The proposed stimulus package unveiled by Senate Republicans on Monday, known as the HEALS Act, could end up being disadvantageous to lower-income families, particularly in regards to revised unemployment benefits. Martha Gimbel, manager of economic research at Schmidt Futures, broke down why in an interview with Yahoo!.
"The $600 a week disproportionately benefits poor people, and that is really a feature, not a bug," Gimbel said, referring to the new plan, which would take those weekly benefits down to $200. "It was originally a bug, but it's turned into a feature where poor people are just more likely to spend." It's also only the first part of the GOP's ultimate plan, which will take roughly five weeks to implement (assuming it passes). The second part involves a 70 percent wage replacement, which will also disproportionately impact those with lower income. Eventually, anyway, as it's expected to take anywhere from eight to 20 weeks to get that up and running.
"I see very little argument to pull consumer spending out of the economy at this time, which is what cutting unemployment insurance benefits would be," Gimbel continued. "The United States is a consumer-driven economy, and if consumers cannot spend, we are in a lot of trouble." There's also the matter of the most recent enhanced unemployment, which came as part of the CARES Act, recently expired. "We're already at the point where people will likely see delays in distribution of benefits. That deadline was this past weekend and we blew past it."
There are other possible issues with the HEALS Act that are currently being debated. In addition to troubling unemployment aid, the proposal will exclude roughly 2 million people due to being part of a mixed-status family. Republican Sen. Marco Rubio had previously spearheaded the call among his colleagues to include undocumented immigrants in future stimulus programs, which has had very little impact, at least so far.
The bill also included $1.75 billion for the construction of a new FBI headquarters in Washington, D.C. When asked about this particular aspect of the HEALS Act, Senate Majority Leader Mitch McConnell claimed that he was unaware of it being included. Although after being asked about it again, he told reporters to ask the Trump administration "why they insisted that be included," adding that the GOP "had to have an agreement with the administration in order to get started."