House Democrats Reject ‘Austerity’ B.S. on COVID Relief Payments

Last week Sens. Joe Manchin and Kyrsten Sinema, who defend the filibuster, voted in favor of a budget resolution by the reconciliation process. That budget resolution includes President Biden’s $1.9 trillion COVID relief  package that includes $1,400 relief payments to Americans (combined with the $600 enacted in December, rounds up to $2,000).

Sens. Joe Manchin and Kyrsten Sinema have been making noises about “austerity,” that the relief payments need to be “targeted” and essentially means tested so that those whom they feel do not need it, do not get a relief payment. They fundamentally misunderstand the nature of stimulus payments to stimulate economic recovery. It is about injecting money into a struggling economy.

The House Ways and Means Committee is now marking up the$1.9 trillion COVID relief  package for passage by next week. The Committee rejected this “austerity” B.S. on Monday. The Washington Post reports, House Democrats reject plan to sharply curtail $1,400 stimulus payments in coronavirus relief package:

Senior House Democrats on Monday night proposed sending $1,400 stimulus payments to Americans with up to $75,000 in annual income, rejecting an earlier plan under consideration to sharply curtail the benefits.

House Ways and Means Chairman Richard E. Neal (D-Mass.) released legislation that would send the full stimulus payment to individuals earning $75,000 per year and couples earning $150,000 per year. Congressional Democrats had explored curtailing that benefit to $50,000 for individuals and $100,000 for married couples, a position embraced by Sen. Joe Manchin III, a conservative Democrat from West Virginia.

The broadening of stimulus payment eligibility among middle-class households is the latest sign that Democrats are moving ahead without Republican support on President Biden’s $1.9 trillion economic relief package, which would also extend unemployment benefits, send hundreds of billions of dollars to schools and local governments, and strengthen vaccine delivery and health care. Even as the Senate proceeds this week with former president Donald Trump’s impeachment trial, the House Ways and Means Committee and other panels will be working to finalize and vote on the coronavirus legislation.

Compared with previous plans, Democrats are accelerating the rate at which the stimulus payments decline for higher-income earners, a move intended to prevent wealthy Americans from receiving the benefit. Under the new plan, singles earning $100,000 a year and couples earning $200,000 would receive no stimulus payments.

Satisfied now, Sens. Joe Manchin and Kyrsten Sinema?

The stimulus checks would be based on taxpayers’ 2019 or 2020 income returns, according to a summary of the proposal. The plan would aim to give full payments to those who qualify based on their 2020 returns, even if those are not processed for months. [Previously based on 2019 returns because 2020 was such a disaster and the filing deadline is April 15].

The new proposal comes amid days of internal disagreements among Democrats over how to structure the next round of stimulus payments, a core component of Biden’s plan. The legislation still must be passed through the House and Senate, and it is unclear whether Manchin or other conservative Senate Democrats will object to the proposal.

Do you really want to be responsible for denying Americans badly in need of economic relief, alongside heartless Republicans, Sens. Joe Manchin and Kyrsten Sinema? Do you really think you can get reelected after doing that?

Along with the stimulus payments, the House Ways and Means Committee released details Monday of other significant parts of the aid package, including a new child income tax credit for millions of American households. That benefit would offer $3,600 per child over the course of a year for each child under 6, as well as $3,000 per child for each one age 6 to 17. Those child tax benefits would diminish for singles earning more than $75,000 a year and couples earning over $150,000.

The measure would also extend federal unemployment benefits, now set to expire in mid-March, through the end of August and increase the benefit amount from its current level of $300 a week to $400. Biden’s initial plan called for funding additional unemployment benefits through September.

Additionally, Democrats included a $15-per-hour minimum wage in the package, although Biden has said that provision faces long odds in the Senate. [By a voice vote the Senate approved an amendment by Iowa hog castrator Joni Ernst last week to reject the $15 minimum wage provision]. The nonpartisan Congressional Budget Office released a report Monday that estimates the minimum-wage increase would cost 1.4 million jobs but lift 900,000 people out of poverty, intensifying the debate over that controversial provision.

CBS News adds, House Democrats push ahead with $15 minimum wage hike in COVID relief package:

House Democrats are including a $15 federal minimum wage in their coronavirus relief package, though questions remain over whether the increase can survive Senate consideration. The provision written into the House Education and Labor Committees’ portion of the bill Monday would increase the wage gradually from its current rate of $7.25 an hour to $15 in 2025.

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“The CBO’s report strengthens the case for gradually raising the minimum wage through the COVID-19 rescue package,” said House Education and Labor Committee Chairman Bobby Scott in a statement before it was released in his committee’s portion of the COVID relief bill. “This nonpartisan report shows that increasing the minimum wage will act as a direct and targeted stimulus for struggling workers and their families.”

Meanwhile, Senate Budget Committee Chairman Bernie Sanders has argued the only way to pass the $15 minimum wage in the Senate would be through budget reconciliation, a process that can be used when the legislation has a direct impact on the federal budget. If that were the case, Senate Democrats would only need 51 votes for passage, rather than convincing 10 Republican Senators to join them.

“I find it hard to understand how the CBO concluded that raising the minimum wage would increase the deficit by $54 billion,” Sanders said in a statement Monday. “Two years ago, CBO concluded that a $15 minimum wage would increase the deficit by less than $1 million over ten years.”

Historical Reminder to Democrats: President Franklin Delano Roosevelt, only months after taking office in 1933 at the height of the Great Depression, said in his Statement on the National Industrial Recovery Act in June 1933 (excerpt):

In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By “business” I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level – I mean the wages of decent living.

Throughout industry, the change from starvation wages and starvation employment to living wages and sustained employment can, in large part, be made by an industrial covenant to which all employers shall subscribe. It is greatly to their interest to do this because decent living, widely spread among our 125, 000,000 people, eventually means the opening up to industry of the richest market which the world has known…

FDR was committed to a “living wage” not just a “minimum wage.” This is the legacy commitment that Democrats have made to the American people. This is what is expected from every Democrat.

“Our nation is struggling, the virus is still not contained, and the American people are counting on Congress to meet this moment with bold, immediate action,” Neal said in a statement.

The bill would also “dramatically” increase premium subsidies for Americans receiving their health insurance through the Affordable Care Act for two years, said Larry Levitt, executive vice president of health policy for the nonprofit Kaiser Family Foundation.

The design of the payments has emerged as one of the most hotly debated provisions in the rescue package. Centrist lawmakers such as Manchin have called for narrowing the payments to prevent them from going to higher-income Americans, arguing that those who have not lost their jobs do not need help. That idea was met with increasing resistance from other members of the party, including Senate Finance Committee Chairman Ron Wyden (D-Ore.), as well as Senate Budget Committee Chairman Bernie Sanders (I-Vt.) and House lawmakers in the Congressional Progressive Caucus.

Asked about the new thresholds after Neal’s plan was released, Manchin did not immediately attack them and said he was “just trying to make sure that people [receiving them] are truly in need.”

Wyden said in a statement Monday that he would push for unemployment benefits to be continued through September, as opposed to ending them in August, according to the new proposal. “[I] am going to work to find a resolution that preserves both relief payments and jobless,” Wyden said. “We can do both.”

Manchin [believes he] has influence over the issue, because the Senate is split 50-50 between Republicans and Democrats, so Democrats need his vote as they aim to push the legislation forward without GOP support.

Wyden and Sanders have publicly criticized the proposals to lower the income thresholds to $50,000, saying middle-class families have suffered pay cuts and other economic shocks and need relief, too. Sen. Jon Ossoff (Ga.), whose election victory in January helped seal Democrats’ Senate majority, also opposes lowering the threshold on the payments, according to a spokeswoman.

The White House has repeatedly said it is willing to compromise on the thresholds, with White House press secretary Jen Psaki saying the administration is open to negotiations with Congress on the matter. However, on Sunday, Treasury Secretary Janet Yellen suggested that the administration was not on board with Democrats’ plans for lower income thresholds.

“The exact details of how it should be targeted are to be determined, but struggling middle-class families need help, too,” Yellen said on CNN.

Biden gave similar remarks to Psaki in an interview with “CBS Evening News,” saying he was “wide open” on the precise levels of the income threshold.

The debate about the payment thresholds represents one of many disputes Democrats may face as they try to pass Biden’s $1.9 trillion stimulus package through Congress. There is a wide ideological gulf between the party’s moderate and liberal wings, which is likely to produce numerous policy fights — over the $15-an-hour minimum wage; the scale of unemployment assistance; and the overall cost of the bill, among other things — on the way to passing their first major piece of legislation under Biden.

The split within the party appeared to intensify over the weekend. Manchin told WV News last week that he supported the next round of payments not going to individuals earning more than $50,000 or couples earning more than $100,00.

“An individual of $40,000 income or $50,000 income would receive it. … And a family who is making $80,000 or $100,000, not to exceed $100,000, would receive it,” Manchin said. “Anything over that would not be eligible, because they are the people who really are hurting right now and need the help the most.”

But on Twitter and on CNN this past weekend, Sanders slammed Democrats for embracing a plan that would cut out individuals earning $52,000. He also pointed out the potential political downside for the new Democratic administration to be sending fewer payments than Trump did. Wyden has also said in a statement that families that had received the first two payments would expect a third.

“Unbelievable … working class people who got checks from Trump would not get them from Biden. Brilliant!” Sanders said on Twitter.

Rep. Pramila Jayapal (D-Wash.), chairwoman of the Congressional Progressive Caucus, said Monday she is in “nonstop” conversations with White House officials about “why this makes no sense, politically or policy-wise.”

While passing a budget resolution through Congress earlier this month that set the stage for approval of the broader relief bill, Manchin and Sen. Susan Collins (R-Maine) co-sponsored an amendment to exclude affluent families from the stimulus payments. The plan did not define an income amount, leaving that open to interpretation. Sanders and all Democrats voted for the proposal.

Spending bills originate in the House. The House COVID relief bill is coming together along the lines that President Biden originally proposed. It will pass the House next week. It is up to Democrats in the Senate to fall in line and also pass this bill. That means “squishes” like Sens. Joe Manchin and Kyrsten Sinema had better do right by the American people.

Republicans have abandoned legislating and governing. It is up to the Democrats to save America.

UPDATE: A new CBS News/YouGov poll finds that 83% of Americans favor passing the economic relief package that Congress is considering.

Large majorities of Democrats, Republicans, and independents, as well as Americans of all income levels would approve of the stimulus bill.