The Covid Welfare State

The $1.9 trillion Democratic bill provides a guaranteed income unlinked to work 

WSJ editorial. Excerpts:

"Only a small part of what Democrats passed is for pandemic or economic relief. It’s mainly a way station on their high-speed train to a cradle-to-grave welfare-entitlement state. Most of the $1.9 trillion will flow to government unions or supposedly temporary income transfers that Democrats intend to make permanent later this year. Let’s run down the list." 

"To satisfy Mr. Manchin, they lowered the weekly enhancement to $300. Most unemployed workers will still make at least $600 per week when state benefits are included and as much as they did working. Democrats also exempted the first $10,200 in payments collected last year from federal taxes for households with less than $150,000 in income. This exemption will boost their value by up to 24% depending on a household’s income and tax bracket. 

All of this will slow the labor market’s recovery as the pandemic eases. There’s already a shortage of workers in many industries, notably construction as the housing market booms.

• The bill sends another $1,400 to individuals earning up to $75,000 ($2,800 for couples with $150,000 income) plus $1,400 per dependent including kids in college. This follows the $1,200 for individuals and $500 per dependent in the Cares Act and $600 for each in the December relief bill. In total, most non-affluent families of four will get $11,400 in direct payments. 

Republicans pushed to lower the individual income threshold to $50,000, which is about as much as the average production-level worker makes. But Democrats refused because it would exclude many government workers, especially those in blue states with higher salaries. Oregon Sen. Ron Wyden wants to put these payments on autopilot so they don’t lapse until unemployment falls below a certain level."