Opinion | Biden’s Relief Plan Is a Trojan Horse. And I’m OK With That.

But his opening proposal should be more targeted to the most needy.

By Steven Rattner

Mr. Rattner served as counselor to the Treasury secretary in the Obama administration.

President Biden’s proposed $1.9 trillion Covid relief plan contains many commendable provisions, from money for speeding the vaccine rollout to aid for struggling states and cities.

That said, the measure, the American Rescue Plan, is also partly a legislative Trojan horse — an enormous aid package aimed at addressing needs that, in some cases, go well beyond the immediate challenges of Covid.

That’s generally OK by me; President Biden has wisely put helping all struggling Americans — whether their financial pain stems from the pandemic or not — at the top of his priority list.

But his administration can do so far more surgically, and with a nod toward our long-term fiscal challenges. We don’t necessarily need (at least not now) as much stimulus as he is offering. And some of the most expensive provisions are the least well targeted to help the neediest.

Topping that list: $1,400 checks to qualifying adult Americans, in addition to the $600 checks approved by Congress in December.

If structured like a recent House-passed bill, the eligibility for these checks doesn’t completely phase out until an income level of $310,000 (for a family of four), which means that some of the estimated $465 billion will go to workers in the top 10 percent — hardly a struggling group of Americans.

Nor do broad-based, one-time payments function as particularly effective economic stimulus. In the past, some research has suggested that Americans have more often used checks like this to increase savings or pay down debts.

And they appear to be doing that again. Mostly because they’ve been locked down, many middle and upper-middle-class Americans have been stashing money away at a ferocious rate.

The Harvard economist Jason Furman estimates that by March, there will be at least $1.8 trillion of “dry powder” in consumers’ bank accounts.

At least for now, merely putting cash into Americans’ pockets is not what’s needed for the overall economy; solving the public health crisis will unlock much deferred spending.

In proposing the expansion of other worthy programs, Mr. Biden should seek to better target them. The child tax credit currently provides $2,000 per child to married couples with annual incomes up to $400,000 and filing jointly. (Mr. Biden wants to increase this to $3,000.) Its companion, the child care tax credit, delivers at least partial benefits to higher income households — and does nothing for those who don’t pay taxes.

We can fairly debate appropriate phaseout levels; note that median income in the United States is just under $70,000 per family.

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