Moderate Democrats’ Cruel Calculus on Who Deserves Stimulus Relief

Moderate Democrats’ Cruel Calculus on Who Deserves Stimulus Relief thumbnail

Late last week, as Thursday turned into Friday, the Senate took the first major step toward passing the Biden administration’s $1.9 trillion coronavirus relief package through budget reconciliation, sending the legislation to the House for markup and approval. The bill would expand food stamp benefits and boost unemployment benefits to $400 a week, and includes $30 billion in rental assistance. The fate of a federal minimum wage increase to $15 an hour and the distribution of the $1,400 stimulus checks remains unclear. On Sunday, Bernie Sanders, now chairman of the budget committee, made clear that he is still pushing for the minimum wage increase to be included in the final bill, Joe Biden’s pessimism and Joni Ernst’s procedural maneuvering notwithstanding. Likewise, sending stimulus checks to a broader swathe of people remains on the table, despite Joe Manchin’s equivocating.

It’s a bad situation: According to the most recent statistics, nearly 10 million more people are out of work than at this time last year, before the pandemic hit. Something like 30 percent of people with money put away for retirement have had to dip into their savings, according to one survey; fewer than half of Americans have enough in the bank to cover three months of expenses. Nationwide, one study found, back rent is approaching $34 billion; renters in New York City alone owe more than $1 billion in unpaid rent. Given the ongoing scale of the crisis, it would seem sensible just to give everyone money as quickly as possible, rather than dithering over whether some nurse or carpenter really deserves a $1,400 check. And yet, even as the Biden administration has sidelined the most hardcore liberal austerity mongers and backed the minimum wage increase, much of the Democratic Party remains in thrall to the logic of scarcity, enamored of the cult of means testing, and allergic to universal programs that would actually meet the urgency of the moment.

Under the original Biden stimulus proposal, individuals making up to $75,000 and couples earning up to $150,000 would receive relief checks of $1,400. (Depending on whom you ask, this has already been cut from $2,000.) Ahead of the big vote last week, however, the president opened the door to negotiating this income cap down to $50,000 for individuals and $100,000 for couples. The Senate overwhelmingly voted for a Manchin amendment that would block “upper-income taxpayers” from receiving stimulus checks—but left the definition of “upper income” open to interpretation. “There are … families who have not missed a single paycheck as a result of this pandemic. It does not make sense to send a check to those individuals,” Manchin said ahead of the vote. (Apparently, those in need of relief do not include undocumented immigrants, who have been hit hard by the pandemic but would be blocked from receiving any stimulus money if Manchin got his way.)

Over the weekend, Sanders said that he opposes cutting the income threshold, instead advocating for a “strong cliff … so it doesn’t kind of spill over to people making $300,000 a year.” As it stands, checks would be reduced by 5 percent for every dollar a person makes over the cap; House Democrats appear likely to send a more progressive version of the package back to the Senate, retaining both the $15-an-hour minimum wage increase and the $75,000 cap with the quick dropoff. “That’s what I support, that’s what I think most people understand,” Sanders said. “But to say to a worker in Vermont or California or any place else, that if you’re making, you know, $52,000 a year, you are too rich to get this help, the full benefit, I think that that’s absurd.”

Those seeking to justify lowering the income cap on the stimulus checks cite one research paper in particular, which purports to show that recipients of earlier stimulus checks earning over $78,000 didn’t spend the money as quickly as those earning less and therefore should not receive future stimulus checks—at least according to Republicans and conservative Democrats. Critical readers like former Federal Reserve and Council of Economic Advisers economist Claudia Sahm have questioned its methodology. “Frankly it’s irresponsible what they’re doing with the data,” Sahm told The American Prospect. “If I knew what families really needed this money, I’d send it to them.… The reality is we do not know.” In any case, precisely what harm is caused by someone making $78,000 a year having an extra $1,400 in savings is unclear.

Checks targeted in this way, according to Sahm, would mean that 40 million fewer people would receive a $1,400 check than got a $600 check late last year. “Lowering the income threshold for the $1,400 checks will exclude families in places with a high cost of living, places like New York City and Los Angeles which have also been hotspots of Covid deaths and job losses,” she wrote in her newsletter. “Thus, the lower income thresholds would hurt some parts of the country more than others. A national crisis requires national relief.”

(This is all to say nothing of the study’s provenance in a Harvard-based think tank funded by the Bill and Melinda Gates Foundation, the Chan Zuckerberg Initiative, and Bloomberg Philanthropies.)

That there is no real economic justification for lowering the income threshold for stimulus checks is not to say that the debate is arbitrary. The universalist politics that neoliberal Democrats thought they had buried beneath welfare reform and the means-testing regime has made its way back into the national discourse, thanks in no small part to Bernie Sanders’s newfound stature. “Nobody denies that there are times when it is necessary to target resources where need is greatest,” Richard Eskow wrote in 2019. “But means testing has evolved from a tool into a conceit. It has become a worldview that says policymakers can technocratically sort every American citizen into a mathematical unit, deserving of only the proper amount of benefit.”

Since at least the Clinton administration, the logic of means testing has been clear: to make social programs more difficult to access and easier to dismantle over time, to shrink the constituency that benefits from social programs, and to sow resentment against those who do. Means testing runs on a politics of exclusion, using the discourse of personal responsibility and the dignity of work—not to mention difficult, arcane delivery systems that disincentivize their own use. It is the political practice of neoliberalism, and up through the Obama administration, it was more or less the only way things got done within the Democratic Party.

Sanders’s advocacy for universal programs has repeatedly forced this insidious logic out into the open, and in so doing provoked some of its most absurd articulations. The Democratic Party is selectively anxious about when its policies might be helping out the wealthy, fighting hard to circumvent and repeal the one progressive aspect of the 2017 Trump tax bill. (It is not without reason that the U.S. Chamber of Commerce endorsed a slew of Democrats last year.) But during the 2016 primary, Hillary Clinton responded to Sanders’s proposal for universal free college at a debate by implying that such a policy would favor the children of the wealthy. “I’m a little different from those who say free college for everybody. I am not in favor of making college free for Donald Trump’s kids,” she said.

During the 2020 primary, Pete Buttigieg, who proposed to forgive the debt of those who had attended historically Black colleges and universities or participated in his planned national service organization, offered a similar criticism to Clinton’s. “I just don’t believe it makes sense to ask working-class families to subsidize even the children of billionaires,” he said. And who can forget Kamala Harris’s plan to cancel the debt of Pell Grant recipients who keep businesses in disadvantaged communities running for at least three years. The Sanders response to such proposals was characteristically blunt. “I believe in universality,” he said at a 2019 news conference with Ilhan Omar and Pramila Jayapal when the three introduced joint legislation canceling all student debt. “If Donald Trump wants to send his kids to public schools, he has a right to do that.”

This is not just a campaign trail tic, either. Early in the pandemic, when it was suggested that Democrats might want to send people money to help them get by, Nancy Pelosi rejected the idea on the grounds that she did not want to send checks to millionaires, according to Politico. “The implication in this presentation was a cash payment to every adult regardless of income. The Speaker supports Congress taking an approach targeted to those most in need,” Pelosi’s deputy chief of staff clarified on Twitter. “As Congress considers the next steps, the Speaker believes we should look at refundable tax credits, expanded UI & direct payments—but MUST be targeted.”

If moderate Democrats in Congress were really worried about “upper-income taxpayers,” as Manchin’s amendment put it, unfairly benefiting from universal social programs, they would embrace a more aggressively redistributive taxation plan. But that’s never how these things work. Instead, we must endure another cycle of cynical, pseudo-populist language, pitting the deserving against the undeserving, dividing the working class against itself to the benefit of the wealthy few.

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