3/4 of House Dems back regular payments

Lawmakers are coalescing around a call for regular direct payments to help families impacted by the crisis lasting until the economy recovers, including:

CARES 2: Fixes needed to get more money to more people, more quickly

Following the passage of the CARES Act that gave direct cash assistance to millions of American families, Congress is already working on CARES 2 -- another direct cash infusion to help those struggling from the economic crisis. 

Of CARES 2, Speaker Pelosi said, “Let’s do the same bill we just did, make some changes to make it current.” 

Extraordinarily, CARES 1 already expanded who qualifies for cash assistance in America. UI was dramatically expanded to include gig, part-time and freelance workers for the first time. And the one-time $1,200 checks will go to nearly every American making less than $100,000, including those with no income for the first time. These signal a significant shift in our understanding of who is deserving of help in America.

But CARES wasn’t perfect. As we look at CARES 2, Congress needs to “make some changes to make it current.” Already, some Members of Congress have proposed solutions -- but there’s more to be done to address the gaps and the deepening need:

The one-time $1,200 payments aren’t enough. 

Large groups of Americans were left out.

  • Undocumented workers and adults and children with Social Security numbers who live in mixed-status households are excluded from direct payments (though the latter groups were eligible for tax cuts under the TCJA). Rep. Lou Correa introduced a bill that would fix this by including individuals who file taxes using an ITIN. Rep. Ilhan Omar is planning to address mixed status households.

  • College students and older high school students are not eligible. Senator Tina Smith introduced a bill backed by Democratic Whip Dick Durbin that would fix this by making older children and adult dependents eligible for a direct payment. The same bill was introduced in the House by Rep. Angie Craig.

Many people won’t see their checks for months, or at all.

  • Some Americans will have to wait months for payments. While the first 60 million payments are expected to go out next week via direct deposit--a sign that the Treasury Department is capable of making large numbers of payments quickly--Americans who don’t have current bank information with the Treasury Department will have to wait longer for the agency to issue paper checks. While many of these delays will resolve once the Treasury Department has people’s information, Congress should look at using SNAP/TANF cards and Treasury prepaid debit cards as additional ways to get money out faster.

  • Many low-income veterans, seniors, and people with disabilities who don’t typically file tax returns would have to do so in order to receive benefits. The administration changed its guidance to allow Social Security recipients to receive payments automatically, and Senators Brown, Hassan, Bennet and Booker have urged the Treasury Department to do the same for SSI and VA beneficiaries.

  • Many of the most vulnerable, including the unbanked and those whose incomes are so low that they don’t file taxes, won’t receive any payments at all unless they file tax returns they’re not otherwise required to file. Congress must make it easier for these Americans to receive payments without having to go through the burdensome process of filing a tax return. 

Source: https://www.economicsecurityproject.org/em...

By the Numbers: A Cost-of-Living Refund

The Earned Income Tax Credit (EITC) is recognized as one of the country’s most effective anti-poverty programs. Refundable tax credits including the EITC helped keep nearly 8 million Americans out of poverty in 2018. 

It is because of this success that Economic Security Project is leading a campaign to expand and modernize the EITC to put more money in the pockets of those who need it most. 

The Cost-of-Living Refund would increase the number of people eligible for the EITC by reaching further into the middle class, including workers without dependent children, and including workers starting at age 18. The policy would also broaden the definition of work to include family caregivers and low-income students. Learn more about the Cost-of-Living Refund and Economic Security Project’s campaign.

In recognition of #EITCAwarenessDay, here’s a look at the Cost-of-Living Refund by the numbers:

3.1 million: The number of households in ME and CA that will be helped with the rising cost of living and housing due to the recent EITC expansions.

153.7 million: The number of Americans that would benefit from a Cost-of-Living Refund, compared to 25 million Americans who received the EITC in 2019.

$400: The amount of an unexpected expense that 4-in-10 Americans say could push them into financial ruin. 

$4,000: The amount an eligible individual could receive per year with a Cost-of-Living Refund. Married couples can receive up to $8,000.

$90,000: The maximum amount a family can make and be eligible for a Cost-of-Living Refund. The Cost-of-Living Refund reaches into the middle class to reduce financial instability.
43.5 million: The number of Americans that were unpaid caregivers in the last year. The Cost-of-Living Refund would broaden the definition of work to include family caregivers, putting money in the pockets of millions more people.

Strengthening and Modernizing the California EITC to Fight Poverty, Inequality, and the Rising Cost of Living

The steep and rising cost of living and housing, coupled with stagnating incomes, means too many families in California aren’t feeling the prosperous economy. Many people live on the financial brink, as the cost of middle-class life has dramatically increased—from housing to childcare to medical costs—while wages lag behind.

At the same time, income inequality is at a peak, and is worse in California than in most other states:  CA claims both the greatest number of billionaires and the highest poverty rate in the nation. This dramatic disparity is on display in every corner of our state, and our current tax system exacerbates both of these problems -- many low-income people pay more of their income in state and local taxes than most other taxpayers, according to Institute for Taxation and Economic Policy data.

As a simple and effective approach to fight rising economic inequality and financial instability, we need to put more money back in the pockets of the working and middle-class people who need it most. California should do this by modernizing and expanding the CalEITC with a Cost-of-Living Refund.

We’ve worked for years alongside partners on how we might modernize and expand the state’s Earned Income Tax Credit to do just that:  put money back into the pockets of Californians. The policy details are in a white paper that we’re releasing today.

The white paper, “Strengthening and Modernizing the California EITC to Fight Poverty, Inequality, and the Rising Cost of Living,” lays out a vision and sets a clear course for achieving a more affordable and accessible California. We could build upon the existing CalEITC with these modernizations:

  • Expand the current CalEITC to reach further up the income scale to help Californians who are working while struggling to keep up with the state's rising cost of living;

  • Expand the definition of work by including unpaid family caregivers and students; and

  • Create an option to receive the benefit monthly so people feel it working in their lives.

California’s affordability challenge is formidable. It will take bold action and a sustained commitment over time to create a California where all can thrive. In the coming weeks the new Governor and state lawmakers will be determining their priorities for the year.

We believe an affordability agenda must be a top priority, and the new Governor and state leaders are poised to lead on policy to benefit millions of hard-working Californians by expanding and modernizing the CalEITC to become the most ambitious in the nation.

Lead the way, California.