Help is on the way – or here, in some cases

Bill Knight column for 3-18, 19 or 20, 2021

 People benefiting from the American Rescue Plan range from recipients of $1,400 payment to everyday taxpayers whose local government need help.

Already, the first wave of payments has arrived in some direct-deposit accounts, an impressive speed considering the scale of the job and the fact that those deposits came the day after President Biden signed the $1.9 trillion measure.

Coming are mailed checks or prepaid Economic Impact Payment (EIP) Visa cards to qualified individuals: Those with annual adjusted gross incomes of $75,000 or less (based on their most recent tax returns) will receive $1,400 (plus $1,400 for each eligible dependent); people earning more than $75,000 will receive less, and individuals earning $80,000 or higher are ineligible.

The American Rescue Plan (ARP), the third stimulus package tied to COVID-19 in the last year, is intended to not just help households with immediate needs, but to spark a “multiplier effect” that has recipients’ purchases spur spending by grocery stores, service stations, banks, utilities, landlords, suppliers, etc. – lifting the whole consumer economy.

ARP provides for more than $130 billion for local governments, too, according to the Center for Rural Strategies, and unlike the CARES Act, small local governments will get help from the new effort, too. The CARES Act provided direct help only to cities with populations of more than 500,000 (some 150 municipalities). Some states separately assisted others but rural areas and small towns were virtually ignored by previous pandemic-relief aid.  Now, more than $65 billion will be distributed to U.S. counties, with $8.9 billion heading to rural counties, $54.7 billion to metropolitan counties, and rest to territories and tribal lands.

It will help area and local government, whose employees have lost jobs as well as restaurant workers and many others.

“Rural communities tend to get overlooked when we’re talking about federal government relief,” said Zoe Willingham, a Center for American Progress associate who researches rural issues. “Costs are rising for everyone.”

That includes local governments.

Property taxes – which are set locally and remain relatively stable in the short-term of economic upheaval – have been less affected than the loss of sales taxes, collected from less retail spending at bars, theaters, video-game parlors, hotels and much more.

As efficient and promising as ARP is in its first week, challenges remain, as shown in the two aid packages from 2020.

Problems arose with the $1,200 and the $600 payments last year, when the help didn’t get to the neediest fast, or they didn’t arrive at all to millions of Americans.

Delayed deliveries also stemmed from the U.S. Postal Service coping with Postmaster General Louis DeJoy hamstringing the system and also some letters with the EIP cards mistakenly discarded as junk mail.

Other causes included confusion on eligibility, people without bank accounts, creditors garnishing a chunk of the payments, or the Internal Revenue Service (IRS) missing people claimed as dependents.

Reuters reports there are almost 90 million people with bank accounts and/or direct-deposit capabilities, but 150 million without them or recorded addresses, plus 7 million who don’t file taxes for whatever reason, and 1.5 million houseless citizens. They must be found and helped, too.

Lastly, a potential problem is tied to the lingering assumption that most Americans have computers, internet access and cell phones – which also bedevils the ease of registering for COVID-19 vaccinations.

Presently, for those who can access the internet at libraries, etc., the IRA has online help, including https://www.irs.gov/coronavirus/get-my-payment and https://www.irs.gov/newsroom/coronavirus-and-economic-impact-payments-frequently-asked-questions.