(CBS Detroit) – Many are already asking for a fourth stimulus check, although the third round of economic relief is still being distributed to eligible Americans. Last week, a total of about 130 million payments of up to $ 1,400 per person were delivered. That adds up to about $ 335 billion of the $ 422 billion allocated in the $ 1.9 trillion American Rescue Plan Act. Paper checks and EIP cards continue to arrive in the mail every day.
These relief payments are part of a broad effort to cushion COVID’s economic impact on families and support the economy as it recovers from the pandemic. The stimulus package also extends unemployment insurance, strengthens children’s tax credit and more. The recent round of stimulus checks follows payments of $ 1,200 at the beginning of the pandemic and payments of $ 600 in early January. But some politicians think that this latest effort, in addition to previous efforts, will still not be enough.
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Who supports the fourth stimulus check?
Last week, a group of Democratic senators, including Ron Wyden of Oregon, Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont, sent a letter to President Joe Biden requesting “recurring direct payments and automatic extensions of unemployment insurance linked to economic conditions” .
As the senators argued in their letter, “this crisis is far from over and families deserve the assurance that they can put food on the table and keep a roof over their heads. Families should not be at the mercy of constantly changing legislative schedules and ad hoc solutions. “
A previous letter to President Biden and Vice President Kamala Harris of 53 representatives, led by Ilhan Omar, from Minnesota, defended a similar position. “Recurring direct payments until the economy recovers will help ensure that people can meet their basic needs, provide racially equitable solutions and shorten the duration of the recession.”
Most Americans also favor recurring relief payments. According to a January survey by Data For Progress, nearly two-thirds of all voters support monthly payments of $ 2,000 to all Americans during the pandemic. Supporters include the majority of independents and Republicans. Many economists are also on board. An open letter from experts in the field in 2020 argued that “direct cash payments are an essential tool that will increase economic security, boost consumer spending, accelerate recovery and promote certainty at all levels of government and the economy. – for as long as necessary. “
Why a fourth stimulus check is unlikely
All of this express support keeps alive the possibility of another round of stimulus tests – or recurrent stimulus tests. This does not make them likely, however. And there are a number of reasons for this.
Vaccinations are progressing well, with three different options available to the public. The president recently stated that 90 percent of American adults will be qualified by mid-April. In fact, putting needles in your arms takes longer, although most states have reduced the age required to qualify. Management is on track to meet its revised target of delivering 200 million doses in the first 100 days. Americans received more than 165 million doses, with 32% of the population having received at least one dose and 18.5% completely vaccinated. The number of vaccines continues to increase at a rate of nearly three million doses per day.
With the steady increase in vaccinations, the economy is also showing signs of recovery. Unemployment remains higher than in periods without a pandemic. Approximately 719,000 people initially applied for unemployment insurance in the last full week of March, up slightly from the previous week. (A typical pre-pandemic week saw about 250,000 new unemployment claims.) But the four-week average is the lowest in more than a year. Consumer confidence continues to rise, reaching its highest level since the start of the pandemic. Almost 41% of consumers also see business conditions improving in the next six months, an increase of more than 10% over the previous month.
Consumer spending drives two-thirds of the country’s economy. And the third stimulus check increased people’s purchasing power and probably boosted their optimism in the future. The ongoing vaccines, which will allow the most affected parts of the economy to be reopened safely, certainly help. All of these additional expenses, together with the release of pent-up demand, are expected to generate more jobs as companies hire to meet the needs of consumers. With the economy open, a fourth round of stimulus checks becomes less necessary.
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The American Rescue Plan Act was approved according to party lines. Republicans were not interested in spending close to $ 1.9 trillion, although some supported the third round of stimulus checks. They called the package a “blue state bailout”, claiming that it went well beyond the scope of COVID and would increase the deficit, leading to inflation.
Democrats used a process called reconciliation to pass the bill in the Senate without Republican support. This allows budget issues to proceed with a simple majority, instead of 60 obstruction-proof votes. Given the rules, generally only one reconciliation invoice can be approved per fiscal year. But the fiscal year ends in October. Therefore, another stimulus package could be presented in the fall and, in theory, carried forward with reconciliation. Otherwise, at least 10 Republican votes would be required, along with each Democratic vote.
But the Biden government has other priorities. One of the biggest is the approval of the recently presented infrastructure plan, which also faces the Republican opposition. The American Employment Plan was revealed last week. Worth $ 2 trillion, the goal is to rebuild roads, repair bridges, eliminate lead pipes, modernize the country’s power grid and much more. It does not include another stimulus check. Republicans oppose the plan, in part, because of their reliance on higher corporate taxes.
The American Family Plan will be announced in a few weeks. What it will contain has not been announced, although it could cost another $ 1 to $ 2 trillion. According to the government, the funding would come from higher taxes on wealthy people. Republicans are also likely to oppose these tax increases.
Many negotiations and a possible reduction seem inevitable before either plan is voted on. And Biden will face an uphill battle attracting 10 votes in the Senate in both cases. As a result, Democrats may well be anticipating the need for another round of reconciliation to pass a signature piece of legislation. The chances of them using it to pass a fourth stimulus check, instead, are low.
What other help is coming?
While a fourth stimulus check is unlikely, more direct payments to Americans have already been made into law. The American Rescue Plan Act includes an enhanced child tax credit and extended unemployment benefits.
According to the revised Child Tax Credit, the Internal Revenue Service (IRS) will pay $ 3,600 per year for each child up to five years old and $ 3,000 per year for each child aged six to 17 years. Payments will be issued automatically on a periodic basis from July to December 2021, with the remainder issued when the recipient files their 2021 taxes. (Many expect “periodic” to actually mean monthly or possibly quarterly, but the IRS still needs to determine this.) The benefit will not depend on the recipient’s current tax burden. That is, qualified families will receive the full amount, regardless of how much – or little – they owe in taxes. Payments will begin to decline in addition to an annual income of $ 75,000 for individuals and beyond $ 150,000 for couples. The most generous credit will apply only to 2021, although Democrats are likely to seek to extend it.
The American Rescue Plan Act also extended the $ 300 weekly federal unemployment insurance bonus until Labor Day. Recipients with a family income below $ 150,000 will not have to pay taxes on the first $ 10,200 in unemployment benefits. Those eligible for Pandemic Emergency Unemployment Compensation (PEUC), which covers people who have used their state benefits, and Pandemic Unemployment Assistance (PUA), which covers freelancers and concert workers, they will also see their benefits extended through early September. PEUC runs out after 53 weeks. The PUA expires after 79 weeks.
The comprehensive American Employment Plan includes some elements not traditionally associated with infrastructure. These amounts range from $ 213 billion earmarked for affordable housing to $ 100 billion earmarked for workforce development among disadvantaged groups. The plan also aims to increase the remuneration of caregivers who care for the elderly and disabled. Each of these efforts would mean more money for the people affected. On a broader scale, the plan also has the potential to create many jobs across a wide range of the economy. The additional money in people’s pockets is still hypothetical, of course. The plan is yet to be approved by Congress.
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