Progressives Renew Push for $2,000 Monthly Stimulus Checks but Economists Are Skeptical

Amid the ongoing debate over a new coronavirus relief package, progressives in Congress are advocating for $2,000 stimulus checks—not just once but every month until the pandemic is over.

More than 50 House Democrats, led by Representative Ilhan Omar of Minnesota, sent a letter to President Joe Biden and Vice President Kamala Harris on Thursday urging their administration to back recurring direct cash payments.

"One more check is not enough," Omar wrote, likely referencing the $1,400 payment included in the president's $1.9 trillion relief package.

The group of lawmakers suggested the monthly payments be directed to those "who need it most and will spend it the quickest," as well as "all immigrant workers, refugees, and their families." Dependents and those excluded from the first two stimulus checks should also be eligible, they said.

"Many families cannot afford to wait for 8 months between payments," the letter read. "To truly build back better, families need stability and certainty through ongoing relief—they cannot be at the mercy of Congressional gridlock."

But some experts push back on the idea of a monthly stimulus check, arguing that there are better ways to provide relief to struggling Americans and boost the economy.

"I don't necessarily know that providing $2,000 on a monthly basis would necessarily be the right approach at this stage," Gregory Daco, the chief U.S. economist at Oxford Economics, told Newsweek.

Daco, citing an urgent need for aid, said the government should send out the third round of stimulus checks "immediately" to cover financial necessities for families, but he stopped short of endorsing a monthly payment.

Instead, he argued, lawmakers should pursue more targeted relief for those most affected by the health crisis. That support could come from extending and expanding unemployment benefits, increasing the child tax credit and providing funds for rental assistance, among other measures.

"We know in Congress things tend to take a long time," Daco said. "I don't know that it's a very constructive approach to now be proposing these $2,000 checks which Republicans will say no to and I don't even know that moderate Democrats would say yes to. You're essentially delaying potential delivery of more immediate stimulus in favor of discussions that will drag on and most likely not deliver anything."

Bernard Yaros Jr., an economist at Moody's Analytics, agreed that there "are more cost-effective ways to provide relief to the economy as we're negotiating these final months of the pandemic."

He told Newsweek, "You could still do a $1,400 check and then focus on other areas that are more targeted."

progressives renew push for monthly stimulus checks
Economic stimulus checks are prepared for printing at the Philadelphia Financial Center on May 8, 2008. Some progressive Democratic lawmakers are pushing for $2,000 monthly payments until the coronavirus crisis is over. Jeff Fusco/Getty

This is not the first time a $2,000 monthly stimulus check has been floated in Congress. In early May, then-Senator Harris, Senator Bernie Sanders and Senator Ed Markey rolled out legislation that would provide monthly payments of up to $2,000 for U.S. residents. The bill went nowhere in the Republican-controlled chamber.

"If we were going to do this, we should have done this last year," Robert McNab, a professor of economics at Old Dominion University, told Newsweek.

"If we had followed the lead of other countries and had monthly stimulus payments during the height of the pandemic and continuing through the summer, then the sharp increases we have seen in poverty likely would have not occurred, or at least would have been mitigated significantly," he said.

In the letter to the Biden administration, Omar cited data from Columbia University that found that the $1,200 checks provided in last March's CARES Act were the primary reason poverty fell by as many as 4 million people at the start of the recession.

But now, with COVID-19 vaccines being rolled out and the economy slowly reopening, McNab said, a "$2,000 monthly payment to all Americans is not the most effective form of stimulus."

The current legislation under debate in Congress would provide a $1,400 stimulus check to qualifying Americans, as well as increase the minimum wage to $15 per hour for federal workers, allocate billions of dollars to coronavirus testing and vaccination distribution and provide state and local governments with more aid.

The plan, endorsed by Biden, is already facing significant Republican opposition. Democrats said they are preparing to possibly pass the measure through a reconciliation process that would not require any Republican votes.

Mark Hamrick, Bankrate's senior economic analyst, said time is of the essence in providing more relief. He noted that major problems arose when the second coronavirus package, which was signed by former President Donald Trump in December, took nearly nine months to come together.

"The Biden administration wants to avoid a repeat of that experience with uncertainty, or lack of clarity, by advancing its legislation soon," Hamrick told Newsweek. "The idea is to avoid any lapse in unemployment benefits and other key provisions of the aid package."