The U.S. government is poised to send American households cash payments to help them survive and pump up the economy at a moment of disastrous financial stress.
Treasury Secretary Steven Mnuchin told reporters last week that as part of a trillion-dollar stimulus package, the administration wants to send direct cash payments to households by the end of March to staunch the economic pain of the new coronavirus pandemic and the crashing economy.
How much will a household receive? Who gets it and who won’t? Will there be a single payment, or more?
The details aren’t decided yet.
The payments are part of federal legislation called the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act.
When Senate Republicans introduced it on Thursday, this bill called for tax rebates of $1,200 to individuals, with an additional payment of $500 per qualifying child. The rebate would start phasing out for people with incomes of more than $75,000 or, for couples who file joint tax returns, $150,000, meaning people who make more than those amounts would not receive the full $1,200.
However, members of both Congress and the administration have spent the weekend debating the details of this federal legislation — meaning the bill has yet to be finalized. So, the exact terms of the payments for American households are not final.
Whose idea is this?
You may not even have heard of such an idea as the federal government handing cash to citizens until the current presidential election season — when Andrew Yang, then a Democratic candidate, proposed giving every American over the age of 18 a monthly “Freedom Dividend” of $1,000. Universal basic income, in other words — something Time says “was considered to be a particularly fringe idea” when Yang introduced it.
Democrats like Rep. Tulsi Gabbard of Hawaii, another former presidential candidate, have spoken up for the idea recently, proposing cash payments to combat the economic effects of the new coronavirus pandemic. Republican Sen. Mitt Romney of Utah offered such a proposal, too.
You might think it odd that Republicans have jumped on this bandwagon so quickly, but the concept of a universal basic income (UBI) is an old one. It has made “strange bedfellows” of a range of political actors, from libertarians to socialists, says Investopedia’s history of the idea, adding:
“In a strict sense, the intellectual history of universal basic income is around half a century old. But the idea that the government should somehow prop up everyone’s earnings has cropped up repeatedly over the past two centuries.”
So, while Yang is one of many UBI messengers, his determination to give it a platform in the 2020 presidential race injected the idea into the national conversation just before the need for it arguably arose.
Yang tells Politico:
“… obviously, no one would ever want it to be under these circumstances. But it does feel very much like we championed a new and different approach to improve Americans’ lives right as the coronavirus started to shut down the economy.”
What do you think of the plan to send emergency payments to American households? Tell us in a comment below or on Money Talks News’ Facebook page.
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