Support for direct cash payments in an unprecedented crisis doesn’t equal support for Yang’s massively expensive universal-basic-income plan.
A key part of Congress’s fiscal response to the coronavirus crisis will almost certainly involve sending checks to most citizens across the country.
On Monday, Senator Mitt Romney (R., Utah) proposed sending $1,000 to all American adults 18 years of age and over. Senator Tom Cotton (R., Ark.) released his own proposal: “Authorize the Treasury Department to immediately cut a tax-rebate check of $1,000 for every adult tax filer making less than $100,000 per year and $500 for each claimed dependent. Married couples filing jointly that make less than $200,000 per year would be eligible for a $2,000 tax-rebate check.”
While the details are being hammered out, Secretary of the Treasury Steve Mnuchin has signaled support for the idea of sending out a first round of $1,000 checks to most American adults — he has specified that he doesn’t want any of this money going out to millionaires — with another round of $1,000 checks to come later if necessary. While many Republicans are also pushing for a payroll-tax holiday, they recognize that suspending the payroll tax won’t help those who lose their jobs — through no fault of their own or their employers — anyway.
Across the Internet, many journalists and pundits of different political stripes have commented that the strong bipartisan support for such direct cash assistance has somehow vindicated Andrew Yang, the Democratic presidential candidate who proposed sending $1,000 checks to all American adults every month in perpetuity.
“Andrew Yang’s plan to give Americans $1,000 could become reality during coronavirus outbreak,” reads one headline at the Washington Post. “Certainly I would never hope that UBI gets adopted because of this terrible virus,” Yang told the paper. “But I will say it’s somewhat surreal to suspend my presidential campaign in February and see it potentially implemented in March.”
The salient thing to remember here is that the $1,000 checks gaining support on Capitol Hill at the moment would be an extraordinary response to an extraordinary circumstance, rather than a new, immutable monthly entitlement. Yang’s proposal to send a $1,000 check to every American adult every month would cost $3 trillion a year — more than $30 trillion over the next decade when you account for population growth — for a country whose federal government spent $4.4 trillion total in 2019. One round of $1,000 checks to every American adult, by contrast, would cost some $210 billion. (If the government suspended the payroll tax through the end of the year, its tax revenue would fall by $800 billion.) Yes, more rounds of checks might be needed depending on the length of the current crisis. But there won’t be a broad, bipartisan congressional backing for Yang’s plan any time soon.
Saying Yang has now been vindicated would be akin to saying that a presidential candidate who ran on a platform of rationing basic goods like gasoline, rubber tires, and nylon during peacetime had been vindicated by the necessity of rationing during World War II. It’s entirely possible that the emergency cash payments now under discussion might increase interest in Yang’s proposal, but there is little reason to think that they’ll bring it any closer to being implemented. It remains unlikely to ever happen for the same reason it was always unlikely to happen: A nation already drowning in red ink simply can’t afford to almost double its annual budget permanently.