(CBS Detroit) – Many are already wondering about a fourth stimulus control, even though the third round of economic aid is still distributed to eligible Americans. As of last week, a total of approximately 130 million payments of up to $ 1,400 per person have been delivered. This adds to about $ 335 billion of the $ 422 billion allocated in the $ 1.9 trillion American Rescue Plan Act. Paper checks and PPE cards continue to arrive in the mail every day.
These aid payments are part of a comprehensive effort to cushion the economic impact of COVID on households and to support the economy as it recovers from the pandemic. The incentive package also expands unemployment benefits, strengthens the tax credit for children and more. The recent round of stimulus checks follows payments of $ 1,200 at the start of the pandemic and payments of $ 600 in early January. But some politicians believe that this latest effort, in addition to previous efforts, will still not be enough.
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Who supports a fourth stimulus control?
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 calling for “recurring direct payments and automatic extensions of unemployment insurance related to economic conditions.” ”.
As the senators argued in their letter, “this crisis is far from over, and families deserve the certainty 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 deadlines and ad hoc solutions. ”
An earlier letter to President Biden and Vice President Kamala Harris from 53 representatives, led by Ilhan Omar of Minnesota, set out 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 are also in favor of recurring aid payments. According to a January survey of progress data, nearly two-thirds of voters support monthly payments of $ 2,000 to all Americans for the duration of the pandemic. Supporters include a majority of independents and Republicans. Many economists are also on board. An open 2020 letter from industry experts argued that “direct cash payments are a key tool that will increase economic security, boost consumer spending, accelerate recovery and promote certainty at all levels of government and economics – as long as necessary. . ”
Why a control of the fourth stimulus is unlikely
All of these voice aids keep alive the possibility of another round of stimulus checks – or recurrent stimulus checks -. However, it probably doesn’t make them. And there are a number of reasons why.
Vaccinations are progressing well, with three different options available to the public. The president recently said that 90% of American adults will be eligible by mid-April. In fact, putting needles in their arms takes longer, although most states have reduced the age required to qualify. The administration is on track to reach its revised target of 200 million doses in its first 100 days. Americans received over 165 million doses, with 32% of the population receiving at least one dose and 18.5% fully vaccinated. The number of vaccinations continues to increase at a rate of almost three million doses per day.
With the steady growth of vaccinations, the economy is showing signs of recovery. Unemployment remains higher than in non-pandemic periods. About 719,000 people initially applied for unemployment insurance in the last full week of March, slightly higher than the previous week. (A typical pre-pandemic week saw about 250,000 new unemployment claims.) But the average over four weeks is the lowest in the past year. Consumer confidence continues to rise, reaching its highest level since the beginning of the pandemic. Almost 41% of consumers also see improved business conditions over the next six months, up more than 10% from the previous month.
Consumer spending accounts for two-thirds of the country’s economy. And the third stimulus control has increased people’s spending power and probably increased their optimism in the future. Ongoing vaccinations, which will eventually allow affected parts of the economy to reopen safely, certainly help. All of these additional costs, along with the release of accumulated demand, should lead to more jobs as companies commit to meeting consumer needs. With the opening of the economy, a fourth round of stimulus controls is becoming less necessary.
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The American Rescue Plan Act was passed along party lines. Republicans were not interested in spending nearly $ 1.9 trillion anywhere, although some backed the third round of stimulus checks. They called the package a “blue state bailout”, claiming that it goes far beyond the scope of COVID and will 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 be passed by a simple majority, rather than by 60 filibuster-resistant votes. Given the rules, in general, only one reconciliation bill can pass per fiscal year. But the fiscal year ends in October. So another package of stimuli could be brought in the fall and, theoretically, pushed with reconciliation. Otherwise, it would need at least 10 Republican votes, along with every Democratic vote.
But the Biden administration has other priorities. One of the biggest is the adoption of the recently introduced infrastructure plan, which also faces the Republican opposition. The US job plan was unveiled last week. Worth $ 2 trillion, it aims to rebuild roads, repair bridges, remove lead pipes, modernize the country’s electricity grid and much more. Does not include another stimulus check. Republicans oppose, in part, the plan for its dependence on higher corporate taxes.
The American Family plan is set to be announced in a few weeks. What it will contain has not been announced, although it could cost another 1 to 2 trillion dollars. According to the administration, the funding would come from higher taxes on rich people. Republicans are likely to oppose these tax increases as well.
Lots of negotiations and possible cuts seem inevitable before any of the plans reach a vote. And Biden will face an upward battle, drawing 10 votes in the Senate in both cases. As a result, Democrats may well anticipate the need for another round of reconciliation to promote a signed piece of legislation. The chances of them using it to pass a fourth stimulation test instead are low.
What other help is coming?
Although a fourth stimulus control is unlikely, more direct payments to Americans have already been signed into law. The American Rescue Plan Act includes an improved child tax credit and extended unemployment benefits.
Under the revised child tax credit, the Internal Revenue Service (IRS) will pay $ 3,600 per year for each child up to the age of five and $ 3,000 per year for each child between the ages of six and 17. Payments will be issued automatically periodically. July-December 2021, the rest being issued when the recipient files their taxes for 2021. (Many expect “periodic” to actually mean monthly or possibly quarterly, but the IRS must determine this.) The benefit will not depend on the current tax burden. of the beneficiary. In other words, eligible families will receive the full amount, no matter how much – or little – they owe in taxes. Payments will begin to be phased out beyond an annual income of $ 75,000 for individuals and over $ 150,000 for married couples. The more generous credit will only apply for 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. Beneficiaries with household incomes of less than $ 150,000 will not have to pay taxes for the first $ 10,200 in unemployment benefits. Those eligible for Emergency Unemployment Compensation (PEUC), which cover people who have consumed their state benefits, and Pandemic Unemployment Assistance (PUA), which covers self-employed workers and concert workers, will also see their benefits extended until early September. PEUC is depleted after 53 weeks. PUA expires after 79 weeks.
The large-scale US employment plan includes some elements that are not traditionally associated with infrastructure. They range from $ 213 billion for affordable housing to $ 100 billion for disadvantaged groups. The plan also aims to increase salaries for carers aiming for the elderly and people with disabilities. Each of these efforts would mean more money for those affected. On a larger scale, the plan also has the potential to create many jobs in a large area of the economy. The extra money in people’s pockets is still hypothetical, of course. The plan has yet to find its way through Congress.
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