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Rational Politics

Thoughts by Charles E. Brown

The Non-Covid Relief Bill

ByCharles E. Brown

Mar 8, 2021
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In case you were too absorbed listening to Oprah Winfrey’s self-serving interview with Prince Harry and his narcissistic wife, Meghan Markel, Congress passed a $1.9-trillion spending bill under the pseudo and misleading title of “The American Rescue Plan Act of 2021.” Of course, with unemployment numbers once again dropping and the economy starting to pick up steam again due to increased availability of the COVID vaccine you might not have been aware that America needed rescuing.

Rest assured, if the $1.9-trillion has you stunned, the Democrats are already working on another one. To quote Senate Majority Leader Chuck Schumer: “Our No. 1 lodestar is going to be helping the American people and if they need more help, we’ll do another bill.”

Ostensibly, this bill was to help for pandemic relief. Except for one small problem…only a small portion of the money is actually going for relief. Most of it is going to government unions and cradle-to-grave entitlements that the Democrats want to make permanent. Let’s take this step-by-step.

Originally in the bill the Democrats wanted a $400 a week jobless benefit. However, as Senator Joe Manchin of West Virginia pointed out it would discourage unemployed workers in his state from returning to work. There is absolutely no work incentives in the bill. Ultimately, the Democrats lowered the figure to $300 a week which means that, combined with state benefits, unemployed workers in West Virginia will make $600 a week for sitting home and doing nothing. Now, let’s add to that the fact that the bill makes the first $10,200 exempt from federal taxes when the household income is less than $150,000. That gives the benefit an additional 24% boost.

Ultimately, this is going to slow the labor market’s recovery as the pandemic eases and add to a shortage of workers in many industries.

Now, if all of that wasn’t enough of a nice Christmas present, the bill is sending another $1,400 to individuals who make up to $75,000 a year and $2,800 to couples making up to $150,000. PLUS another $1,400 for each dependent. The average salary of most non-government, production-level workers is around $50,000 and Republicans wanted to lower the threshold to that. However, Democrats refused because would exclude many government workers.

The new bill would also raise the refundable tax credit for each child under the age of 6 from its present $2,000 to a full $3,600 and $3,000 for those up to age 17. This means that people who pay little or no taxes will receive a hefty refund, even if they decide to go back to work. But, if that isn’t enough, it would also give parents an additional, but non-refundable, tax credit of $4,000 for one child and $8,000 for two or more. This is up from $1,050 and $2,100. This is an incentive for teachers unions to keep the schools closed because government will now be picking up a lot of the tab for child care expenses.

If all of this isn’t enough, a repacked version of Obamacare is back. The bill is geared to lure people to the exchanges by sweeting the subsidies. Households making 400% above the poverty line would qualify for subsidies with premiums capped at 8.5% of their income. Most unemployed wouldn’t have to pay a penny toward premiums. Once again, less incentive to return to work.

At present, there is a thing called the “earned income tax credit” for those who work but make under a certain amount. This bill has now retitled that to the “UNEARNED income tax credit.” All this is is income redistribution. And, to add, most can use their 2019 income as a base for determining the credit.

Then there is a 15% food stamp boost, a $27-billion rental and utility assistance, and a $25-billion relief clause for those who need to cover back rent. All of this, as I said earlier, as Covid vaccine rollout is accelerating and the economy is showing strong signs of recovery,

In the end, this is the next stop to cradle-to-grave government entitlements with the only real beneficiaries being the politicians who passed this monstrosity that we can ill-afford. This will solidify government as the income provider while destroying any obligation on the part of American citizens to work.

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