Despite an unprecedented push for a $1.9 trillion bill on purely partisan grounds, the bipartisan consensus is that the Biden administration’s proposal needs to be better targeted to those who actually need it.
99 Senators Called for Targeting Checks Only to Struggling Families
Under House Democrats’ spending plan, some families making more than $300,000 could receive stimulus checks. On Thursday night, 99 senators agreed that the checks should only go to struggling families that need it most.
Independent Regulators: Checks Were Saved, not Spent
The Federal Reserve Bank of New York found that consumers saved more than a third of the first stimulus checks, which were sent to households as part of the $2 trillion Cares Act enacted last March. Just under a third of the stimulus payment, 29%, got spent, while 36% was saved and 35% used to pay down debt.
CBO: Stimulus Not Required for Pre-Pandemic Sized Economy in 2021
The non-partisan Congressional Budget Office said U.S. economic growth will recover “rapidly” and unemployment could fall from 6.3% to fall to 5.3 percent this year. Even its most optimistic projections do not assume any new stimulus, including Biden’s $1.9 trillion plan.
Even Democrat Economic Advisers Call for Greater Targeting
Lawrence Summers, a former Treasury Secretary under President Bill Clinton and economic advisor to the Obama White House, noted that President Biden’s stimulus proposal is far bigger than what our economy needs, which risks inflation, and despite that, doesn’t even address other critical needs. This is exactly why we need a targeted approach:
“Whereas the Obama stimulus was about half as large as the output shortfall, the proposed Biden stimulus is three times as large as the projected shortfall. Relative to the size of the gap being addressed, it is six times as large.”
During an interview with CNBC, the President Biden’s Council of Economic Advisers Chairman Jared Bernstein was asked about targeting by Jim Cramer:
“Jared, this is what is so disturbing to me so many people got money who have jobs. Let’s flood the zone of people who aren’t doing well … why can’t we make it so the people who need it get the money and the rest of the people continue to lead their lives?”
Bernstein’s answer pointed only to a vague claim that there will be an effort by the administration to better coordinate benefit distribution – but couldn’t point to a specific provision that would qualify as targeted, and especially not on checks.