A Democratic proposal to send $2,000 a month in direct payments to Americans amid the coronavirus crisis “won’t go anywhere” with a Republican-led Senate and White House — but it could spark negotiations, economists tell the Herald.
Massachusetts Sen. Edward Markey, along with Sens. Bernie Sanders and Kamala Harris, are pushing the Monthly Economic Support Act — $2,000 a month for people earning $120,000 or less.
Scores of Democratic pols on Monday called for recurring direct payments to Americans until the end of the coronavirus crisis as unemployment has exploded across the U.S.
But the $2,000 monthly payments are not expected to make it past the Republican-led Senate, said Gary Hufbauer of the Washington, D.C.-based Peterson Institute for International Economics.
“I don’t think that will go anywhere with Senate Republicans,” he said. “There are concerns about the debt level soaring.”
However, the $2,000 monthly figure could be a starting point for negotiating direct payments, Hufbauer said.
Instead of the previous $1,200 direct stimulus payment that went to Americans who are both employed and unemployed, future payments could be focused on those who need it most, Hufbauer said.
“I imagine that could be part of the negotiations,” he said.
Many members of Congress — including Markey and Reps. Ayanna Pressley, Joe Kennedy III, Katherine Clark and Jim McGovern — signed a letter on Monday calling for recurring direct payments to Americans amid the coronavirus pandemic.
“Simply put — people need more money in their pockets, and sending monthly payments to workers and families is the fastest and most direct way to address that need,” reads the letter sent to Democratic House Speaker Nancy Pelosi and Republican Senate Majority Leader Mitch McConnell.
When asked about more direct payments to Americans, President Trump on Monday said, “We’re talking about that with a lot of different people. I want to see a payroll tax cut … I want the workers to be taken care of.
“But we are talking about that,” Trump said. “We’re negotiating with the Democrats.”
He said the economy will be roaring next year, “unless somebody messes it up,” he added, by hiking taxes.
UMass Amherst economics Professor David Kotz said he doubts Republicans will approve the $2,000 payments, but added that significant regular checks would “help the economy survive.”
“It helps people pay their bills, and enables them to buy things to keep businesses from going under,” Kotz said.
The national debt is expected to surpass World War II levels, said William Gale of The Brookings Institution.
The Congressional Budget Office projects the national debt to be 101% of GDP by the end of 2020, and 108% by the end of 2021 — values not seen since the end of World War II, according to a report on Monday from Gale and EconoFact. The report noted that the aftermath of the war did not see a fiscal crisis, and in the 35 years that followed, the ratio of debt to GDP fell to 28%.
“Right now it would be foolish to restrict efforts to stimulate the economy based on fear we can’t afford it,” Gale said. “We can’t afford to not do these things.”
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Democrats’ $2,000 monthly coronavirus check proposal won’t get past GOP: Economists - Boston Herald
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