Even within President Joe Biden’s White House, there’s debate about how to meet his promise to issue Americans another $1,400 each in stimulus checks.
At least two of the president’s top economic advisers, Heather Boushey and David Kamin, have privately expressed reservations about the size of the checks and at what level they would begin to phase out for higher-income people, according to three people familiar with internal discussions.
The aides worry that the checks will cost so much that there won’t be enough left over in Biden’s proposed pandemic relief bill for other priorities — supplemental unemployment benefits, an expanded child tax credit, or aid to states and local governments, the people said.
Neither Boushey, who sits on the Council of Economic Advisers, nor Kamin, a deputy director of the National Economic Council, responded to requests for comment.
Outside the White House, a group of 10 GOP Senators offered a $600 billion stimulus counterproposal on Sunday that includes $1,000 checks with strict income requirements. Their plan is less than a third the size of Biden’s.
The idea of checks was once so popular in Washington that Biden pledged at the beginning of January they’d be in the mail “immediately” if Georgia elected two Democrats to the Senate. A month later, the money has emerged as a flashpoint in negotiations over Biden’s $1.9 trillion stimulus plan.
The two Democrats won, and thanks in part to his election-eve promise, Biden is committed to issuing more checks. But there’s disagreement among Democrats over the amount of the checks — is $1,400 too much, too little, or about right? — and whether they should be restricted to lower-income people.
Before Sunday, Republicans had exhibited little appetite for further stimulus at all, pointing to the $900 billion package Congress passed in late December that included $600 checks — an amount many lawmakers of both parties derided as paltry, at the time.
The 10 Senate Republicans who proposed their own stimulus accepted Biden’s invitation to meet Monday afternoon, they said in a joint statement.
For Biden, there’s little about checks to debate. He told voters at a rally on Jan. 4, a day before Georgia elected Democrats Raphael Warnock and Jon Ossoff to replace two Republicans in the Senate: “Their election will put an end to the block in Washington on that $2,000 stimulus check, that money that will go out the door immediately to people who are in real trouble.”
Time to deliver
Now he has to deliver or face the consequences. The president regards the checks as not only a political imperative, but good policy: a clear demonstration that the federal government can directly help ordinary Americans, far better than a more intangible benefit such as a tax credit, according to the people familiar with the matter.
A White House official said there’s always been a dynamic discussion between Biden and his economic advisers about the parts of his proposal, adding that the president and his aides are open to feedback on the COVID package, including the potential for more targeted direct payments.
Dating back to the transition, Biden’s aides hoped a combination of more stimulus checks, reopening schools and ramping up coronavirus vaccinations would earn his White House accolades after its first 100 days in power. Many of those goals now look imperiled, as new variants of coronavirus emerge and lawmakers object to Biden’s stimulus.
Biden’s chief of staff, Ron Klain, disputes that the president’s agenda is stalling.
“It’s hardly dead in the water,” he said of the stimulus plan in a CBS News interview on Thursday. “It’s gaining a lot of momentum on Capitol Hill. We’ve been here seven days and I think we’ve done more to advance a bill in seven days than any administration in history.”
Congressional Democrats may lay groundwork this week to pass a stimulus including the checks without Republican support by advancing a budget resolution. Democratic leaders have said they want to see bipartisan negotiations continue, but also to have a Democrat-only option available.
Some Republicans have warned that passing a budget resolution would hurt chances for a bipartisan bill. The resolution would allow for a procedure in the Senate called “budget reconciliation,” under which spending and tax bills can be passed with a simple majority — presumably, all 50 Democrats plus the tie-breaking vote of Vice President Kamala Harris.
The counterproposal announced Sunday by the 10 GOP senators, including Susan Collins of Maine and Lisa Murkowski of Alaska, would send $1,000 checks to Americans below an as-yet unspecified income threshold. Biden will have to determine whether their offer is a starting point for negotiations that may lead to a compromise, or if it signals Republicans will never agree to the expansive stimulus he envisions.
“I support passing COVID relief with support from Republicans if we can get it,” Biden told reporters Friday as he departed the White House to visit troops and health workers at Walter Reed National Military Medical Center in Bethesda, Maryland. “But the COVID relief has to pass. No ifs, ands or buts.”
‘Need the money’
Psaki asserted Friday that there’s broad public support for policies in the White House stimulus plan and questioned why Republicans oppose it. “Even if this bill moves forward through the reconciliation process — again, a parliamentary procedure — it doesn’t mean they can’t vote for it,” she said at a briefing for reporters.
Biden’s allies say the White House doesn’t want to decrease funding for coronavirus testing or vaccine-related measures in the stimulus. The size and scope of the direct checks, however, increasingly looks malleable — even though members of the president’s economic team argue higher-income families, too, have suffered in the pandemic.
“The checks are better targeted than I think most people realize. Now, that doesn’t mean that they just go to folks at the bottom, but that is because it’s not just folks at the bottom who need the money,” Jared Bernstein, a member of the Council of Economic Advisers, said at a Bloomberg conference last week. “If anybody is listening to me in the $75K to $100K range, many of them, yes, have kept their jobs. Many of them have lost hours. Many have lost wages.”
Biden also holds an expansive view of which Americans are susceptible to economic distress. During the Obama administration, Biden often told aides that nurses or firefighters who earned more than $50,000 were not rich. He insisted it was silly to phase out government aid or tax credits at $50,000, two former Obama administration officials said, because he defined the middle class far more broadly.
In the December stimulus, individuals who earned $75,000 or less, or couples earning $150,000 or less, received the full $600 check, with the amount phasing out above those thresholds. The $1,200 relief checks sent in the spring were also subject to income caps.
“I don’t believe the threshold needs to be lowered,” Senator Ron Wyden of Oregon, the top Democrat on the tax-writing Finance Committee, said on Thursday. “There are so many families who aren’t making what they were in 2019.”
Political imperative
One Biden ally conceded the stimulus checks are not perfectly designed, as an academic matter, but that the promise helped Democrats win the two Georgia Senate seats. At some point, the political argument for checks eclipsed the economic argument, another ally said.
Amid the debate over targeting the checks to the most needy families comes questions about whether an influx of cash helped fuel recent stock market frenzies around GameStop Corp. and other stocks. Trading among those with annual incomes of less than $75,000 who received payments jumped 53 percent.
The nonpartisan Center for a Responsible Federal Budget
Biden’s top aides denied this week that they’ve considered breaking the bill apart to pass the vaccine and testing provisions alone, which enjoy broad support.
— With assistance from Justin Sink, Jenny Leonard and Steven T. Dennis
