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Coronavirus Checks Go to Lowest-Income Americans First

Our coronavirus relief checks from the $2.2-trillion emergency legislation passed last week by Congress will take a little time to arrive. Folks who’ve filed taxes and provided the IRS with their bank account numbers will get direct deposit starting the week of April 13 (see: take off your tinfoil hat, get faster service). The IRS will start cranking out paper checks around May 4, but its printer can only run and stamp and send five million checks a week. When you have a hundred million checks to print, that’s twenty weeks, through September, to do the whole job.

But the relief package has a nice progressive ring to it:

The checks will be issued in reverse order of adjusted gross income, meaning that people with the lowest income will get payments first [“Some May Not Receive Stimulus Checks Until August,” AP via KELO-TV, 2020.04.02].

I have no problem with that. Help the folks with the greatest need first.

Small businesses are supposed to be able to start applying for paycheck protection loans from banks today. Alas, that $350 billion tranche will probably go to the big boys first:

Operators of name-brand hotel, restaurant and service chains and franchises with thousands of employees at locations scattered across the U.S. are eligible. Lobbyists are also pushing the Small Business Administration to interpret the law generously to help sectors devastated by mandatory business closures and stay-at-home orders, possibly making the aid available to international fast food and lodging giants and allowing individual owners to get around a $10 million cap on loans.

While Congress could approve more money later on, the program as it stands is expected to run out quickly. That could mean applicants who have the financial and legal expertise of a larger organization might be able to maximize their benefits, not leaving much for smaller businesses, especially those who wait or have problems applying.

“I’m certain that’s what’s going to happen,” said Lauren Friel, the owner of a wine bar in Somerville, Massachusetts, that has been closed for three weeks. “It makes me really angry. It’s outrageous. They are going to walk away with their pockets full of cash.”

…”It’s hard for me to say this: There is only $350 billion in this fund. Every big restaurant and hotel chain is going to be going after this money. It’s not going to last,” said Ron Feldman, chief development officer at ApplePie Capital, which has been helping businesses get ready to apply.

“If you want to get this loan, speed is your friend,” Feldman told 2,000 franchise industry officials on a conference call this week [Ryan J. Foley, “Stimulus Aid for ‘Small Business’ Will Go to Some Big Chains,” AP via Minneapolis Star Tribune, 2020.04.02].

If Congress adds money to the small-business relief fund, it should consider stronger measures to direct the aid to the real small businesses most in need, as appears to be happening with the individual relief.

13 Comments

  1. Eve Fisher 2020-04-03

    That’s the best thing I’ve heard this administration do yet.

  2. Donna K 2020-04-03

    Why are we not sending out gift cards? Our large retiree population will be forced to work and pick up the slack once again. I’m so sick of Trump bailing out his oil/Russia friends. Please help it stop! Blue wave 2020!

  3. jerry 2020-04-03

    Most, if not all, of these low income folks have no bank account. So how they gonna cash the check? Will it be like the crooks and liars at Jackson Hewitt, Liberty, and H & R Block do and give you a debit card that charges you for each time you use it? Of course they will. That is how to further make money on the poor.

  4. Cory Allen Heidelberger Post author | 2020-04-03

    Gift cards would indeed be more flexible for folks who don’t have access to banking.

    Of course, on the downside, a gift card doesn’t help you if you’re dealing with a neighbor or a contractor who only takes cash. Plus, if we send gift cards, how do we ensure that bandits don’t simply raid everyone’s mailbox on relief-check day and steal their relief cards? To mail out EBT-style debit cards, we have to have some kind of secure distribution mechanism. Would that take longer than checks?

    Could we pass an amendment requiring banks to cash cootie-relief checks free of charge?

  5. jerry 2020-04-03

    The tax prepare folks can get those to you in a couple of days. So if those came by plastic, it would make more sense to all. So yeah Cory, an EBT type of card could be used immediately for food and for whatever…as long as the vendor has a card reader. Most do now, with Square and the like.

    Regarding the distribution, most low income folks are already in the EBT system with up to date addresses. These could be sent out in the postal deliveries so they then could call in to activate the card. Of course there will be events where the cards are stolen, but they can be replaced and shut down, just like they do now with fraudulent use. Sending checks is so 1929 ish. Electronic transfer cards would be the safest and the quickest.

    Shouldn’t be a problem….with Democratic leadership. With republican leadership, always and I mean always, the buddy system has to profit or they will roll up into the fetal/fecal position until they have their bottoms pampered.

  6. mike from iowa 2020-04-03

    If the guv doesn’t do something about people behind in child support, there will be an awful lot of unhappy fathers who wind up with nothing from the stimulus. Like then or not, they do contribute to the economy and if they get laid off, stealing from them is a double whammy.

  7. mike from iowa 2020-04-03

    The reason given that some checks will be delayed up to five months is the printer can only do 5 million checks per week. 5 mil x 20 weeks = 100 mil.

  8. Donna K 2020-04-03

    If we were smart enough to elect a democrat everyone would already have a card and at the touch of a button they would recharge and we would stimulate the economy! Economics 101, get the money to the people fast! Blue Wave 2020!

  9. Richard Schriever 2020-04-03

    mike – those pappas been stealin’ from their babies. But you get sympathetic?

  10. jerry 2020-04-03

    How would you know that Richard Schriever?

  11. Debbo 2020-04-03

    People who receiving Soc Sec should get deposits right away too, since they already are.

  12. Debbo 2020-04-04

    This is what Germany is doing:

    It sends people home or slashes their hours substantially, but keeps them officially employed with the state funding around two-thirds of their salary.

    Essentially, workers get as much as two-thirds of their pay even if they don’t work. And the company is not burdened by staff costs in times of severe economic stress.

    “Kurzarbeit is a great tool both for employees and employers as it gives the former income security and the latter more security for planning the next months when the economy really contracts.”
    is.gd/9NsnwC

  13. jerry 2020-04-04

    In June, Post Office will run out of money. EB5 Rounds and all the rest of the Grover Norquist crew will finally get their wish, drown government in a bathtub. How we gonna send checks when there is no post office? What a bunch of losers that is making us all losers. Open up the tattoo shops so we can put that big “L” for loser on our foreheads…those shops are now essential.

    Anyone else tired of republicans in office leadership positions? Geez man, even the in third world country’s they have a postal system. Farmers and ranchers out in the rural areas will now have to get all their news from Rush and Fox News…How will EB5 Rounds, Thune and Dirty get their propaganda out? Maybe a town crier to drive down the roads with a loud speaker.

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