Stimulus check proposal: what support is there for the idea of $1,200 monthly checks?

Minnesota Congresswoman Ilhan Omar is once again raising awareness of her proposal to send monthly checks of $1,200 checks to adults and an additional $600 to families with children. The SUPPORT Act, if passed, would mandate that these payments be made for at least five years.

In an op-ed published in the Star Tribute, an outlet in the Congresswoman’s home state, Rep. Omar expressed her support for the actions taken by Governor Tim Walz to reduce child poverty and spoke to what must be done at the federal level.

One of the proposals the governor has made centers on providing a child tax credit to families in the state, modeled after the enhanced credit passed under the American Resuce Plan (ARP). Under the ARP, the child tax credit increased in value from $2,000 to $3,000 for each child between six and seventeen and $3,600 for each under six. Also, instead of claiming the credit on one’s tax return, the IRS sent monthly payments from July to December 2021 and allowed the remaining value to be claimed when filing in 2022.

The changes to the child tax credit led the child poverty rate in the United States to fall by half. The fact that the enhanced credit made such deep cuts into the number of children living in poverty is evidence of the millions of families who earn just under what would be necessary to acquire the goods and services needed to fulfill their basic needs. Researchers at the Columbia University Center on Poverty and Social Policy found that the payments made during these six months of 2021 managed to keep 3.7 million children from falling into poverty.

What is the SUPPORT Act?

The SUPPORT Act was first introduced to the House of Representatives in the last Congress when Democrats held control of the chamber. No co-sponsors are listed on the bill.

What else does the legislation provide?

Not only does the law mandate that the checks be sent, but it would allow making serious changes to the public services offered by the Federal Reserve. Rep. Omar’s proposal mandates that “Federal Reserve member banks to provide bank accounts (FedAccounts) to residents and to businesses domiciled in the United States for purposes of holding digital dollar balances. These accounts would be required to offer “specified banking services, including debit cards, online banking, automatic bill pay, and automatic teller machines at U.S. postal facilities.” In 2021, just over eighty percent of households were fully banked, meaning that they had access to a bank account and did not need to rely on money orders, payday lenders, pawnshops, or other types of institutions “that are disproportionately used by unbanked households to meet their transaction and credit needs.”

Rep. Omar’s plan could increase the financial resiliency of households by offering all households a public option to store their money and, ideally, access to credit to reduce dependency on predatory lending institutions.