People rally during a demonstration in support of COVID-19 relief organized by Shutdown DC at the National Mall on February 25, 2021 in Washington, DC.
El Drago | Getty Images
When America began shutting down in the wake of the onset of COVID-19, it meant that millions of families were suddenly without the income they needed.
Within weeks, Congress passed a massive emergency aid package aimed at providing relief. That law had “economic impact payments” checks that amounted to $1,200 per eligible adult.
There have been a total of three rounds of such checks — including an additional payment of up to $600 and $1,400 per person in 2021 — called “stimulus checks” by many Americans.
While the government had previously deployed stimulus checks – especially in the wake of the financial crisis – the size and scope of direct checks was in many ways a novel experiment.
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“Three of them together were vastly larger than the government,” said Howard Glickman, senior fellow at the Urban-Brookings Tax Policy Center.
With each stimulus check, the IRS and the US Treasury Department became faster and more efficient in deploying the funds.
In the first few weeks of the first stimulus check program in 2020, the IRS deployed 89.5 million payments.
When the third stimulus check was approved by Congress on March 11, 2021, the IRS announced on March 17 that it had already distributed nearly 90 million payments.
“Overall, the IRS gets the credit,” Glickman said. “They did an extraordinary job of dispensing these checks in very difficult circumstances.”
To be sure, there were a few glitches along the way, including some preliminary checks: dead americans sent,
Experts also say that funding could have been more targeted, as some good taxpayers who were financially unaffected by the pandemic also received funds.
“There was a trade-off between speed and accuracy,” said Erica York, senior economist and research manager at the Tax Foundation.
“The payment was not as targeted as it might have been if lawmakers had other options,” York said. “A high priority for MPs was to get relief fast due to the nature of the pandemic.”
About 90% of the taxpayers received the money even though they were facing financial hardship, she said.
In an attempt to limit the number of high-income earners, a third $1,400 check ended more quickly.
According to York, as payments were deployed, the number of households actually spending on them declined. While earlier checks were mostly devoted to household spending, later checks were more commonly used to save or pay off debt – a trend seen across all income levels.
missing payment
One issue that persisted during the deployment of incentive checks, and then with monthly child tax credit payments, was reaching non-tax filers, who typically don’t file returns because their income is too low.
In January 2021, President Joe Biden issued an executive order To renew government efforts to find the estimated 8 million people who were still without checks.
While the numbers may drop with additional outreach, it is possible that some may still have fallen through the cracks.
There was no easy way for him to earn money.
dorian warren
Co-Chair of Community Change
Dorian Warren, co-president of Community Change, said, “It was really difficult to get money into the hands of the most vulnerable, people who are transient or unbanked or have little or no internet access, especially in rural areas. Huh.” A national organization focused on helping low-income Americans, especially people of color.
“There was no easy way for them to get money,” he said.
In addition, those people may be hesitant to sign up for the payment, due to the complexity of the form or fear and shame associated with the IRS, Warren said.
Too Much Help?
House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Mitch McConnell, R-Ky., at the US Capitol to honor the late Representative John Lewis, D-Ga., on July 29, 2020 in Washington, DC.
Brendan Smilowski | AFP | Bloomberg via Getty Images
For much of 2020, lawmakers on Capitol Hill were confused about whether to send additional payments. Former President Donald Trump Advocating a $2,000 check round. so did then-president-elect Biden,
But Washington’s leaders bargained for $600 per person for the second round, which led to another legislative package with a payout of $1,400 after Biden was elected.
Those last checks happened just as the economy was about to recover.
“With the advantage of rear sight, you could say it was probably unnecessary,” Glickman said of the third round of the check. “But I think it was a fair call at the time.”
Now that the US has record high inflation, some argue that the stimulus money may have fueled those issues.
“There is inflation across the board, and the US is experiencing a distinctly high inflation,” York said. “I think it’s driven not only by the stimulus payments, but by the size of the relief overall.”
Yet Glickman argues that price increases have been influenced by supply rather than demand issues – and those problems are not directly linked to stimulus money.
These include restrictions on factory workers due to the pandemic, problems with shipping from abroad, and now the Russo-Ukraine war, which has led to additional bottlenecks.
“It’s a little too convenient to blame inflation on excessive stimulus payments,” Glickman said. “Not that he had nothing to do with it, but he doesn’t have as much to do with it as some would suggest.”