Funding stimulus checks with the Pentagon budget
Speaking Security Newsletter | Note n°181 | 29 November 2022
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Situation
Not too long after reneging on the promised $2,000 relief checks after the 2020 elections, the Biden administration and Democratic leadership signaled that stimulus payments were no longer a priority. This decision was made despite congressional requests and the overall popularity of the idea (for example, a change.org petition for a fourth round of stimulus payments garnered well over 3 million signatures).
Their excuse was that the focus should be on passing the infrastructure and reconciliation bills, the two central pieces of Biden’s domestic plan. Fighting for transitory stimulus checks would zap political energy from enacting this multi-year, multi-trillion dollar social spending agenda.
It ended up as a multi-billion dollar agenda: The infrastructure bill ended up as a mere shell of the original plan (from $2.7 trillion down to $548 billion). So did the reconciliation bill ($3.5 trillion to $437 billion). The provisions that were said to be suitable replacements for stimulus payments—including the child tax credit, child care and universal pre-K, paid family and medical leave, affordable housing, medicaid home care, education aid—were all left out of the final product.
^Alt text for screen readers: Biden’s domestic agenda mostly failed to materialize. The infrastructure and reconciliation bills lost 80 and 88 percent of their value, from proposal to enactment. This column chart shows the reconciliation bill going from $3.5 trillion proposed to $437 billion passed, and the infrastructure bill going from $2.7 trillion proposed to $548 billion passed. Data via White House and Senate documents, Penn Wharton Budget Model. More at stephen semler dot substack dot com.
Stimulus checks are still needed and remain very popular. A September poll found that 63% of Americans are living paycheck to paycheck; an October poll found that 63% support another round of stimulus payments to help with the cost of living crisis.
The problem is that Biden has soured on non-military spending. Not on military spending, however. Biden has already expressed support for the $857.5 billion* military authorization bill for FY2023 that the Senate is debating now (*this total excludes all past and planned Ukraine military aid, which is funded through supplemental legislation).
Theoretically, Biden could enact both stimulus checks and his monstrous Pentagon budget. Spending is a political decision, though, and Biden has made his: austerity for social programs and a blank check for military ones. That’s why I chose the Pentagon budget as the funding mechanism for my proposal below—it’s where the money is.
A modest proposal to convert a chunk of military spending authorized for FY2023 into $600 stimulus checks
Previous legislation that sought to convert military spending to social spending have taken the form of standalone bills, amendments to appropriations bills, and amendments to authorization bills. Here’s what an amendment to the FY2023 military authorization bill could look like.
The legislation illustrated here would cut $141 billion—the amount spent on the $600 stimulus checks, per IRS data—from the amount authorized for the Pentagon for FY2023. (Reductions would not apply to the accounts for military personnel and the Defense Health Program). The $141 billion then goes to the Treasury to repeat the second round of stimulus payments. If enacted, military spending in real terms would return to about what it was the year before Trump entered office. This is a very modest proposal.
^Note: more than half of the annual Pentagon budget goes to for-profit contractors.
An approximation of what the legislative text might look like for this proposal
Purpose: To reduce the Pentagon budget by $141 billion and invest that money into a fourth round of stimulus payments.
Reduction: The amount authorized to be appropriated for fiscal year 2023 by this Act is the aggregate amount authorized to be appropriated for fiscal year 2023 by this Act, minus $141 billion.
Allocation: The reduction shall be applied on a pro rata basis among the accounts and funds for which amounts are authorized to appropriated by this Act (other than military personnel and the Defense Health Program) across each program, project, and activity funded by the account or fund concerned and be used by the Secretary of the Treasury to carry out a fourth round of stimulus payments.
Fourth round of stimulus payments: A redux of the second round of stimulus payments. Section 272(a) of the COVID-related Tax Relief Act of 2020, enacted as Subtitle B of Title II of Division N of the Consolidated Appropriations Act, 2021, Public Law 116-260, 134 Stat. 1182 (December 27, 2020), added section 6428A to the Internal Revenue Code. Section 6428A provided an eligible person a refundable tax credit of up to $600 ($1,200 for eligible individuals filing a joint tax return), plus $600 per qualifying child of the eligible individual(s). Section 6428A(f)(3)(A) instructed the Secretary of the Treasury to make advance refunds of this tax credit “as rapidly as possible.”
*At its core, this amendment functions the same as Bernie Sanders’ proposed amendment to the FY2021 version of the same bill, which would've made a 10% cut and redirected the savings to the Treasury to fund grants for various social programs.
-Stephen (@stephensemler; stephen@securityreform.org)
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