, recently argued that the checks should be targeted for those further down the income distribution, finding that the pandemic had most clearly hurt lower-income groups.

“Targeting the stimulus payments to lower-income households would both better support the households most in need and provide a large boost to the economy in the short-run,” Friedman previously told The Washington Post. “Low-income households have suffered by far the biggest economic shock. They need the help the most.”

Other economic experts have urged the White House not to target the checks too narrowly. They note that the payments are based on prior-year income and that lowering the threshold may exclude millions of people who recently lost their jobs.

“People have not filed their taxes for 2020, meaning that targeted checks would go out based on income information that is now one to two years out of date, with a pandemic and mass job loss having occurred in the interim,” said Matt Bruenig, founder of the People’s Policy Project, a left-leaning think tank. “This is not targeting. It is the illusion of targeting, an illusion that will end up hurting tens of millions of people who are currently in need but weren’t in 2019.”

It is unclear how many Republicans in the group of 10 would vote for increasing the stimulus payments to $2,000. The Republican lawmakers involved in the centrist group are skeptical of the stimulus checks but included an increase in the payment anyway as a way to demonstrate their good-faith intention to work with Biden on his priorities, one person familiar with the matter said. Sen. Joe Manchin III (D-W.Va.), the most centrist Democratic senator, has also publicly raised concerns about the efficacy of the checks.

Biden’s plan would provide stimulus payments to approximately 95 percent of the country, while the Republican plan, lowering the threshold to those making under $50,000 a year, would provide payments to about 70 percent of the country, according to preliminary estimates of the proposals by the Institute on Taxation and Economic Policy, a left-leaning think tank. Approximately 80 million fewer people would receive them under the GOP offer, the institute found.

The Republican plan would also be less expensive, spending $220 billion on the payments compared with the $465 billion under Biden’s plan.

The Institute on Taxation and Economic Policy also previously found that Biden’s plan would amount to a 29 percent increase in the annual income of the poorest 20 percent of Americans.

Courtesy/Source: Washington Post