Third stimulus check: what would a "targeted" package mean?

With just a week to go until President-elect Joe Biden officially takes office, hopes are high for the imminent arrival of another large-scale covid-19 economic relief bill. The Democrats flipped the Senate with their victories in the Georgia runoff races and now have unified power in Washington with which to enact Biden’s agenda.

Speaking recently, Biden has reaffirmed his commitment to $2,000 stimulus checks, promising that another round of direct payments is a top priority during his early days in office.

However Democrat Senator Joe Manchin is pushing for a difference outcome. In an interview with CNN’s ‘State of the Union’ last Sunday he argued that “it’s time now to target where the money goes”, rather than offering a third round of stimulus checks.

Democrat Senator demands Congress “target where the money goes”

During the interview, Manchin said that he was in favour of helping people who have been affected by the pandemic but argued that stimulus checks were not the most effective way to support those who are in real need of assistance.

"I am on board by helping people that need help, people that really can't make it, people who don't have a job, they can't put food on their table. I am in total support of helping them," he said.

Manchin said that stimulus checks were not the answer, claiming that they are being sent to people who do not really need them:

"Sending checks to people that basically already have a check and aren't going to be able spend that or are not going to spend it, usually are putting it in their savings account right now, that's not who we are. We have done an awful lot of that, it's time now to target where the money goes.”

Calls for “targeted” relief are nothing new

Manchin is far from the first Senator to call for more focused stimulus spending, but that has generally been the position of Republican lawmakers. While negotiations over the second economic relief bill were stalling in Congress last autumn, Senate Majority Leader Mitch McConnell opposed the $2.2 trillion HEROES Act tabled by House Democrats for just that reason.

Speaking in October 2020 McConnell said that he wanted to pass a “targeted relief bill” and supported a $500 billion package. This also became known as the ‘skinny bill’ that was flatly rejected by Speaker of the House Nancy Pelosi because it did not include stimulus checks. A “targeted” covid relief bill is less likely to include stimulus checks of the type that we have seen so far, where the majority of Americans are eligible.

What would a targeted stimulus bill look like?

Rather than offering financial support in the form of direct payments, Congress could pass a bill that uses that money to increase funding for federal programmes. For example, the additional unemployment benefits included in the December bill were worth just $300 per week, half of what the CARES Act provided. The new bill could provide additional funding to increase this amount, or initiate works programmes to help tackle the covid-hit jobs market.

Details about the new bill, which Biden is expected to announce on Thursday 14 January, are yet to be revealed but Biden has promised that the total cost “will be in the trillions of dollars”. Speaking recently Biden confirmed that unemployment benefits and rent forbearance are included, suggesting that he is looking to pass a package that is targeted to address the needs of Americans worst hit by the pandemic.