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GOP Coronavirus Relief Plan Criticized for Neglecting Low-Income Households

Written by on March 20, 2020


As the coronavirus continues to spread, major U.S. industries have become increasingly paralyzed. The service sector suffered one of the hardest blows, as many businesses were forced to shut their doors in an effort to minimize social interaction and the further spread of the deadly virus. These restrictions have resulted in widespread layoffs, which have left many working-class Americans with no income and growing uncertainty. 

However, some Republican lawmakers believe they have a solution. On Thursday, U.S. Senate Majority Leader Mitch McConnell unveiled the GOP’s $1 trillion stimulus plan that would put money into the pockets of Americans. Of that sum, about $300 billion would be loaned to small businesses and another $208 billion would be loaned to bigger companies, like airlines.

The package also includes includes rebates of $1,200 for individuals who earned less than $75,000 in 2018; couples who filed that filed joint taxes are eligible to receive $2,400 if they made less than $150,000. Individual taxpayers with higher incomes would receive a lower amount, as the rebate would decrease by $5 for every $100 they earned over $75,000. An additional $500 would be added for every dependent child.

But perhaps the most controversial element of the plan is how it affects lower-income families. The GOP bill proposes a measly $600 (or $1,200 per couple) stipend for Americans with little to no tax liability, but with at least $2,500 of qualified income. That income reportedly includes Social Security benefits and various pensions.

Per the Wall Street Journal:

But the way the minimum amount is structured means that many households won’t get the maximum benefit until an individual income reaches about $23,500 or a married couple’s income reaches about $47,000, according to Kyle Pomerleau of the National Enterprise Institute. About 64 million households with incomes below $50,000 wouldn’t get the maximum benefit, he said.

Many people have blasted the proposed relief package for effectively punishing the poorest American families. Political pundits have called on lawmakers to eliminate the reverse means-testing structure and ensure everyone receives enough cash to get through the global crisis.

“What possible reason could have motivated this limitation?” Jonathan Chait wrote in New York Magazine. “Saving government money by denying it to the people who need it the most? Punishing poor people for their decision to be poor? Those with the lowest incomes are the most likely to spend every dollar and the least likely to save it, making payments to the poor the most efficient form of stimulus, in addition to the most socially humane expenditure … Fortunately, Republicans need half a dozen Democratic votes to pass anything through the Senate. There is absolutely no reason for Democrats to let this outrage pass the upper chamber.”



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