What might an out-of-work millionaire, socially isolated in a spacious mansion, buy with an extra $600 of spending money every week?
Thanks to Congress, the lifestyles of many millionaires who find themselves between paychecks are being subsidized out of the wallets of essential employees who continue to show up for work.
The $2 trillion CARES Act, which was passed to provide economic relief, created a new benefits program called Federal Pandemic Unemployment Compensation (FPUC). FPUC provided an extra $600 per week in unemployment insurance payments to people who lost their jobs or were laid off due to coronavirus. The problem? Lawmakers failed to put any eligibility requirements on these new benefits — so even millionaires qualify.
As a result, those who lost a job but have other revenue streams, even in excess of $1 million, will still receive this additional $600.
Middle America might be stocking up on Clorox wipes and toilet paper, but for the millionaire class, an extra $600 a week would stock an entire freezer full of gourmet ice cream.
There is no way to know how many millionaires will end up getting the extra $600 benefit. But in 2017 and 2010, 2,500 and 3,100 millionaires claimed unemployment insurance, respectively. Some earned as much as $10 million the same year they were on the rolls of the unemployed.
While traditional unemployment insurance is not means-tested due to longstanding regulations, there is no reason emergency benefits shouldn’t be. Especially now.
Today Sen. Joni Ernst, R-Iowa, introduced the RICH Act, which would prohibit people making $1 million or more this year from collecting the expanded unemployment benefits.
The initial problem is illustrative of a larger point. “We’re in this together.” Who is we? Politicians and millionaires? How nice for you.
House Speaker Nancy Pelosi held up pandemic aid not once but twice. She delayed the initial passage of the CARES Act. Then for two weeks, she refused to replenish the paycheck protection program, a program specifically designed to help small businesses — and she did it while eating ice cream and laughing with James Corden.
Meanwhile, the lines at food banks are miles long.
Last week, the House passed the HEROES Act, which included a repeal of the $10,000 cap on the State and Local Tax deduction for two years. You don’t need to know anything about the tax cap deduction, but you should know this: It benefits wealthy citizens of high-tax states. Almost half the benefits will go to the top 5 percent of income earners. Up to 80 percent of the benefits go to the top 20 percent of income earners.
Of course, it’s not all on Pelosi. But when the people who are bearing the brunt of the pandemic look at D.C. and see politicians running interference for Wall Street and millionaires, “unity” isn’t the feeling that swells within them. When their tax dollars are used to bail out the airlines, fair or not, that baggage fee just hits a little bit differently.