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Congress: You'd Be Fools to Send Me a Stimulus Check Under These 3 Proposals

By Dan Caplinger – Jul 18, 2020 at 12:03PM

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Lawmakers should stop handing out money to people who don't need it and focus their efforts on those who do.

The COVID-19 pandemic rages on in the U.S., with case counts on the rise, once again. The first round of stimulus checks earlier this year provided vital financial assistance that helped Americans across the nation. But now that unemployment has remained high and state and local governments are mulling measures to slow down reopening efforts, there's been plenty of talk about new stimulus measures to send another set of checks to the public at large.

Some proposals suggest a framework for further stimulus that would be quite similar to what we've already seen, with reasonable targeting to those in need. However, there are a number of newer proposals that would not. In particular, the following three measures would even pay me a stimulus check -- and I'm the last person who should qualify for government assistance at this point.

Stacks of cash bundled in rubber bands, in various denominations.

Image source: Getty Images.

1. Automatic Boost to Communities Act

Rep. Rashida Tlaib (D-Mich.) and Rep. Pramila Jayapal (D-Wash.) introduced the Automatic Boost to Communities Act on April 17. The stimulus proposal, dubbed H.R. 6553 in the House of Representatives, would go several steps further than the first round of stimulus checks to get money into the hands of Americans.

Specifically, H.R. 6553 would immediately distribute $2,000 to all eligible Americans. Yet the ABC Act wouldn't stop there. The federal government would add another $2,000 per month as long as the coronavirus crisis lasted. Even after the COVID-19 pandemic ends, recipients would get another $1,000 for 12 months. Recipients could choose to get a preloaded debit card or have money deposited directly into bank accounts.

Unlike the original stimulus, though, payments under the ABC Act would go to every American citizen and resident. In addition, nonresident aliens who have been in the U.S. longer than the three-month period that started on Dec. 13, 2019 would also be eligible.

With no income restrictions, the ABC Act would pay people like me, who don't need assistance, tens of thousands of dollars. For instance, if the coronavirus crisis continues for another year, then my family of three would potentially receive $108,000 -- even though we've largely been untouched economically by the pandemic. Plenty of people richer than I am would also get money they don't need, and that makes the proposal broader than it needs to be.

2. Emergency Money for the People Act

A similar proposal from Rep. Ro Khanna (D-Calif.) and Rep. Tim Ryan (D-Ohio) would provide $2,000 monthly checks for a period of up to a year. Anyone 16 or over would qualify for stimulus checks under the Emergency Money for the People Act, including those who are also claimed as dependents on a parent's or someone else's tax return. Younger children would receive $500 per month.

This proposal is less profligate than the ABC Act in a couple of ways. The 12-month cap effectively maxes out at $24,000 per person. For my family, that'd amount to $54,000. Moreover, this proposal at least has a limitation based on income. However, at $260,000 for married couples, the income level is quite high -- and again, it doesn't require any health or financial harm from the coronavirus to claim it.

3. American Tax Rebate and Incentive Program Act

Finally, one targeted measure from lawmakers would seek to provide some support for the ailing travel industry. As introduced by Sen. Martha McSally (R-Ariz.), the American TRIP Act would provide a 50% credit on spending of up to $4,000 for single taxpayers, $8,000 for joint filers, and an extra $500 per qualifying child in 2020 and 2021 that goes toward permitted travel expenses, including airfare, rental car charges, hotels, theme parks, and restaurants.

As introduced, the bill has no income limitations. That allows the rich to use it to the same extent as the poor, but it requires that the destination be at least 50 miles from the taxpayer's home. That makes it easier for the wealthy to use, further skewing the impact. My family travels regularly whenever travel restrictions permit, but all this does is subsidize travel spending that I'd be doing anyway.

Demand-targeted stimulus packages

Millions of people really do need stimulus checks in order to make ends meet. But I'm not one of them, and a surprising number of stimulus proposals would pay me along with those who are truly in dire straits. The best answer for lawmakers considering ways to provide much-needed financial assistance is to direct it to those who've truly been hurt by the pandemic, rather than simply dropping money on everyone.

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