Nonfilers Need Stimulus Too

The fight to make sure some of the poorest people in the U.S. get direct emergency payments, explained (feat. Chuck Marr of the Center on Budget and Policy Priorities). Subscribe to Off-Kilter on iTunes.

Continuing Off-Kilter’s ongoing series of COVID-19 conversations… The devil is often in the details. That couldn’t be more the case with the current efforts to get emergency aid to families amid COVID-19. In the case of one of the core pieces of the CARES Act which has gotten perhaps the most attention — the direct emergency payments of $1,200 for qualifying individuals and $2,400 for couples — some of the people most in need of the help are currently the folks who’ll fail to benefit altogether. Seniors, people with disabilities, people shut out of the traditional labor market who work odd jobs, people with no income, and other groups less likely to file tax returns are among their ranks.

To help get a handle on the wonky but incredibly important fight to ensure some of the most economically vulnerable people in the U.S. get their stimulus payments, Rebecca sat down with Chuck Marr, director of tax policy at the Center on Budget and Policy Priorities, one of the groups that has been pushing Treasury to ensure as many eligible people receive their intended payments as possible.

This episode’s guest:

• Chuck Marr, director of tax policy, Center on Budget and Policy Priorities (@ChuckCBPP)

For more:

• “Low-income People Must Be Eligible for Stimulus Payments and Actually Receive Them” (CBPP)
• “Why Social Security Beneficiaries Shouldn’t Have to File Tax Returns to Get Stimulus Rebates” (CBPP)
• “Next Step On Stimulus Rebates: Automatic Delivery for People Receiving SSI and Veterans Benefits” (CBPP)
• Here’s the letter from Sen. Sherrod Brown and the entire Democratic caucus calling on Treasury to ensure all recipients of SSI and veterans benefits get stimulus payments without having to file a return
• And here’s Jack Smalligan, a former senior career OMB official who worked on the ’08 stimulus, explaining why there’s zero reason for Treasury to make this so hard for low-income folks (and every reason to learn our lessons from ’08 and get it right this time)

TRANSCRIPT:

REBECCA VALLAS (HOST): Welcome to Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas.

Continuing our ongoing series of conversations about COVID-19 and the hot topics around how Congress and other policymakers are taking steps to get help to the families who are struggling to stay afloat in this time, the devil is often in the details. That couldn’t be more the case with the current efforts to get assistance to families amid COVID-19. In the case of one of the core pieces of the CARES Act, which has gotten perhaps the most attention — the direct emergency payments of $1,200 to individuals and $2,400 to couples — some of the people most in need of the help are currently the folks who will fail to benefit altogether. Seniors, people with disabilities, people shut out of the traditional labor market who work odd jobs, people with no income, and other groups less likely to file tax returns are among their ranks. To help get a handle on this wonky but incredibly important fight, I sat down with Chuck Marr. He’s the director of tax policy at the Center on Budget and Policy Priorities. And CBPP has been one of the groups pushing Treasury to ensure as many eligible people receive their intended payments as possible. Let’s take a listen.

Chuck, thanks so much for taking the time to join the show.

CHUCK MARR: Oh, sure, Rebecca. Glad to be here.

VALLAS: So, before we get into the direct payments side, I would love to have you do just sort of a quick overview of where things stand, which I feel like probably needs to start with what was in the CARES Act. There were a lot of things in there that matter a lot. There was also a lot that was missing. So, give us a little bit of the landscape of where we are at this point in time. We’re talking on Thursday.

Sure. So, with the health crisis, obviously, the virus, the pandemic and now this corresponding freefall in the economy, the CARES Act, it was attempted to try to put a stop, to do some kind of a break on the economic freefall. And it had some really important core pieces. First, was really a major expansion both in reach and size of unemployment benefits. So, we see with the economy shutting down in many sectors — restaurant workers, hotel workers, people who clean offices — so many millions and millions of people who are losing their jobs. So, the unemployment insurance system was bolstered. The amount that people receive was increased dramatically, by $600 a week. So, that’s sort of the instant sort of security measure for people who are, the millions of people who are losing their jobs. Then there was a similar, sort of on the flip side of that, hundreds of billions of dollars provided for small businesses, medium-sized businesses to do what they can to retain their employees, to sort of give them very low-cost loans that may even be forgiven, ultimately, to keep people on their payrolls. So, that was sort of the one-two on sort of employees, employers, and families. Then obviously, the health system is under such tremendous stress, so there’s attempt to shore up the health infrastructure, which is critical. And then the states are right in the middle of the crisis responding to the crisis. So, an attempt to give states money to relieve some of their budget pressures as well. So, that was sort of the overall, sort of the big pieces.

And then again, what we’re going to talk about in more depth here was an attempt to send a significant amount of money to a very, very broad swath of Americans, basically from the lowest-income people, well into the middle class, upper middle class of people to provide some cash to them, which will cushion some of the vulnerabilities that they have. And then also to get some just, pump some money into the economy to try again to provide some kind of a break on this freefall.

VALLAS: So, you mentioned that kind of one of the pieces, one of the signature, core pieces of that CARES Act, and as I mentioned, one of the pieces that has definitely gotten among the most attention from that bill, now law, was this direct emergency payments piece. So, talk us through how the payments piece of the law works, kind of in a nutshell: who’s eligible, who’s not, and the basic structure. There were some really key wins in how this was designed to really maximize eligibility, particularly among groups who otherwise might’ve been shut out based on how some of the design choices were made. Talk us through a little bit of the structure there.

MARR: Sure. Sure. So, the basic structure of it is that people will receive, adults will receive a payment or a rebate of $1,200 per adult and $500 per children. And this will be for people, for couples who make below $150,000, it will begin to phase out, and then for singles, for people below $75,000. And what’s significant about that, that’s a sizable amount of money. And for the first time — these rebates have been done before in previous recessions — but this’ll be the first time ever that there was no earnings test. So, the people really who need the money the most, the lowest-income people in our country, will receive it. So, I think that was a major really, very, very different than what’s been done before.

And what was great to see about that was not only was there a push from Democrats, but there was also a push from Republicans. The initial Republican proposal didn’t do that. It had an earnings test like there was done last time. It had sort of second-class benefits for lower-income people. And you saw an immediate outcry from people like Senator Romney, Senator Hawley, along with most Democrats, objecting to that. And quickly, there was a consensus, really to provide this to all people, all people with the lowest of income. So, no earnings tests. So, the person making, low-wage worker making $10,000 a year will get the same benefit as someone making a $100,000 a year.

VALLAS: So, a lot of really important pieces there, like that full refundability that you mentioned, like the lack of a phase in, there actually was an early version of the plan that had a phase in. It explicitly excluded people who had very, very low earnings or no earnings at all, the people that arguably most in need in this moment. One of the things that has come to light, actually, just in the past few hours, right before you and I started talking — is that kind of setting aside eligibility for the moment, and we’ll come back to that in just a second — IRS is, of course, scrambling to figure out how to get all this money out the door and has now started to make clear that these checks, which Mnuchin was originally promising, were going to start to go out in early April, and it was sounding like it was all going to be very fast, very immediate. Now, we’re learning that many Americans, perhaps as many as 70 million Americans, are going to be waiting as long as five months to get these stimulus checks because the people who don’t have direct deposit on file with the federal government are going to have to wait until IRS can figure out how to mail paper checks out in really large numbers. Now we’re about to see huge delays, and people are really struggling, needing help yesterday, not five months from now.

MARR: Yeah. No question there. There’s obvious urgency for people. And, you know, the law is very direct that the IRS needs to move as rapidly as possible. So, I think what we’ll see is there’ll be a sort of a range as far as speed of delivery. For people who have filed a 2019 return with bank account information right, that’s millions of people, those payments will be delivered fairly quickly, within a few weeks, right. Very similar to just filing a return and getting your refund. Those will be the fastest. And then I think we’ll go down and talk about each of the groups. I think ultimately, the slowest ones are those people who will have to file something and who will not have bank information, and that will take longer and longer. So, I think that realistically, there will be a wait time for some people that is quite some time. I think others will come very quickly.

I think the key is, though, is to really, for the IRS to do this methodically, do it quickly, but also do as much work as they can so people around the country, millions and millions of people who are not in a position and would not be ill served to have to put the burden on them, right? We really want the IRS to do as much as possible on their own, working with other agencies, as opposed to having millions of senior citizens who do not file tax returns, for example, have to file a tax return. And so, we have seen — we’ll talk about — but we have seen some progress there. So, yes, there will be delays, but there have been some signs, at least, of some movement and some of the IRS trying to do the right thing.

VALLAS: Yep, no. And let’s really get into what that kind of big, core issue is that you just alluded to. So, setting eligibility aside, you mentioned that there was just really Herculean work done really on the part of advocates, experts like you guys at the Center on Budget doing a lot of the analysis behind the scenes, as well as members of Congress and Nancy Pelosi and others who are really fighting the good fight out there to make these direct emergency payments as expansive as possible in terms of eligibility. So, Congress was clear and decided to make a lot of folks, like for example, Social Security beneficiaries, SSI beneficiaries, eligible for these payments. But setting the kind of legal eligibility aside, and this is one of the things that you have really been ringing the alarm bells on, a lot of folks who are technically eligible for these payments are now actually at risk of never receiving them. Not just having to wait months like we were just talking about might be the case for some people, but never receiving them at all. And the way that things are shaping up, a lot of it comes down to whether someone has filed a tax return. Explain why that is really at the core of a lot of this, and tell a little bit of the story of what’s happened over the past several days. There’s been a very fluid situation with a lot of kind of changing information coming out of IRS and a few steps in the right direction so far.

MARR: Yeah, no, exactly. And I would just take it back about a decade ago, in 2008, when this was done the last time. The way they did it then was they required everybody to file a return, and it was a disaster for many. So, what happened was a lot of senior citizens who are not required to file tax returns because all their income comes from Social Security — they had no other outside income, so there’s no reason to file an income tax return — they ended up having to file. And what happened was over 3 million of them fell through the cracks and never got the money that they were eligible for. And so, what was heartening to see was the Congress looked at that, and they understood the mistake that was made. So, they specifically, in this new law, right, in the CARES Act, said to the IRS that first, look at 2019 returns. If you don’t have 2019 returns, look at 2018 returns. If for a person, you don’t have either one of those, work with the Social Security Administration and see if those people, if they are on Social Security, their Social Security, get retiree benefits or disability benefits, and use that information to deliver their rebates automatically. And so, that, we felt pretty good about the law, right?

Lawmakers fought, Richard Neal, Chairman Neal of the Ways and Means Committee, fought particularly hard for that. But then a few days later, after the bill was signed, the IRS came out with a intermediate statement saying that senior citizens are going to have to file a return. And it was really quite the surprise, and then they got quite the backlash. I mean, I couldn’t believe. Working at a think tank, the number of emails I just got personally from senior citizens around the country who were just nervous they were and how anxious they were, I can only imagine, you know. And Chairman Neal put out a statement because his office was inundated with such requests and questions from seniors. So, he and many others in Congress brought a lot of pressure on the IRS. And I think it’s to their credit, Secretary of Treasury, the head of the IRS, they rethought that. And they went back, and they reversed the decision. So, they announced now, last night that for people on Social Security, retirees and Social Security Disability, those rebates will be delivered automatically, electronically. So, that was a major step forward, and I think a relief for millions. And as you say, this will avoid having many, many millions of seniors losing out on the money that they’re owed before.

VALLAS: So, a really, really important kind of interim victory, and it feels important to celebrate these moments as they happen. And there is no shortage of immense work going on behind the scenes to bring about these types of victories, which are going to translate into very, very real, tangible benefits for some of the people who are struggling the most in this moment. That takes us then to kind of the next stage of this fight, because that was, as you said, a really, really important step in the right direction. Huge news for really, tens of millions of people. But the fight continues because there remain some pretty significant groups who are still being left out and who were not part of that clarification that was announced on Wednesday of this week.

One major group who they have not spoken about yet — I’m speaking at IRS and Treasury here — is SSI benefits, excuse me, SSI beneficiaries. And your colleague, I want to give a shout out to Kathleen Romig, who does a lot of the work on Social Security and Supplemental Security Income over at the Center on Budget and Policy Priorities. She has put out the number 5.4 million SSI beneficiaries are at risk of not receiving these payments because they do not also receive Social Security benefits. So, of the about 7 million SSI beneficiaries who are adults, either with disabilities or senior citizens, 5.4 million of them have not been covered by this clarification. And IRS has said nothing about those individuals, even though there is zero reason why they should not be treated the same as Social Security beneficiaries.

MARR: No, you’re exactly right. I mean, I think right after that announcement came out, I actually was talking to Kathleen. And we’re talking about, she’s explaining, you have an adult who has Down syndrome, right? You can have an elderly woman who, picture somebody who’s 75 years old and never earned enough to make enough to get to qualify for Social Security and is just scraping by on a very, very small but much-needed SSI benefit. And again, these are people who just do not file tax returns, and as you say, in the millions who are at risk of just falling through the cracks, so really, exactly cannot rest at all on this reversal on Social Security. We’ve got to dive in and really do all we can to push on SSI and retired veterans. And I think, so you’re seeing that. I mean, I give the credit again to Chairman Neal, I think within half hour, 45 minutes of the decision on Social Security, was right back out there with a statement saying, well, what about people on SSI? And I think you’re seeing that, again, members of Congress are busy, and we know a bunch of them are drafting their letters. And I know advocates across in D.C. and nationally are making the push, too.

And I will say again, I’m getting these just random questions from people on SSI who are extremely concerned about it themselves. So, again, can only imagine what members of Congress are hearing. So, we’re hoping, again, that the IRS really signaled that they are deliberately, they’re trying to do the right thing. They’re trying to get to the answer, the correct answer. They did it with Social Security. So, we’re hopeful that they will understand, again, these very low-income people, disabled people, it’s in the middle of a pandemic. We do not want them to have this extra anxiety to have to file something that they just do not do normally, at a time when the law makes clear, gives clear authority for the administration to do it itself. And again, these are people who the government deposits money in their accounts every month. So, the government has all that information.

VALLAS: And I want to note, I haven’t mentioned them yet, and they deserve to be mentioned in this context as well, beneficiaries of veterans benefits have also not been spoken about yet. It’s a different payment system than the Social Security payment system we’ve been talking about that directs funds to Social Security beneficiaries, SSI beneficiaries. But experts have noted that that the Veterans Administration also has the ability to do this. Veterans beneficiaries should not be left out either.

And I actually, I want to quote from an individual, a former senior career official at OMB, the Office of Management and Budget, who you do a lot of work with, I know as well, who’s been speaking out a lot in this moment because of his experience in implementing the 2008 stimulus. His name is Jack Smalligan, and he, in speaking out about the CARES Act and this very question of whether this should be hinging on a tax return for so many people, he called the 2008 requirement for nonfilers to file a tax return, “an unnecessary delay and burden on seniors and veterans who do not have to file tax returns and an added administrative cost for IRS.” He notes that as well, referring to the CARES Act stimulus, he says as follows, “SSA and VA have the administrative records for these individuals, and the law allows these agencies to share that information with the IRS.” So, sort of a no-brainer. As he says, we should leverage existing federal administrative data rather than imposing new burdens on families. This is something that you are pointing out as well the government can do, does not need to shift the burden over to individuals in ways that we know will just diminish take-up and make it harder for people to get the help.

Chuck, one group that we’ve not talked about at all is folks who receive Supplemental Nutrition Assistance benefits, SNAP benefits, formerly known as food stamps. There’s actually a lot of overlap with some of the groups we’re talking about, whether that’s low-income seniors or people with disabilities or low-income families generally. But a lot of folks who’ve been trying to find workarounds for the current problem and who’ve been also looking at where does the government have information that it might be able to leverage creatively in this kind of a moment to get money to as many people as possible, have been pointing to SNAP. What does SNAP offer in terms of a potential avenue for getting money to people in this time of need?

MARR: You know, that’s a great question. And we tried very hard to get the state EBT systems to be part of this and thus far have failed, but are going to keep pushing. So, I think, yeah, very important and maybe that this could lead into, we’ll talk later about the next bill. But just like the federal government has some excellent information on certain people, the states have excellent information on some different people, right? Because the states have systems to deliver food benefits to SNAP recipients and to Medicaid. And much of that is done through EBT cards as well as bank accounts. So, they have, and again, this is done monthly. And so, this is a population that heavily are made of people who are outside of the tax system. So, you can have, it’s basically adding on capacity to the federal government.

So, what we would like to see is the federal government share with the states the checks, the rebates that have been made to people in their states so the states can data match that, right, which they do with the feds all the time and figure out which people in their states that get those benefits have not received their rebate, so they can reach out and help with the outreach effort to make sure that those people that get those benefits, get these rebates that they’re eligible for.

VALLAS: So, another option as well and that hopefully folks are starting to listen to and to take seriously. There’ve been a ton of people reaching out on Twitter, on email. You know, I’ve been inundated by emails as well, all with the same question. You’re probably seeing the same thing in a lot of the emails you’re receiving. And that’s, “What can I do in this moment to pressure whoever the right combination of people are to change their minds, to issue these clarifications, to make the right choices here, to maximize the number of people who get these payments?” And in particular, some of the groups that are sort of low-hanging fruit from the standpoint of where the data is already available and just ready to be used. What can people be doing in this moment? Is it pressuring the Treasury Department? Is it calling their members of Congress? What should folks be doing while they’re maybe at home, maybe in some kind of an uncertain situation, potentially with more time on their hands and looking to engage on this issue?

MARR: Yeah. I think the Treasury would help. But I do think that you do have these members of Congress, some key ones who are very energized on this and are really in overdrive trying to serve their constituents. And I think we’ve seen that, again, Chairman Neal has been so active. You have Sherrod Brown on the Senate side, Democrat from Ohio, has been working this very aggressively. Senator Hawley, Republican from Missouri has been very active, pushing the administration. So, I would really encourage people to get in touch with their senators, their member of Congress, because there’s no question that the administration is listening to these people. They are having an effect. We just saw that with the Social Security decision where very quickly, the administration received the backlash, and they reversed themselves.

So, I think for people on SSI, someone, we really need to fight for those folks. And I think, again, the IRS will try to do the right thing. But it always helps to just give a very less than subtle push, just emphasizing how important it is and how we just do not want to make vulnerable people have to take on more burden, more anxiety to do something that would be very difficult for them, which the government, it’d be much easier for the government to do.

VALLAS: And I want to put a plug out there for folks who maybe are SSI beneficiaries who are listening, who are wondering what’s going on with their benefits. Want to put a resource out there that is incredibly useful in this particular moment, especially given that things are so constantly shifting. And that’s #COVIDChat, c-o-v-i-d c-h-a-t on Twitter. It’s hosted by Matt Cortland, a friend of the show. He’s been doing daily updates for folks about what’s going on in the disability space. And he himself is an SSI beneficiary who fights for other SSI beneficiaries in moments like this. So, COVIDChat, a great place to stay up to speed and to figure out how you can engage in this fight as well.

So, Chuck, in the last few minutes that we have, there’s been a lot of talk about there being a fourth package. So far, we’ve seen three COVID relief packages, sort of a small down payment, then the Families First package, then the CARES Act. Now there is talk of a fourth package, although it’s unclear when that’s going to happen, given the lack of urgency that we’ve been seeing from Mitch McConnell and some sort of noises coming out of the White House at various points saying we’ve done all the spending, no more spending. So, setting those complications aside and just taking on faith that we are going to have some kind of fourth package, what needs to be in it, and especially kind of thinking about this direct payments side of things, we haven’t talked about them yet, but immigrants are nowhere to be found in benefiting. And I should say undocumented immigrants in particular, but whole different groups and categories of immigrants are nowhere to be found in benefiting from whole components of this legislation so far. You’ve been thinking a lot about that as well as some of the tax code components of what might come next too.

MARR: Yes, exactly. I think that the hole, in these stimulus rebates, the most glaring, the largest hole that really needs to be filled with the next round, particularly if Speaker Pelosi — if the House Democrats have to pen it first, I think we’re in a better position — are the immigrants. You have people who file their taxes every year. They file them with ITINs, identification numbers, not Social Security numbers. But many of these families have citizen children with Social Security numbers, right? And if you just think about the time we’re in, right, people are in this altogether disproportionate share of this immigrant community are providing food, delivering food, caring for elderly. I mean, we rely on people at all times, but now it’s just so clear how much we rely on them. And I just think it’s just so sad to see, and disappointed that they get left out of this. And I think it’s so urgent. You know, one of the most important things in the next round is to fill that hole and include them in this, I think. So, that would be a top priority.

Then, I think as far as the payments, as you talked about, we really would like to make sure delivery is as good as it can be next time. So, really working, get in there to get authority to work with the states, right? Make sure that automatic delivery for SSI, and again, for Social Security. So, fix the delivery issues next time. And then I think a little more broadly within the tax area, I think hopefully, we’ll see in the bill that did not get acted on, Speaker Pelosi had some excellent provisions to do two very important things. One, the group there really is at risk of falling through the cracks here are people, on the payments, are low-income people, low-wage workers who are not raising children. And the reason that they’ll fall through the cracks, at risk of that, is that they receive such a small EITC, Earned Income Tax Credit, which subsidizes their wages, that they have no reason to file a tax return. That’s kind of why they’re outside of the system. So, Speaker Pelosi would do sort of short-term and a long-term thing by providing them with a robust EITC, both to enhance their wages and let them respond to the crisis at the moment, but also pull them into the system.

And second, you have 26 million children, right, who are left out of the Child Tax Credit. And I think we’ve seen in this rebate context, finally bipartisan agreement, that really to bring in the lowest-income people who need the funds the most — and I hope that that translates in similar on the Child Tax Credit — to realize that the kids who would benefit the most are those low-income, the poorest kids in the country. And there are millions of them. And I think you’re also starting to see, and I think this leads to sort of broader discussion, just point on the next package, that with the economy in freefall, forecasters are just trying to catch up to how much downward pressure there is. And you’re starting to see them recognize that even with a powerful snapback later in the year, that the unemployment rate is going to be elevated for very long time, for quite some time. So, if one were to increase EITC this year and the Child Tax Credit this year, that money would arrive next year, next winter, when the economy is still going to be very weak, and stimulus is still going to be needed. So, I think that would be timely, and I think there’s a strong reason to do that.

And I think more broadly for the next package, there has to be thought given to how the economy is going to stay weak for quite some time, right? And you really want to make sure that things like unemployment insurance, additional SNAP benefits, fiscal relief for states, that those are kept in place until the economy reaches a certain point of recovery, right? That that can almost, that those can be automatic, right, so people will know if they lose their job that the unemployment insurance system will be there in the boosted form that it is under the CARES Act.

VALLAS: Chuck, in the last 30 seconds or so that we have, any final thoughts for our listeners? Any final takeaways on what they should be watching in the next several days?

MARR: I think events are happening very quickly. It’s very fluid on the delivery of the rebates. So, I think people should periodically check in with the IRS website to get the latest. And between now and when they finalize, we’re going to be doing our best to make sure that people are going to receive their rebate payments in as easy a form as possible, hopefully electronically. And I know Rebecca will be doing the same.

VALLAS: And I’ve been speaking with Chuck Marr. He’s the director of tax policy at the Center on Budget and Policy Priorities. You can follow him on Twitter, @ChuckCBPP, where he’ll be tweeting, I’m sure, regular updates about what’s going on with the fight to make sure that as many of the people who need these direct payments actually get them, and don’t have to file forms in order to do so. Chuck, really appreciate you coming on the show. And thanks again for all your work on this.

MARR: Thank you.

VALLAS: And that does it for this episode of Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas. The show is produced by Will Urquhart and Allison Young. Transcripts are courtesy of Cheryl Green. Find us on the airwaves on the We Act Radio Network and the Progressive Voices Network, and say hi and send us your show pitches on Twitter @OffKilterShow. And of course, find us anytime on iTunes or wherever you get your podcasts. See you next time.