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Why Passing Stimulus Checks is Critical to the Democratic Party’s Future

Democrats in Congress are likely experiencing dejavú as 2021 mirrors their 2009 control of the White House and Congress, albeit by a razor thin margin, plus a devastating economic crisis. This time around, Democratic lawmakers are not only facing the largest jump in the poverty rate since the 1960s, over 10 million unemployed Americans, and 29 million food insecure individuals, but also over 500,000 coronavirus-related deaths in the country as of February 2021. Although the majority of Americans have recovered from the disastrous consequences of the Great Recession, many economic experts have deduced that the recovery was slower due to the insufficient size of the stimulus from the federal government. Biden, now in the Oval Office, plans to not repeat the mistakes of 2009, as can be seen through his $1.9 trillion American Rescue Plan that includes sending another $1,400 per person stimulus checks. Coupled with the $600 payments that were approved by Congress at the end of 2020, this would make for a total of $2,000 for people earning less than $75,000 and couples earning less than $150,000. Now that Democrats have regained control of the White House and have slim majorities in Congress, it is in their best interest to pass another round of stimulus checks not only to help their constituents but also help re-establish public trust through the fulfillment of their popularized campaign promise.  

Stimulus checks have achieved an often elusive goal of federal intervention: they have helped the poorest Americans substantially.  An analysis of Congress’s first round of $1,200 stimulus checks from the Peter G. Peterson Foundation concluded that the payments provided a moderate boost to the economy, specifically by 60 cents for every dollar of budgetary cost. This result was mainly driven by households earning less than $75,000 a year who used most of the payments to offset their living expenses, such as rent, food, and household supplies. The stimulus checks have also kept millions of Americans from falling below the poverty line. In fact, the Center on Poverty and Social Policy at Columbia University projected that over 12 million Americans were rescued from poverty due to protections passed under the CARES Act. Merely increasing unemployment benefits instead of stimulus checks would be insufficient in helping the poorest Americans; as Matt Bruenig of the People’s Policy Project writes, they would have neglected more than two-thirds of the poorest 20% of Americans that did not work at all in 2019. The Urban Institute furthers that stimulus checks are approximately 3.5 times more effective in keeping people out of poverty than unemployment insurance. Without stimulus checks, those not in the workforce, most of whom are children, disabled and elderly people, would have been neglected at perhaps the time when they need financial help the most. 

Although most Democratic politicians have rallied in support of Biden’s plan, many Republican lawmakers as well as several more conservative-leaning members of the Democratic Party have expressed opposition, most notably Senator Joe Manchin (D-WV). Sen. Manchin and fellow dissenters argue that following Biden’s plan of distribution would lead to economically-stable people qualifying for relief. Critics explain that the income threshold includes financially-stable Americans who would unnecessarily qualify for the stimulus checks, resulting in the federal government spending excessively. 

Regardless of the debate surrounding income threshold, the continual, months-long delay regarding the implementation of stimulus checks is dangerous for the Democratic Party’s future. Nearly 80% of Americans support stimulus checks, including 90 percent of Democrats and 64 percent of Republicans. Simply put, the legislation is extremely popular among the American people despite the extremely polarized political climate. It is in every lawmaker’s favor, especially Democrats, to unite and steamroll the $1,400 stimulus check legislation through Congress and into the hands of the American people. Especially when Democrats across the country campaigned on the promise of obtaining $2,000 stimulus checks, it is imperative that they fulfill their promise that a Democratic-controlled government would pass substantial coronavirus relief unlike their Republican counterparts. Even President Biden tweeted during the Georgia Senate run-off elections, “Their election will put an end to the block in Washington on the $2,000 stimulus check… If you send Sen. Perdue and Loeffler back to Washington, those checks will never get there. It’s just that simple. The power is literally in your hands.” Prolonging intra-party divisions over the passage of stimulus checks in the face of overwhelmingly strong public support will only jeopardize Democrats’ ability to maintain political control in upcoming elections. When compared to Sen. Manchin’s rhetoric, the consequences of possible “splintering” occurring among the party is visible through Rep. Alexandria Ocasio-Cortez’s tweet: “It would be outrageous if we ran on giving more relief and ended up doing the opposite. It’s sad that this is even an argument in the Dem party. COVID relief is disaster relief, & it’s urgent.” If Democrats fail to unite and authorize another round of stimulus checks, Biden’s experience in the White House will likely follow President Obama’s with a split Congress at midterms. 

Considering how politically favorable stimulus checks are to the American public, it might be in the Democratic Party’s interest to consider implementing universal basic income, the policy through which every adult citizen receives a set amount of money on a regular basis. Although universal basic income is considered to be outlandish by critics, it is common across the world and has produced positive results. For instance, the state of Madhya Pradesh in India between 2011 and 2012 had given 200 rupees for adults and 100 rupees for each child to approximately 6,000 citizens, and when compared to individuals who had not received any basic income, they saw improved sanitation, nutrition, and school attendance associated with the basic income. Similarly, Spain had initiated a basic income experiment in 2017, specifically giving randomized households up to 1,675 euros ($1,968) per month, which led to results showing how basic income had boosted overall life satisfaction and mental health. Even many cities across the United States have experimented with the concept, one notably is Stockton where 125 residents (out of an estimated 311,000 Stockton residents) have received over $500 a month for over a year. Despite its limited data, the results from Stockton indicate that recipients had improved physical and mental health. On account of the positive impacts of universal basic income, Democrats ought to advocate for further research and potential implementation at the national level. However, they must first show their ability to provide direct payments to their constituents at the time it is most needed. 

Photo: Image via Adobe Stock (blvdone)