This report was written by Andrew Perez
For a moment, it looked like the Democratic Party’s Wall Street-boosting think tanks might stop hawking austerity during the historic, deadly COVID-19 pandemic.
“Clearly, there’s a need,” Jim Kessler, an executive vice president at Third Way, told the Washington Post last month in response to President Joe Biden’s first coronavirus relief proposal.
“The new unemployment numbers are shocking,” Kessler said. “State and local aid has to be part of it. There will be additional stimulus checks. And you have to make sure unemployment benefits continue as well.”
Kessler’s remarks came as a shock to our team at The Daily Poster. We simply never thought we would see Third Way — one of the Beltway’s most reliable purveyors of let-them-eat-cake-ism — making the case for deficit spending, even when people are desperate and dying.
Unfortunately, everything has now gone back to normal: Third Way is boosting a campaign by billionaire-funded economists and millionaire TV pundits to deny $1,400 COVID survival checks to tens of millions of middle-class Americans. Meanwhile, its well-heeled executives are helping Republicans undermine the push to raise the minimum wage to $15.
A few years ago, Third Way admitted that most of its funding comes from finance industry donors. Its corporate donors include PepsiCo, Facebook, and chemical giant Dow, according to company filings.
Building The Case For Rationing Survival Checks
In late January, Third Way’s Kessler gave a ringing endorsement of a shoddy study by Opportunity Insights, a Harvard University think tank, that has been used to try to build the case for limiting direct payments to middle-class families.
Opportunity Insights is funded by billionaire foundations, including one that has been a generous donor to Third Way — the Bill & Melinda Gates Foundation.
In 2018, the Gates foundation pledged to donate more than $15 million to Harvard University to establish Opportunity Insights. The foundation contributed nearly $1.7 million that year to Third Way’s charitable arm, accounting for about 20 percent of the group’s revenue, according to IRS tax returns.
The Opportunity Insights study found that middle and upper-class families didn’t immediately spend the entire $600 survival checks authorized by Congress in December. The economists used their findings to argue that survival checks should be cut off for individuals earning more than $50,000 per year and couples earning more than $75,000 per year.
By comparison, the first two COVID survival checks of $1,200 and $600 were sent in full to individuals who made less than $75,000 per year and couples who made less than $150,000. The changes they recommended could deny or reduce aid to nearly half of Americans, according to census data.
Thanks to the study and an elite media propaganda campaign, the White House and Democratic lawmakers have considered phasing out direct payments for individuals making more than $50,000 or married couples making more than $100,000 — a change that could deny aid to 40 million Americans.
The Daily Poster interviewed several people who could be impacted by these changes — and they all said they do in fact need the money, no matter what a handful of economists toying with spreadsheets say.
As the American Prospect’s David Dayen and economist Claudia Sahm pointed out earlier this week, the study has massive flaws that were never disclosed in any of the articles hyping its findings.
“Not An Emergency”
After The Intercept’s Ryan Grim said that Third Way wants to see government spending on survival checks become less popular politically, Third Way executive vice president Matt Bennett asserted that the survival checks “have to be means tested,” adding: “All we are debating is the line.”
When a Twitter user pointed out the checks don’t actually have to be means tested, Bennett replied: “You favor giving checks to the Trump kids?”
This is, of course, the same rationale that Democratic technocrats like Pete Buttigieg give to explain why college shouldn’t be free.
Third Way has made similar arguments against student debt forgiveness, claiming it “primarily benefits upper middle-class people who attended elite four-year colleges” — even though canceling student debt would in fact “greatly reduce the burden of student debt more for lower-income indebted households,” according to economist Marshall Steinbaum.
On Thursday, Bennett told Politico that increasing the minimum wage to $15 — as Biden has proposed doing in his COVID relief bill — isn’t an “emergency.”
“Raising the minimum wage is important but it’s not an emergency,” Bennett said, arguing instead that renewing expanded unemployment insurance “is an emergency.”
Of course, there is no reason that Democrats have to only do one or the other. Pitting these items against each other is a form of austerity.
After his comments generated blowback on Twitter, Bennett responded: “I totally agree that no one should have to work for $8/hr.”
But he questioned whether Democrats in Congress will be able to raise the minimum wage under the budget reconciliation process, and argued again that “we simply must not allow [unemployment insurance] to run out.”
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