Senate Republicans Moving Quickly to Finalize ‘Stage 3’ Economic Rescue

In this Dec. 18, 2019, file photo the U.S. Capitol building is illuminated by the rising sun on Capitol Hill in Washington. Congress is shutting the Capitol and all House and Senate office buildings to the public until April in reaction to the spread of the coronavirus.
Matt Rourke, AP

Senate Republicans are moving quickly to finalize legislation for ‘Stage 3’ of the economic rescue package, including provisions that would provide U.S. households with direct payments from the federal government.

The current proposal would include payments of $1,200 for individuals and $2,400 for married couples, according to top Senate aides. The payments would be means-tested, phasing out for individuals with incomes over $75,000 in income or couples earning more than $150,000. The amounts would be greater for families with children.

Rescue payments to individuals is a novel government program endorsed by the Trump administration and many conservatives, who view it as a crucial step in preventing widespread economic chaos and better than plans that would have politicians choose winners and losers by directing where the funds should be spent.

Conservative stalwart Tim Carney, the author of two books critical of crony capitalism and bailouts, called for such payments in a column Thursday:

Congress should pass a reparations package.

Think about it. Governments are forcing businesses to shut down and telling customers and employees to stay away from the ones that are open. Governments are cutting off trade and tourism. The U.S. government and state and local governments are directly harming businesses in pursuit of a higher good.

So, Washington ought to be talking about making it up to the businesses.

Breitbart News was the first right-of-center news outfit to call for payments to individuals. It has since been endorsed by many leading conservatives as a healthy alternative to the left’s preference for socialism and government-directed corporatism.

Others will worry about the precedent set by a huge program of government “handouts.” But the usual objections to such things do not apply here. There’s no moral hazard risk, no rewarding people for bad behavior, or socializing the costs of risks undertaken for private gain. This isn’t the launch of a big government spending program or a new welfare system. It’s just a temporary series of cash payments that the private sector will be free to use as it chooses. Instead of big government, American families will decide what to do with the cash. If it helps, think of this as a refund on the taxes we’ve paid all these years that have helped build our government into one of the few institutions in the world that can undertake this kind of spending in an economic emergency.

Matt Boyle, Breitbart’s Washington Political Editor, recently argued that if properly handled, this idea could result in an epochal political realignment along the line of that achieved by FDR with the New Deal.

Sources on Capitol Hil say the provisions are still in flux and could change. Some Republican Senators want to see the income caps lifted to allow payments to higher income individuals, a move that would make the rescue package more effective and easier to execute. The most effective policy would be to deliver the rescue checks to everyone–perhaps with the caveat that they could be taxed as income later, which would decrease the subsidy to people in the highest income brackets.

Currently, however, only 45 or so members of the GOP caucus in the Senate are backing the bill, according to a person familiar with the matter. Some Republican Senators are holding out against the payments, the person said.  So unless these Senators decide to join their colleagues in endorsing the conservative plan to save the American economy, the plan will need Senate Democrat votes to pass.

–Washington Political Editor Matt Boyle contributed to this report.

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