As Senate Majority Leader Chuck Schumer (D-N.Y.) moves to double down on budget reconciliation after a favorable ruling from Senate parliamentarian Elizabeth MacDonough in order to bring forward President Joe Biden’s $2.3 trillion infrastructure spending bill, a group of 21 Senate Democrats want to include recurring stimulus payments to American households.
“We urge you to include recurring direct payments and automatic unemployment insurance extensions tied to economic conditions in your Build Back Better long-term economic plan. This crisis is far from over, and families deserve certainty that they can put food on the table and keep a roof over their heads. Families should not be at the mercy of constantly-shifting legislative timelines and ad hoc solutions,” the letter to President Biden led by Sen. Ron Wyden (D-Oreg.) read.
This is by far the closest to a universal income proposal the nation has ever seen, and with the Senate still divided 50-50, Democrats will be anxious to accomplish as much of their agenda as possible via budget reconciliation before the 2022 midterms — which are almost never kind to the White House incumbent party.
In midterm elections from 1906 to 2018, the party that occupies the White House usually loses on average 31 seats in the House, and about three seats in the Senate. And with just a 10-seat majority in the House and a zero-seat majority in the Senate, 2022 could be the year Democrats lose Congressional majorities in the House and Senate.
Moreover, a negative 2022 outcome for Democrats could become more likely depending on how many big pieces of legislation are pushed through Congress on a partisan narrow basis.
And then that in turn could create a vicious cycle with an even greater incentive for Democrats to cram in as much as possible now and Nov. 2022, Democrats are wont to pass as much of their agenda items as fit into budgetary items.
So, expect a narrower public option.
Or a less expansive Green New Deal.
Or, in this case, universal income.
In many ways, the coronavirus lockdown and Congress’ response shows on a grand scale what universal income schemes have the potential to do — which is to shut down the entire economy.
If you tell people they can stay home and still earn money, unsurprisingly, many will do just that, given the incentive for people to stay home, millions Americans will respond by ceasing labor participation.
And if too many give into this mindset, when the pandemic is over it has the potential to utterly devastate the U.S. economy, with reverberations felt for a generation just like the financial crisis.
Back then, Congress kept on readily extending unemployment benefits for up to 99 weeks. Remember? Do we want to do that again?
Certainly, the economy is still about 7.8 million jobs short of where it was in Feb. 2020 before the pandemic job losses peaked at 25 million in April. Would the jobs gains be faster if there were fewer checks?
That is why as soon as the virus passes, the unemployment assistance and the frequent checks—families of four have gotten over $10,000 in the past year.
To prevent a long-term recession and unemployment situation like in 2009, American workers should be incentivized to go look for a job as soon as possible. The longer the recurring payments continue, the longer the recession may continue. Be warned.
Robert Romano is the Vice President of Public Policy at Americans for Limited Government.