The CEO and president of the National Retail Federation, Matthew Shay, says consumers have kept the economy afloat for the past 10 months.
After months of close negotiations, Congress passed a $ 900 billion coronavirus bailout bill on Monday that would send a second stimulus check to millions of Americans still spinning because of the pandemic – likely boosting consumer spending and preventing the rise of poverty.
12 MILLION AMERICAN FALLS LOSS UNEMPLOYMENT BENEFITS DAY AFTER CHRISTMAS
The measure includes a $ 600 cash payment for Americans who earned less than $ 75,000 in 2019, half the size of checks sent earlier this year with the adoption of the CARES Act in March, as well as $ 600 per child. If approved by President Trump, the payments will be reduced for those with higher incomes (5% of the amount by which the adjusted gross income exceeded the initial threshold) and will be completely eliminated for those earning more than $ 87,000.
An October study published by the Peter G. Peterson Foundation, a nonpartisan group, found that the economy had a “modest boost” due to higher spending by less wealthy Americans. Beneficiaries of the check were more likely to spend money on necessities such as food, household goods, utilities, rent, mortgages and credit cards, which means that these sectors saw the greatest benefit.
“Because the payments helped alleviate the loss of employment-based income for many low- and middle-income households, those families were more likely to use the funds to pay for their expenses, rather than save or use them for to pay off existing debts, “the study said.
DEMOCRATS SEE SEE $ 900M COVID PACKAGE USE ONLY
Overall, the study concluded that payments boosted the nation’s economic output by 0.6% in 2020, much lower than the $ 600-a-week unemployment benefit and the Wage Protection Program.
A separate study published by the National Bureau of Economic Research found that households responded quickly once they received the money, spending $ 0.25 to $ 0.40 per stimulus dollar in the first few weeks.
A shopkeeper leaves a department store on Tuesday, October 27, 2020, in Boston. (Photo by AP / Steven Senne)
Expenditures were higher among lower-income households, higher income declines and lower liquidity levels, according to the study, “emphasizing the importance of guidance.”
“Liquidity plays the most important role, with no significant response to spending for households with large checking account balances,” the study said.
12 MILLION AMERICAN FALLS LOSS UNEMPLOYMENT BENEFITS DAY AFTER CHRISTMAS
An earlier analysis by Columbia University’s Center for Poverty and Social Policy showed that without the $ 2.2 trillion CARES bill, the nation’s only measure of poverty would have risen to 16.3 percent from 12.8 percent. percent before the crisis. During the 2008 financial crisis, the poverty level reached about 16%, according to the US Census Bureau.
But the government’s massive response to the virus outbreak and the subsequent economic blockade helped the poverty rate remain virtually unchanged at 12.7 percent, the researchers said.
Trump on Tuesday night called on Congress to increase the size of stimulus controls to $ 2,000, calling the $ 600 proposal “ridiculously low” and threatening to torpedo the aid deal.
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Democrats plan to force a vote this week to triple the pay size.
“Finally, the president agreed to $ 2,000,” House Speaker Nancy Pelosi wrote on Twitter. “Democrats are ready to bring this up this week with unanimous agreement. Let’s do it!”
A source told FOX Business that Democrats will try to pass an independent $ 2,000 direct payments bill on Thursday, although it is unclear whether he will receive the unanimous consent needed to move into the House or free the Republican-controlled Senate.