The $2,000 payment and the Republican game around means-testing

David Sirota and Andrew Perez report on this week's maneuver by the Democrats to force Republican Senators to go on the record about an addition $2,000 payment in Senate Democrats’ Motion To Concede On $2,000 Checks Daily Poster 12/30/2020. It ge ts into the weeds of the parliamentary plays the details even those of us who followed it closely are unlikely to remember in a few weeks.

But we are currently seeing a preview of the kind of obstructionist approach the Republicans have already determined to use against the incoming Biden-Harris Administration. So these weeks are giving us clues on what to look for after Inauguration Day. This section talks about a move by corporate Democrats and centrists that proved useful for the Republicans in defeating this popular measure.

First came a barrage of attacks on the $2,000 checks initiative from Summers, a former hedge fund executive who as President Barack Obama’s national economic director stymied the push for more stimulus after the 2008 financial crisis.

Then the New York Times’ Paul Krugman pretended the wildly popular initiative is “divisive” and said “the economics aren't very good.” Timesman Tom Friedman, who married into a real estate empire, called the idea “crazy” and fretted that checks might go to “people who don't need the help.” The minions of billionaire Michael Bloomberg joined in with a house editorial demanding Congress block the checks.

Meanwhile, only weeks after the Washington Post news page told the harrowing tales of rising poverty and starvation in America, the paper’s editorial board argued against stimulus by insisting that “the economy has healed significantly.”

The Post — which is owned by the world’s richest man, Jeff Bezos — argued against the $2,000 checks by saying it is unjust that some rich people might in theory end up benefiting from the proposal (this, from the editorial board that still vociferously defends the 2008 Wall Street bailout that financed bonuses for wealthy bank executives who destroyed the global economy). The Post also borrowed spin from Summers, arguing that people probably won’t use the money because “restaurants are closed and air travel limited.”

This isn’t even close to true: Indoor dining was recently shut down in New York City and D.C., but restaurants are fully open in most states, and an unfortunate number of people are still flying.

All of this noise was quickly weaponized by McConnell, who in a Senate floor speech directly cited Summers and the Post as justification to stop the $2,000 checks to the two thirds of households in his own state who would benefit.

The argument that Krugman made was that unemployment insurance was more significant in providing aid to people than the one-time payment, though he later made it explicit that he understood that the "political economy" of the position, which I assume he meant as kind of "inside joke," because what we now call the academic field of Economics was previously known as Political Economy, a term still used by some left-leaning economists to emphasize the centrality of political decisions and institutions in macroeconomics.

My take: the economics aren't very good, but the political economy may make such checks necessary 2/ https://t.co/XY7d9E8SDY pic.twitter.com/EahrnNCGaj

— Paul Krugman (@paulkrugman) December 29, 2020

Krugman is right on the macroeconomics. The sums involved in extending unemployment insurance are larger than one-time payments of $2,000. And they are targeted to people who have lost their jobs and are still unemployed, but state unemployment funds are running short.

But unemployment insurance is distributed through state unemployment offices. And the systems in some states including Florida have been restricted by Republican governors and legislators in order to make it more and more difficult for people to qualify for unemployment insurance. In terms of distributing money quickly, the method used for the COVID relief payments in the spring which was also proposed for the new $2,000 checks of sending the funds to people who paid federal taxes last year is definitely quicker.

But as Krugman also recognized, a particular proposal in a particular moment may need to be judged differently than a longer-term program. The discussion of this was muddled by talking about by talking about the value of the one-time $2,000 payment in terms of it being economic stimulus. Because it is primarily a matter of emergency payments to people whose stimulative effects would be of some significance, but it's not an economic recovery program.

Sirota also notes how Senate Majority Leader Mitch McConnell used the argument of need against voting for the payment_

“The liberal economist Larry Summers, President Clinton’s Treasury Secretary and President Obama’s NEC director says, ‘There’s no good economic argument for universal $2,000 checks at this moment.’ McConnell said, adding: “Even the liberal Washington Post today is laughing at the political left demanding more huge giveaways with no relationship to actual need.”

This is part of a narrative that Republicans are accustomed to using, with their usual (minimal) regard for consistency. One of the political strengths of the Social Security and Medicare programs over decades has been that they are universal programs. They aren't means-tested, i.e., the benefits are not determined by the personal wealth or current income of the recipients. In fact, they provide much more critical support for the vast majority of the public than for the wealthiest. Especially for Medicare, because private health insurance would be unaffordable for pretty much anyone 65 and over.

Public schools are also a case of a government service that is not means-tested. Children of the poorest families can attend them as well as the children of the One Percent, although the financing mechanisms and the private school systems have in fact created radical class differences in education opportunity even in K-12 schooling.

On the other hand, programs like food support or Medicaid that are means-tested government programs targeted specifically to the poor can be and are stigmatized by Republicans as "welfare". The school privatization movement championed by the current national Secretary of Education, the plutocrat Betsy DeVos, has actually made major progress in stigmatizing public schools as inferior, i.e., "welfare."

But as McConnell demonstrated this week, Republicans will shamelessly argue against an emergency payment like this on the grounds that it is not means-tested and therefore an unnecessary giveaway to rich people. How it fits together is that they make this argument against programs that benefits ordinary people because (1) they are against them and (2) if they can't stop a program from being enacted, they prefer to have it means-tested so they can stigmatize it as "welfare." This is the approach they take with proposals for free public college, as RJ Escrow explained last year in What the Fight Over Means Testing Is Really About The American Prospect 08/07/2019.

It's disappointing as always to see that the Democrats are less agile with tactical maneuvers than the Republicans. Though not surprising, because that's been a feature of the asymmetric partisan polarization for decades now.

But the Democrats actually did better with the tactics and the way they used this issue to push their own narrative for the critical January Georgia Senate elections. Elect more serious left Members of Congress including by successfully primary-ing conservative corporate Democrats and - what do you know? - even Nancy Pelosi and Chuck Schumer start feeling pressure to act like actual Democrats!