Tracking Plans to Make Pandemic Benefit Expansions Permanent

In 2008, former White House Chief of Staff and Chicago Mayor Rahm Emanuel famously said what has come to be known as Rahm’s rule: “You never want a serious crisis to go to waste. And what I mean by that [is] it’s an opportunity to do things that you think you could not do before.” It’s clear that this principle informed many of the unprecedented policy responses to the coronavirus crisis.  

Democrats continue to take Rahm’s rule to heart long after the health crisis has ended, reflected in multiple plans to permanently revive and extend pandemic benefit expansions. How far-reaching is that effort? Consider just the following statements from a White House fact sheet about President Biden’s most recent budget proposal, which specifically calls for the revival or expansion of major benefit increases legislated during the pandemic:

• “The President is calling for the restoration of the full Child Tax Credit enacted in the American Rescue Plan…”
• “The President also calls on the Congress to make the Earned Income Tax Credit expansion for childless workers permanent…”
• The Budget proposes “making permanent the average $800 per year premium cuts through expanded premium tax credits that the Inflation Reduction Act extended.”
• “The Budget provides $4.1 billion for the Low Income Home Energy Assistance Program (LIHEAP), building on the $13 billion provided in the Inflation Reduction Act…” 

The fact sheet also suggests the president’s budget would build on other pandemic benefit expansions, including by providing increased funding for childcare, housing, public education, college, green energy, a new national paid leave program, and much more.

The following selections from AEI-authored op-eds and blog posts review more details about these efforts to extend pandemic benefit expansions—and thereby ensure the pandemic continues to stoke income redistribution well after the crisis is only a memory.

Unemployment Benefits

• Goal: Extend pandemic unemployment expansions indefinitely.
  • The American Worker Holiday Relief Act also proposed extending all other federal pandemic unemployment benefits….as long as state unemployment rates remained high—that is, indefinitely. (“Pandemic Unemployment Benefits, Indefinitely?“)
• Goal: Create a permanent unemployment program for nonworkers, modeled after the Pandemic Unemployment Assistance program.
  • New jobseeker allowances would effectively make the current temporary Pandemic Unemployment Assistance (PUA) program permanent….Wyden’s jobseeker allowances would start at $250 per week, could last up to 91 weeks depending on unemployment conditions, and would be payable to all unemployed individuals over age 19—including those who’ve never worked before. (“Government ‘Allowances’ Are the New Welfare“)

Child Tax Credit (CTC)

• Goal: Revive the 2021 pandemic CTC expansion.
  • The president is once again “calling for the restoration of the full Child Tax Credit enacted in the American Rescue Plan,” while now proposing that most of that “full” restoration lasts only through 2025….That means the staggering apparent cost of this policy ($429 billion over 10 years) ignores more spending that it includes, given supporters’ stated desire to make the policy permanent…(“The Trillion-Dollar Hole in the President’s Budget“)
• Goal: Permanently end the work requirement for claiming the CTC.
  • But under the proposed expansion, no such work requirement would apply for those collecting CTC checks in the years ahead. Indeed, under this proposal the same $2,000 per child payments would be made to all parents whether they don’t work at all, work only part time, or work full time or more. (“The Coming Push to Revive Work-Free Child Tax Credits“)

Earned Income Tax Credit (EITC)

• Goal: Permanently remove the annual earnings requirement for claiming the EITC.
  • Under the ironically titled Working Families Tax Relief Act, introduced in June by Sen. Sherrod Brown (D-OH) and other senior Democratic senators, the mask was removed and the lookback policy would be made permanent. That is, if an individual’s current year earnings are below their earnings in the prior year, they could use the prior year’s earnings when applying for the EITC—permanently. (“Another Pandemic Legacy: Removing the EITC’s Work and Earnings Requirement“)

Medicaid and CHIP

• Goal: Extend eligibility expansions even after the public health emergency (PHE) has ended.
  • In effect, the federal government wants to require the states to permanently increase the size of their Medicaid and CHIP programs without offering a pathway for possible offsetting cost savings. (“CMS’s Post-PHE Plan for Medicaid and CHIP“)

Food Stamps/SNAP

• Goal: Permanently increase food stamps, as in the pandemic.
  • However, in October 2021, President Biden’s administration used a routine administrative action—reevaluating the Thrifty Food Plan—to increase SNAP benefits by an average of 23 percent without congressional input. The effort was clearly a way to offset the expiration of the pandemic-related increase…(“How SNAP Expenditures Now Exceed $100 Billion Annually“)

Reprinted with Permission from AEI.org – By Matt Weidinger