Democrats May Block Millions of Families from Receiving Full Stimulus Checks

This story is co-published with The Daily Poster

The nation's biggest business lobby is pushing Democrats to slash COVID-19 relief checks for middle-class families despite new census data showing that nearly half of those families have lost income because of the pandemic. Top Democrats are now reportedly considering excluding millions of those families from the checks, and President Joe Biden himself has said he is willing to negotiate with Republicans on limiting eligibility for the checks.

The U.S. Chamber of Commerce, which spent $82 million lobbying in Washington last year, sent a letter to the White House and Congress on Tuesday urging them to consider "targeting any additional stimulus checks based on income, loss of employment, or similar criteria."

The corporate lobbying group—whose members undoubtedly benefit from a desperate workforce—used census data showing broad economic devastation to assert that families earning more than $50,000 don't need new stimulus checks.

"While the pandemic induced recession has created near unprecedented levels of hardship, the impact has not been universal," the Chamber wrote. "The Census Bureau Pulse survey indicates that while a majority of households with less than $50,000 in income have experienced a loss of employment income, a majority of household with more than $50,000 in income—including those between $50,000 and $150,000—have not experienced any loss in earned income."

Joe Biden stimulus checks pandemic economy
President Joe Biden on the South Lawn of the White House on January 29, 2021 in Washington, DC. Will members of his own party push to limit the number of American families who receive full stimulus checks? Drew Angerer/Getty Images

This is a misleading way to frame the census survey results. Recent census data shows that 45 percent of households earning between $50,000 and $150,000 have experienced a loss of employment income since March 2020—including 48 percent of households earning between $50,000 and $75,000. Nearly a quarter of households earning between $50,000 and $150,000 say they expect to lose employment income over the next four weeks.

The Chamber is adding its voice to a chorus of pleas in the Beltway to limit who's eligible for COVID relief checks. President Biden's COVID relief plan would send full $1,400 survival checks to individuals earning up to $75,000 and couples earning up to $150,000. Sen. Joe Manchin, D-W.Va., has repeatedly demanded the relief checks be more "targeted."

Senate Republicans on Monday proposed that Congress limit full stimulus checks to individuals earning up to $40,000 and couples earning $80,000—a move that would deny checks to an additional 80 million people, according to the Institute on Taxation and Economic Policy.

The White House indicated it doesn't support the GOP's proposed income caps, but Biden and his team have continually said they are open to further limiting eligibility.

The Washington Post's Jeff Stein tweeted on Tuesday that some senior Democrats are "looking at lowering threshold on stimulus payments so they start phasing out above $50K for single taxpayers; $75K for heads of households; & $100K for married couples." He cautioned the talks are still "fluid."

At the same time, top congressional Democrats are floating new tax cuts that could primarily benefit the wealthy.

The campaign to limit stimulus check eligibility was recently boosted by a study by economists at Opportunity Insights, a Harvard University think tank bankrolled by the family foundations of billionaires Mark Zuckerberg, Mike Bloomberg and Bill Gates.

The study, based on consumer spending data, found that "households with incomes above $78,000 will spend only $45 of the $600 payments they received" within the first month of the checks being sent. The authors wrote that "these households have largely returned to work, and have even accrued additional savings."

While lower-income households have been disproportionately affected by the pandemic, census data suggests that huge swaths of Americans, across income levels, have been impacted by COVID-19.

Democrats took control of the U.S. Senate because they won two miracle runoff races in Georgia last month after campaigning at all levels on a promise to give voters $2,000 checks (not $1,400).

Fifty-three percent of all Georgia households have reported losing employment income during the pandemic, including 51 percent of Georgia households earning between $50,000 and $150,000.

The Opportunity Insights study lumps together all households earning more than $78,000, when census data indicates that families earning between $75,000 and $150,000 are significantly more likely to have experienced a loss in income during the pandemic than households earning more than $200,000.

There's a glaring problem with the push to limit who receives a stimulus check. Eligibility for the next checks will be determined based on 2019 tax returns—before the pandemic started.

"People have not filed their taxes for 2020, meaning that targeted checks would go out based on income information that is now one to two years out of date, with a pandemic and mass job loss having occurred in the interim," Matt Bruenig of the People's Policy Project told the Washington Post.

"This is not targeting," he said. "It is the illusion of targeting, an illusion that will end up hurting tens of millions of people who are currently in need but weren't in 2019."