As Democrats Offer Massive New Benefits, a Refresher on Pandemic Check Writing

 Americans may have difficulty keeping up with the reckless pace of spending coming out of Washington these days. Last week, it was college debt cancellation worth up to $20,000 per person (across over 40 million people). Nonpartisan experts estimate it will cost $500 billion or more—or at least four times the price of last year’s expanded child tax credit. The week before, it was over $350 billion for green new deal spending, including $7,500 subsidies for Americans who buy electric vehicles.

Whenever supposedly transformational new benefits like these are rolled out, proponents simply ignore existing programs or dismiss them as woefully inadequate. In reality, before the pandemic there were already over 80 federal programs that spent almost $1 trillion per year on education, energy, food, housing, health, income, and other support for low-income individuals and families. But post-pandemic, government check-writing advocates are taking it to another level—by also ignoring the unprecedented federal checks just paid to tens of millions during the pandemic, including to many poised to receive the latest new benefits and subsidies, too.

The first and most widely distributed pandemic payments were stimulus checks paid to an estimated 85 percent of all US households. Adults first received $1,200 and children $500 under the March 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act. A second round of checks followed a December 2020 law, which provided $600 per adult and child. The Biden administration then sent a third round of checks via the March 2021 American Rescue Plan, which provided another $1,400 per adult and child. Like the prior rounds, those checks were paid to individuals earning up to $75,000 and married couples earning up to $150,000 per year. All told, a typical household of four collected $11,400, costing taxpayers a staggering $869 billion—more than the annual US defense budget.

Other federal checks provided enlarged benefits to those laid off or prevented from working by the pandemic. Starting in March 2020, $600-per-week (and later $300-per-week) federal bonuses increased the value of all other state and federal unemployment benefits. Paid to a peak of 33 million in June 2020, those bonuses were so generous that in mid-2020 the resulting benefits were greater than the former paychecks of two-thirds of recipients.

A new temporary program called Pandemic Unemployment Assistance (PUA) offered weekly checks to millions never before eligible, including independent contractors, the self-employed, and those who worked too little to qualify for regular unemployment checks. PUA featured infamously loose eligibility criteria that invited record fraud. It paid checks to a peak of 15 million in August 2020, and many of its recipients were younger than those on regular unemployment benefits—including many who will qualify for college debt cancellation, too.

Millions also benefitted from unemployment extensions. Those exhausting up to six months of state unemployment checks could collect over a year of federal checks under one pandemic program, which supported over 6 million in early 2021. A second federal program offered another 20 weeks of checks to millions more. All told, an unemployed individual receiving just average state benefits of $325 per week could collect an astonishing $46,000 in state and federal unemployment checks. That includes $38,000 in temporarily expanded and extended federal benefits lasting up to 18 months. Federal taxpayers will pick up the record $700 billion tab.

The final wave of federal checks were the increased child tax credits of up to $3,600 paid to 65 million children in 2021. In a controversial break with that program’s past, even non-working parents qualified for monthly checks, making that temporary expansion akin to work-free welfare checks for millions.

This list doesn’t include tens of billions of dollars in expanded federal food stamps, rental subsidies, childcare benefits, and much more. It also doesn’t count universal basic income checks, additional stimulus checks, and other payments state and local governments are making using $500 billion in federal pandemic aid. Those expanded benefits, like the cost of college debt cancellation, were simply added to the already massive federal debt, too.

While federal pandemic benefit expansions have now mostly expired, recent studies suggest Americans continue to have over $2 trillion in excess savings as a result. Even some Democrats blame those expansions for the 40-year-high inflation hitting low-income Americans the hardest. But none of that has prevented the administration’s latest $500 billion surge in deficit spending, which arrived just a week after President Joe Biden promised “we’re cutting deficits to fight inflation.” If only that were true.

https://www.aei.org/poverty-studies/as-democrats-offer-massive-new-benefits-a-refresher-on-pandemic-check-writing/