(CBS Detroit) – Many are already asking for a fourth stimulus test, even though the third round of economic relief is still being distributed to American Americans. As of last week, a total of approximately 130 million payments of up to $ 1400 per person have been delivered. That equates to about $ 335 billion of the $ 422 billion allocated in the $ 1.9 billion U.S. Rescue Plan Act. Paper checks and EIP cards are issued daily.
These relief payments are part of a broad effort to dampen COVID’s economic impact on households and support the economy while recovering from the pandemic. The stimulus package also increases unemployment benefits, strengthens the child tax credit and much more. The recent round of stimulus checks follows the $ 1200 payments at the start of the pandemic and the $ 600 payments in early January. But some politicians believe that this last attempt, in addition to previous attempts, will still not be enough.
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Who supports a fourth stimulus test?
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 asking for “recurring direct payments and automatic renewal of unemployment insurance related with economic conditions. “
As the Senators argue in their letter, ‘this crisis is far from over, and families deserve assurance that they can put food on the table and keep a roof over their heads. Families should not be at the mercy of ever-changing legislative timelines and ad hoc solutions. ”
In an earlier letter to President Biden and Vice President Kamala Harris of 53 representatives, led by Ilhan Omar of Minnesota, a similar position is expressed. “Recurring direct payments until the economy recovers will help ensure that people can meet their basic needs, provide solutions at a racial level and shorten the recession longer.”
A majority of Americans are also in favor of recurring payments. According to a January poll by Data For Progress, nearly two-thirds of all voters support $ 2,000 a month in payments to all Americans for the pandemic. Supporters include a majority of Independents and Republicans. Many economists are also on board. An open 2020 letter from experts in the field argues’ direct cash payments are an essential tool that will increase economic security, increase consumer spending, accelerate recovery and promote security at all levels of government and the economy – as long as is necessary. ”
Why a fourth stimulus test is unlikely
All of this pronounced support keeps alive the possibility of another round of stimulus checks – or repetitive stimulus checks. However, this does not make them likely. 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 percent of American adults are eligible by mid-April. Taking needles into the arms takes longer, although most states have lowered the age to qualify. The administration is well on its way to achieving its revised target of administering 200 million doses in the first 100 days. Americans received more than 165 million doses, with 32 percent of the population receiving at least one dose and 18.5 percent being completely vaccinated. Vaccination numbers continue to increase by about three million doses per day.
With the increase in vaccinations, the economy is also showing signs of recovery. Unemployment remains higher than during non-pandemic times. About 719,000 people initially applied for unemployment insurance in the last full week of March, slightly higher than the previous week. (In a typical week before the pandemic, about 250,000 new unemployment applications were submitted.) But the average over four weeks is the lowest since one year. Consumer confidence continues to rise, reaching its highest level since the start of the pandemic. Nearly 41 percent of consumers also see business conditions improve over the next six months, compared to ten percent over the previous month.
Consumer spending drives two-thirds of the country’s economy. And the third stimulus test has increased people’s spending power and is likely to increase their optimism in the future. The ongoing vaccinations, which will eventually allow the hard-hit parts of the economy to reopen safely, certainly help. All this extra spending, coupled with the release of pent-up demand, should lead to more jobs as companies hire to meet the needs of the consumer. With the opening up of the economy, a fourth round of stimulus tests becomes less necessary.
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The U.S. Rescue Plan Act was enacted along party lines. Republicans were not interested in spending nearly $ 1.9 billion, although some supported the third round of stimulus tests. They call the package a ‘blue state rescue’ and claim that it goes beyond the scope of COVID and would increase the deficit, leading to inflation.
The Democrats used a process called reconciliation to pass the bill without Republican support in the Senate. This allows budget-related matters to proceed with a simple majority, rather than with 60 votes cast by the filibuster. In view of the rules, only one reconciliation account per financial year can pass. But the financial year ends in October. Thus, another stimulus package can be brought forward in the fall and, in theory, pushed through reconciliation. Otherwise, it would need at least ten Republican votes, along with each Democratic vote.
But the Biden administration has other priorities. One of the biggest is to implement the recently launched infrastructure plan, which also faces Republican opposition. The U.S. Jobs Plan was launched last week. It’s worth $ 2 billion, and it’s aimed at rebuilding roads, repairing bridges, removing lead pipes, modernizing the country’s electrical network and much more. It does not include another stimulus test. Republicans oppose the plan, in part for the reliance on higher corporate taxes.
The US family plan will be announced in a few weeks. Its contents have not been disclosed, but it could cost another $ 1 to $ 2 billion. According to the administration, funding would come from higher taxes on wealthy individuals. Republicans are also likely to oppose these tax increases.
Many negotiations and possible mating seem inevitable before any plan comes to a vote. And Biden will get an uphill battle in both cases that attracts ten votes in the Senate. As a result, Democrats could very well anticipate the need for a further round of reconciliation to push through signature legislation. The chances of them using it to pass a fourth stimulus test instead are low.
What other help is coming?
Although a fourth stimulus test is unlikely, more direct payments to Americans have already been signed. The U.S. Rescue Plan Act contains an improved child tax credit and extensive unemployment benefits.
Under the revised child tax credit, the Internal Revenue Service (IRS) pays out $ 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. July to December 2021, with the remainder issued when the recipient files their 2021 tax. (Many expect ‘periodic’ to actually mean monthly or possibly quarterly, but the IRS has yet to determine that.) The benefit does not depend on the recipient’s current tax burden. In other words, qualifying families will receive the full amount, no matter how much – or little – tax is owed to them. Payments will begin to decline to an annual income of $ 75,000 for individuals and more than $ 150,000 for married couples. The broader credit only applies to 2021, though the Democrats are likely to extend it.
The U.S. bailout plan also extended the $ 300 weekly federal unemployment insurance bonus through Labor Day. Recipients with household income below $ 150,000 do not have to pay tax on the first $ 10,200 unemployment benefits. Those eligible for Emergency Unemployment Benefit (PEUC), which covers people who have used up their state benefits, and Pandemic Unemployment Assistance (PUA), which covers freelancers and gig workers, will also extend their benefits until early September. PEUC runs out after 53 weeks. PUA expires after 79 weeks.
The far-reaching US work plan contains some elements that are not traditionally related to infrastructure. It ranges from $ 213 billion earmarked for affordable housing to $ 100 billion earmarked for labor force development among non-employed groups. The plan also wants to increase the compensation of carers who are older and disabled. Each of these efforts would mean more money for those affected. On a broader scale, the plan also has the potential to create many jobs in a wide part of the economy. Of course, the extra money in people’s pockets is still hypothetical. The plan must still find its way through Congress.
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