U.S. prepares to send relief checks, but big stimulus challenges loom

Congress is set to give the final green light to a $1.9 trillion coronavirus stimulus package Wednesday, setting in motion a Washington, D.C.-wide effort to administer one of the largest economic relief packages in U.S. history.

Over the coming weeks, the Biden administration is set to send another round of one-time checks to millions of families, rethink vast portions of the U.S. tax code and dole out sums to help cash-strapped Americans, seeking to swiftly blunt an economic crisis that has left millions without jobs and falling further behind financially.

Biden and his aides have promised that a large number of Americans could receive their $1,400 stimulus payments before the end of March. But some of the other ambitious elements of the soon-to-be law—including new child tax support, aid to local governments and money to help families pay rent—could take much longer to disburse. The sheer volume of new programs threatens to swamp federal agencies, including the Internal Revenue Service, leaving some lawmakers fearful about early delays.

Congressional aid packages that became law over the past year have proved instrumental in helping the country rebound from one of the worst economic crises since the Great Depression. But the federal bureaucracy at times has strained to deliver some of that support in a tight time frame. Few Americans have benefited so far from the $25 billion in rental and utility assistance that lawmakers approved in December, housing experts said, and other programs to help workers and businesses pay their bills have not yet fully come online.

“Implementation is the ballgame. You can have the best priorities in the world, whether it’s the well-being of children [or] the needs of those who have been laid off of no fault of their own,” said Sen. Ron Wyden, D-Ore., the chairman of the Senate Finance Committee. “It doesn’t mean a whole lot if you can’t get the benefits out so people can make ends meet.”

The White House did not respond to a request for comment.

The challenges ahead reflect the high stakes facing Biden as he prepares to sign his first major legislative accomplishment into law this week. The president’s economic agenda and political legacy—and the trajectory of the country’s recovery from the pandemic—will depend on the ability of the federal government to get the next few months right.

Dubbed the American Rescue Plan, the $1.9 trillion package marks the sixth major stimulus adopted by Congress since the coronavirus arrived in the United States last year. Democrats this week have hailed it as the largest anti-poverty measure in a generation, and top White House officials in recent days have fanned out to tout its potential—and the party’s early efforts to meet its 2020 campaign promises to deliver economic relief.

The president on Tuesday toured a local hardware store that had benefited from a loan under a prior stimulus initiative, the nearly $1 trillion Paycheck Protection Program, adopted last year. Bharat Ramamurti, the deputy director of the National Economic Council, later said at a White House briefing that the administration’s efforts alone had helped almost 200,000 first-time borrowers obtain loans. He said the new stimulus would serve as a “big step” toward recovering some of the roughly 10 million jobs still lost as a result of the pandemic.

“We promised to send people back to work by helping to revive and supercharge the economy—mission accomplished,” said Rep. Hakeem Jeffries, D-N.Y., heralding the stimulus on Capitol Hill for delivering on commitments made to voters last year to provide swift, robust relief. “We promised to help small businesses—mission accomplished.”

Republicans criticized the bill, days after every GOP senator voted against the measure this weekend. Many noted that significant sums from past stimulus measures remain unspent, making the new injection of federal aid set to be authorized by the House on Wednesday morning unnecessary in their eyes.

“We can’t just keep borrowing money; that’s why we wanted a narrower approach to covid relief, including using the existing hundreds of billions of dollars that haven’t been spent before you go borrow money that do things that have nothing to do with covid,” said Rep. Steve Scalise, R-La., the House minority whip.

But the extent of the help—and the speed at which it reaches Americans—may depend on the critical months ahead.

Some of the most ambitious new programs hinge on the IRS, an agency tasked under the stimulus law with vast responsibilities to disburse payments to millions of Americans and process significant changes to the tax code. The IRS has grown familiar with the one-time payments, having dispatched two rounds of such aid since the pandemic began, and White House press secretary Jen Psaki said Tuesday that the agency is working “tirelessly to make that happen.” But the agency for the first time will begin distributing regular support to families with children as part of a massive change in the way the government assists families in need.

The IRS would need to craft rules for new advance payments of the expanded child tax credits; stand up a system to pay them out, perhaps on a monthly basis; and process other changes under the rescue plan, including fresh help to unemployed Americans. The sheer volume of work that would need to be done—all while managing tax filing season this spring—has led even staunch supporters of the stimulus to raise early red flags about its implementation.

“I think struggle is inevitable,” said Rep. Gerald Connolly, D-Va., who chairs a key House committee overseeing government operations, when asked about the IRS.

Connolly cited years of budget cuts under Republicans—and outdated computer systems at the IRS—as potential threats to the agency’s ability to administer the new stimulus programs. The $1.9 trillion package includes money to help the IRS fix some of these deficiencies.

“It’s a very critical public policy program to be implemented,” he said. “But I think they’re going to be struggling with it, not because of intrinsic flaws of the IRS but because we’re paying a price for the disinvestment in the IRS over the past decade.”

The IRS did not respond to a request for comment.

Wyden said he hopes to see tax aid made available “this summer,” pledging close oversight of the agency—and others implementing the stimulus—in the months ahead.

“We’re going to be watchdogging this every single step of the way,” he said.

For those still out of work, meanwhile, the relief package authorizes another round of $300 in additional weekly benefits, a major boon to millions who would have lost those checks without congressional action by March 14.

But the extension may take time for states to implement, once again resulting in potential disruptions to jobless aid. The delays may feel familiar to Americans who repeatedly have been left without checks because of technical glitches—and congressional quarreling—dating back to the beginning of the pandemic.

“We expect there will be some lapse in benefits for probably a matter of weeks before payments start going out the door again to those who will exhaust their benefits this week,” said Julia Simon-Mishel, a top lawyer at Philadelphia Legal Assistance.

Lawmakers also allowed some recipients of weekly jobless aid to obtain new relief on their taxes. Yet the Biden administration ultimately must decide how to implement the change in the midst of tax season, possibly creating headaches for jobless Americans who filed their 2020 returns before the stimulus bill passed.

Other funds may prove easier to disburse, building on coronavirus relief programs approved last year. The package includes $5 billion in new pandemic food benefits, for example, which augments aid Congress passed in 2020 to help people struggling to eat. Another tranche of support, $30 billion to help renters catch up on their past-due housing costs, roughly doubles the size of a fund lawmakers approved as part of a smaller stimulus package in December.

Andrew Olmem, who served as deputy director of the White House National Economic Council under President Donald Trump, said the approach could make implementation of some of the new stimulus “easier than for the prior bills,” including the $2 trillion Cares Act adopted at the height of the crisis last March.

“But the bill’s new funding programs will take time to set up as the personnel, financial, legal and organizational requirements for establishing a new program need to be completed,” Olmem added. “Every new program invariably runs into unexpected obstacles and challenges.”

With rental relief, for example, the U.S. government started working to deliver the money to cash-strapped tenants and landlords after lawmakers voted last year. But confusing government rules, a paucity of local infrastructure to disburse the money and a changeover from the Trump to the Biden administration meant that most of the $25 billion in aid has not helped families in need, roughly three months after Trump signed it into law.

“Very little of the $25 billion has reached low-income renters and landlords yet,” said Diane Yentel, president of the National Low Income Housing Coalition. She predicted that recent changes under Biden—and the new aid approved by Congress this week—will help speed money to renters in great need. “I expect the numbers to increase significantly in the coming days and weeks.”

A slew of other efforts to help struggling businesses similarly have been trapped in the federal bureaucracy. In December, for example, Congress approved $15 billion in emergency assistance for independent entertainment venues affected by the pandemic. Initially dubbed the Save Our Stages Act, the initiative enabled the Small Business Administration to issue grants as a financial life raft for concert and theater venues that have had little to no business for almost an entire year.

But Audrey Fix Schaefer, a board member of the National Independent Venue Association, said none of the $15 billion has been disbursed. The SBA has not even issued grant applications, Schaefer said, leaving businesses unaware of when they might see a check. Many of those businesses passed on the Paycheck Protection Program, hoping they would be able to get more money from this entertainment-specific aid.

“We imagine that isn’t easy to administer, but we were always hoping the money would start to flow by the middle of February,” Schaefer said.

The new stimulus would task the SBA with another round of responsibilities, including the administration of a $25 billion-plus fund for restaurants that have seen precipitous drops in dining because of coronavirus restrictions. The restaurant fund is similar to the one set aside for theaters, leading Sean Kennedy, the executive vice president for public affairs for the National Restaurant Association, to say this week that it will probably be “months and not weeks” before the money starts to flow.

The Biden administration also faces particularly steep challenges in the disbursal of approximately $350 billion in new stimulus aid for states, cities, tribes and territories. At the core are logistical questions about how and when that money gets sent, as Washington manages tens of billions in grants to local governments for other programs, such as education and vaccine deployment, all of which must be sorted quickly.

“It’s just a logistical nightmare,” said Bill Hoagland, a senior vice president at the Bipartisan Policy Center and former Republican staff director for the Senate Budget Committee. “It becomes a real management problem and management issue.”