Far from the glare of the campaign stage, a subtle but distinct transition is going on in how Washington thinks about the economy. Contrary to President Joe Biden’s assertion that the US economy is “strong as hell,” a recent Washington Post article describes how, “as recession fears rise,” unnamed White House and congressional officials are making plans for a new round of federal stimulus spending:

Officials at the White House and the Federal Reserve say that they continue to believe a recession can be avoided and that they remain focused on fighting inflation, which is rising at rates not seen in four decades. But with Wall Street trembling, and many private forecasters warning that recession is likely, preliminary talks about policy options are underway around town.

On Capitol Hill, congressional officials have begun discussing the challenge of intervening to alleviate the pain of a recession in ways that do not exacerbate inflation. At the White House, aides have informally begun weighing hypothetical options, such as unemployment benefits and food stamp assistance.

A recent Politico article details the constraints that high inflation and debt impose on those policy ambitions:

During recent downturns, Congress helped cushion the blow by flooding the economy with stimulus checks and other relief. But doing that now while inflation is raging — even if it were politically possible — would pile on even more debt and could rattle investors wary of policies that could stoke higher prices. That’s a lesson that outgoing British Prime Minister Liz Truss learned the hard way.

“Any more big additions to the deficit are really risky,” said Jason Furman, who served as chairman of the Council of Economic Advisers under President Barack Obama.

That informs what policymakers shouldn’t do, such as reviving extraordinarily costly pandemic benefit programs, much less making them permanent, as some have proposed. Those temporary programs offered unprecedented unemployment benefits exceeding former paychecks for many, including millions who never paid into the unemployment insurance system. They also offered lengthy extended benefits even in states with low unemployment rates, and were subject to staggering fraud and abuse. In the end, half of the states decided that ending the programs was better than letting them continue.

Policymakers should also recognize that, even without a new federal stimulus law, existing automatic stabilizer programs will provide growing relief if more lose their jobs or otherwise see their incomes shrink.

Laid-off workers will access up to 26 weeks of state unemployment checks, and tens of millions of low-income households will collect federal food stamp benefits, which remain enlarged in many states today. Those open-ended entitlements are always available to all who qualify. Additional assistance, and federal funds, also will be available to the long-term unemployed where finding new work is especially difficult, as reflected by their state’s elevated unemployment rate. In those places, extended benefit checks—lasting up to 20 extra weeks, or over 10 months when combined with state unemployment checks—are payable under the current law Extended Benefits (EB) program.

Since its creation in 1970, the EB program has expected states to pay for half of program costs, with two exceptions—during the Great Recession and the pandemic, when its benefits were fully federally funded as part of costly stimulus legislation. If the US average unemployment rate stays below “5 or 6 percent” as analysts cited by the Washington Post expect, then unemployment may remain below 5 or even 4 percent in some states, balancing others where unemployment might reach 7 percent or more. The EB program offers additional assistance to the long-term unemployed in the latter states, but not the former, with eligible states contributing half of benefit costs. That’s more than appropriate, especially when states have been so flush with federal cash that some created new unemployment benefits for those not authorized to work in the US or sent out waves of stimulus checks in recent weeks.

Lawmakers should start any plans for relief in a coming recession by letting the EB program work as current law intends, instead of having the federal government again take on all responsibility for program benefits as it has in the past two recessions. Doing so will better target additional help where most needed, reduce the potential for fraud and abuse, and mitigate further “really risky” big additions to the federal deficit.

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