A group of Democratic senators is urging President Joe Biden to provide recurring stimulus checks to low-income Americans for the duration of the pandemic.
In a letter that is still circulating among members, 11 Democrats called on Biden to provide ongoing relief in his next major economic package.
"We urge you to include recurring direct payments and automatic unemployment insurance extensions tied to economic conditions in your Build Back Better long-term economic plan," the senators wrote.
"This crisis is far from over," the letter continued. "Families should not be at the mercy of constantly-shifting legislative timelines and ad hoc solutions."
The letter was drafted by Senate Finance Committee Chairman Ron Wyden of Oregon, and has been signed by Budget Committee Chairman Bernie Sanders of Vermont, Banking Committee Chairman Sherrod Brown of Ohio, Massachusetts Sen. Elizabeth Warren, New Jersey Sen. Cory Booker and New York Sen. Kirsten Gillibrand, among others.
Democrats are aiming to include the proposal in Biden's multitrillion-dollar infrastructure and investment package. The White House said the president would release the details of his Build Back Better plan after the Senate considers the $1.9 trillion American Rescue Plan.
"American families struggling in this pandemic and economic crisis need and deserve recurring direct payments," tweeted Sen. Ed Markey, D-Mass., another signer.
Getting approval for recurring aid will be an uphill battle. The third round of direct checks has already proven to be a stumbling block for Senate Democrats. Critics on the left and right have argued that the $1,400 checks provided in Biden's rescue plan were not targeted enough. Others balked at the prospect of spending $422 billion on direct checks.
On Thursday, Biden struck a deal with moderate Senate Democrats to limit eligibility for the next round of checks to people earning $75,000 or less. Individuals making more than $80,000 or couples making more than $160,000 would not qualify for a check.
The plan would still allow qualifying households to collect up to $1,400 per dependent, child or adult and according to an analysis by the Institute on Taxation and Economic Policy, the bottom 60% of income-earners would qualify for the full payment. The relief bill would also add an extra $400 per week in unemployment benefits through the end of August.
To secure recurring payments and ongoing unemployment benefits, Senate Democrats would need ten Republicans to support it, or they would have to push it through budget reconciliation, a tactic that requires 51 votes to approve the measure.
The letter is short on details. It doesn't indicate how much the payments would be, how frequently they would be disbursed or what economic conditions would have to be met to phase out the benefits. But the concept isn't new.
In late January, a group of more than 50 Democrats led by Rep. Ilhan Omar of Minnesota called on Biden to support recurring $2,000 monthly payments to adults and their dependents "until the economy recovers."
Last spring, then-California Sen. Kamala Harris put forward legislation with Sens. Sanders and Market to send monthly $2,000 checks to individuals earning less than $100,000. The proposal also allowed for $2,000 per child and up to $10,000 per month. The benefits would continue up to three months after the end of the national public health emergency.
Throughout the pandemic, economists and lawmakers have argued that these automatic stabilizers would stave off the worst effects of the recession. The idea is that benefits should kick in and phase out based on economic conditions, rather than being subject to congressional gridlock or arbitrary cutoff dates.
Sen. Michael Bennet, D-Co., a signer of the letter to Biden, proposed legislation last year to gradually phase-out unemployment benefits when states' unemployment rate dipped below 5.5% for two consecutive months. The phase-out trigger would also be tied to the president lifting the COVID-19 public health emergency declaration.
Other proposals recommend tying emergency benefits to the national unemployment rate and ending the benefits gradually or immediately when there is reliable evidence of an economic recovery or unemployment rates return to a range of normal.
Adam Michel, a senior policy analyst at the Heritage Foundation, argued that automatically extending unemployment benefits and stimulus payments would prolong the recession by disincentivizing people from returning to work.
"It can become a self-fulfilling prophecy," he said. "When you put in these automatic rules, they almost always err on the side of providing more generous benefits creating a system that will prolong the recession rather than help speed up the recovery."
In a paper supporting automatic stabilizers, economists with the Federal Reserve Board and the National Bureau of Economic acknowledged the moral hazard. Expanding unemployment insurance, in particular, could impact the labor market directly by reducing job search efforts and raising the wage individuals require to accept new employment, noted John Coglianese and Gabriel Chodorow-Reich, but the strength of those effects is debatable.
The calls to expand relief are also coming at a time when most economists see the United States heading toward recovery. Vaccinations are moving out quickly, promising a return to some level of normalcy in the near future.
The nonpartisan Congressional Budget Office recently projected that the U.S. economy would bounce back to pre-pandemic levels of growth by the middle of the year and unemployment levels would decline, even without the passage of additional relief.
With the Biden stimulus, Goldman Sachs projected economic growth could rev up to 6.6% this year and unemployment could drop to 4.5% by the end of 2021. Moody's estimated that the economy was on track to return to full employment by fall 2022.
As the economy continues to improve, the case for recurring relief payments will lose urgency. "I think the longer we get into the recovery, the harder it is to make the case that something like this is needed," Michel noted.
Since the start of the pandemic, Congress has spent more than a half-trillion dollars on pandemic unemployment benefits, a program that has been rife with fraud, and $445 billion on direct payments to Americans. The American Rescue Plan would add another $246 billion in extended unemployment benefits and around $400 billion in direct payments.
Still, the idea of monthly relief checks is highly appealing to a majority of Americans. A recent Data for Progress poll found that 65% of voters would support Congress sending a $2,000 monthly check to every American for the duration of the pandemic.
Supporters of recurring relief payments argue that much of the country continues to suffer from the pandemic downturn. According to Census data, 24 million adults don't have enough food. As many as 1 in 6 renters are behind on monthly rent.
Approximately 18 million people are collecting some form of unemployment aid. Meanwhile, new unemployment claims rose last week to 745,000 and the country has yet to recover 10 million jobs lost because of the pandemic.
"Families shouldn’t have to worry about whether they’ll have enough money to pay for essentials in the months ahead as the country continues to fight a global pandemic," argued Senate Democrats.
A recent survey found that nearly 60% of respondents said a $1,400 check would last them three months or less with roughly 1 in 4 saying it would only last them a week or two.