Funding Direct Payments to Americans Through Social Security Deferral

16 Pages Posted: 21 Apr 2020

See all articles by Andrew G. Biggs

Andrew G. Biggs

American Enterprise Institute

Joshua D. Rauh

Stanford Graduate School of Business; Hoover Institution; National Bureau of Economic Research (NBER)

Date Written: April 19, 2020


We analyze in this whitepaper a way of addressing both targeting and financing in a direct payment (or “stimulus check”) program to provide households with additional liquidity during the economic downturn associated with the COVID-19 virus: by allowing voluntary loans to individuals in which the proceeds would be paid back through deferral of Social Security retirement benefits at the time when the individual claims Social Security. Specifically, those individuals that choose to receive a check would have the balance carried forward at a pre-specified, favorable government interest rate until the time that they choose to claim Social Security. At that time, the loan would be repaid out of the very first Social Security checks the individual would otherwise receive. Those who choose to receive no check would keep their Social Security retirement benefits unchanged. For most individuals, the delay that could be expected to repay a $5,000 check would be at most 3 months in order to make the program budget neutral.

Keywords: stimulus checks, economic stimulus payments, Social Security, COVID-19 policy

JEL Classification: H12, H24, H31, H55, H63

Suggested Citation

Biggs, Andrew G. and Rauh, Joshua D., Funding Direct Payments to Americans Through Social Security Deferral (April 19, 2020). Stanford University Graduate School of Business Research Paper No. 3580533, Available at SSRN: or

Andrew G. Biggs

American Enterprise Institute ( email )

1150 17th Street N.W.
Washington, DC 20036
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202-862-5841 (Phone)


Joshua D. Rauh (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Hoover Institution ( email )

Stanford, CA 94305-6010
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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