Hawaii residents will soon be receiving checks in the mail as part of the $2 trillion Coronavirus Aid, Relief and Economic Security Act that passed late last week.
While popularly characterized as “stimulus checks,” the money being sent out as an offset against the outbreak of COVID-19 is not free money but, in the exact wording of the bill, an advance “recovery rebate” of up to “$1,200 ($2,400 in the case of eligible individuals filing a joint return), plus … an amount equal to the product of $500 multiplied by the number of qualifying children … of the taxpayer.”
The rebates, as visualized on this chart by the Tax Foundation, begin to phase out by $50 for every $1,000 earned over the cap of $75,000 for singles and $150,000 for joint taxpayers with no children.
In sum, the CARES Act’s provisions that would stabilize the economy by sending checks directly to hard-hit families is really not a gift from Uncle Sam, but rather, an opportunity to keep more of one’s money already earned. Courtesy of Congress, the American people are basically taking a monetary blood transfusion from their left arm and injecting it into their right arm.
Understandably, members of Congress like Democratic presidential candidate and Vermont Sen. Bernie Sanders were frustrated over how the CARES Act does not do enough to help low-income workers, while billions of dollars will be injected into saving large corporations.
One doesn’t have to be a progressive or democratic socialist to see the inequality at work in the coronavirus relief; taxpayers will be paying for both their “stimulus” checks and the bailouts of corporate America. As it is, earlier in the month, the Federal Reserve began lending as much as $1 trillion per day to prevent a liquidity crunch.
As if to add insult to injury, Hawaii’s high cost of living undermines the checks locals will be receiving as coronavirus assistance. In the mainland, an individual who made $75,000 in the previous tax years would probably be considered well-off, and receiving a rebate of $1,200 might be helpful, but not essential to their survival.
But when the local cost of living for Hawaii is calculated, that same individual is essentially living on the fringes of poverty. For context, a single person in Hawaii making $67,500 is already considered “low income.”
Though both Congress and President Trump clearly wanted to pass some kind of major legislation to boost consumer optimism and save tanking markets, the CARES Act’s attempts to help taxpayers with direct payments is at best superficial. For one, Hawaii legislators, along with other coastal representatives, should have pushed for the CARES Act to give more money to people living in locations with higher costs of living.
In Honolulu, there’s really not much you can do with $1,200 in self-quarantine. That might cover an extra rent payment, possibly allow for extra groceries, or even allow you to shave a little off your maxed-out credit card bills, but for someone who has been laid off as a result of coronavirus, $1,200 in Hawaii is manini.
This brings us to the real problem with the CARES Act. If you lost your job because of COVID-19, your income is zero, so why should it even matter how much money you made in previous tax years? Shouldn’t people just get a no-strings-attached cash injection from the government because this crisis is going to hurt everyone?
In places like Hawaii, residents are being told to stay home at no fault of their own under force of law because of a virus threatening public safety. If the government tells you to stay home, it is the government’s responsibility to provide and take care of you while you are obeying their orders.
Besides, we still don’t know if Hawaii residents who get infected with and survive COVID-19 will have additional large medical expenses related to their rehabilitation. They are going to need help, over and above the subsidies Congress is giving to healthcare organizations.
Our Hawaii delegation needs to champion the case for getting more money in the hands of local families.
This crisis is no fault of the public, and they should receive some kind of compensation for both the government’s failure to protect them against COVID-19 and the effects of inflation from the government’s assistance to Wall Street.
Let’s make this really work. There was a time when our leaders inspired the public and lived by a creed that “the United States of America will neither forget nor forsake you, and that it will win the ultimate victory.”
I still choose to believe that this country should not forsake its sick or vulnerable. And I still choose to believe that with the right policies, we will win the ultimate victory over COVID-19.
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Danny de Gracia is a resident of Waipahu, a political scientist and an ordained minister. Opinions are the author's own and do not necessarily reflect Civil Beat's views. You can reach him by email at firstname.lastname@example.org or follow him on Twitter at @ddg2cb.