Over 169 million direct stimulus payments have already been made, with more than 2 million people receiving checks for $1,400 issued by IRS in July. However, there are lawmakers who would like to see financial aid recurring until the pandemic ends.
The federal government has already made $3200 payments to eligible adults in response to the Coronavirus pandemic-caused economic crisis.
The relief measure signed by President Joe Biden in March will grant 1,200 dollars under the Coronavirus Aid Relief and Economic Security Act; 600 dollars in December; and $1,400 under the American Rescue Plan.
While millions of Americans have received financial assistance, they still face financial hardship, and the spread of the Delta variant is complicating the economy further. Recent Census survey data show nearly a quarter of Americans can’t afford their household expenditures.
More so, there is still a 5.2% unemployment rate, which is substantially higher than the 3.5% rate before the pandemic. While businesses are expanding and hiring more hands, there are over 5.3 million fewer workers today than during the pre-pandemic.
Several economic experts have warned that the Delta variant is spreading at an alarming rate.
“Uncertainty and hesitancy may ultimately lead to a more slow-burning recovery from here than our baseline estimates,” said Ben May, director of global macro research at Oxford Economics.
In the course of the same time, 9.1 million people were unable to receive enhanced unemployment benefits as a result of the expiration of federal benefits. Sadly, this will take out approximately $5 billion from the benefits going to the unemployed each week.
On the latest stimulus check of $1400, in a letter signed by 21 senators to Mr. Biden on March 30, the senators showed their support for the recurring stimulus payments, emphasizing that the $1,400 tax payment the IRS is distributing won’t last for long.
“Almost 6 in 10 people say the $1,400 payments set to be included in the rescue package will last them less than three months,” the senators wrote in the letter.
Also, state governments are creating stimulus checks of their own and for their state and its inhabitants. A new initiative from governor Gavin Newsom is likely to qualify about two-thirds of residents of California for a “Golden State Stimulus” check.
Read More: Is It Possible to Get Unemployment Benefits After Refusing COVID-19 Vaccine?
Residents with low- or middle-incomes will receive $600 if their 2020 tax returns have been filed. To help offset the effects of the pandemic, parts of Florida and Texas have also approved bonuses for teachers.
The Senators’ letter does not specify how much they are seeking in payments. However, a separate effort from Democrats in January called for $2,000 monthly payments until the pandemic ends. As an alternative, every qualifying adult and child who was eligible got $1,400 under the American Rescue Plan.
July 15 Deposits For Child Tax Credits
As part of the stimulus package, some families received cash payments on July 15 via the IRS depositing funds into bank accounts of the eligible parents for the Child Tax Credit (CTC). A typical average family got $423 in their initial CTC payment, according to the left-wing advocacy group Economic Security Project’s analysis of Census data.
Through December, qualified families will get up to $1,800 in cash, which is to be split into six equal monthly installments starting in July and ending in December. President Joe Biden’s American Rescue Plan further includes the expanded CTC, which is responsible for this funding.
For children under the age of 6 and children between the ages of 6 and 17, qualified families will receive $300 per month. Children’s care, back-to-school supplies and other essentials are among the expenses that the families told CBS MoneyWatch they will spend the extra money on.
As the American Families Plan moves forward, more tax breaks may be available to families. According to the latter plan, families would receive bigger tax breaks for children for the next four years after the Child Tax Credit expands through 2025.
Many Spend The Stimulus Checks On Emergency Debts And Saving
A recent analysis by the Federal Reserve Bank of New York found that people have so far used most of the stimulus funds to pay down debt or save money. This may mean many spend the money towards paying off debts incurred during the pandemic, as well as building up an emergency fund in the event of another shock.
Bankrate.com reported in April that a third payment is hoped to come soon for seven out of ten Americans who have received the previous stimulus checks. The later ratio dropped down from eight out of ten people in March 2020. In spite of this, more than a year later, the number of people needing additional help remains high, according to the personal finance firm.
An estimated one-third of people said they would be able to support themselves for less than one month with the stimulus aid.
Researchers have found that the stimulus payments saved millions of Americans from hardship. The University of Michigan also discovered that hardship increased in November and December when stimulus faltered, like the fall of last year, when Congress was unable to pass another round of stimulus.
Read More: Unemployment Benefits: Will AOC Be Able to Extend It Until 2022?
Living Pay Check To Pay Check
A number of prominent economists have advocated for more direct aid to the American people. About 150 economists, including Jason Furman of the Obama administration, drafted a letter last year supporting “recurring direct stimulus payments, lasting until the economy recovers.”
While the economy is booming, Nasif said that millions of people are still suffering from low incomes and cannot access government aid programs. On another scale, a March study by economist Eliza Forsythe found that only 4 in 10 unemployed workers received unemployment benefits. It was also discovered that unemployment benefits are not applied by a lot of people because they are not sure that they qualify for them, while others may have given up because they have experienced long wait times.
“You’ll see reports about how the economy is starting to grow, but there are a lot of Americans living paycheck to paycheck, and for a lot of them the government relief programs haven’t been able to help,” the Humanity Forward political director Greg Nasif stated.
Is The Fourth Stimulus Check Coming Or Not?
“I think it’s unlikely at this time,” Raymond James analyst Ed Mills said to CNBC. A crucial reason for this is that the Biden administration is committed to building up the nation’s infrastructure, including investing in affordable housing and roads, as well as rebuilding the country’s aging schools and airports.
According to Stifel’s Brian Gardner in a research note dated August 11, the proposal backed by the White House would raise the corporate tax rate from 21% to 28% to fund the proposal.
“The fall is shaping up to be a busy time in Washington as Congress tries to finish two infrastructure bills (one which includes tax hikes), approve the annual spending bills, and raise the debt ceiling,” he noted.
Stimulus Checks: What Difficulties has New Delta Variant Caused
Meanwhile, the economic rebound was facing dire obstacles as the Delta variant spread across the country. There is a spike in COVID-19 cases in states with low vaccination rates, which could put a stop to people working in restaurants and other places where they are exposed to the public.
A study further noted that workers opt to stay home as a result of fear of contracting COVID-19 or must stay home to care for family members who have the illness.
Nonetheless, in line with the COVID-19 surge in the state, Texas has lost nearly 72,000 jobs and more than $13 billion in annual output, according to a recent study.
The deadline for the federal unemployment benefits covering pandemic workers expired on September 6. This timeline marked the end of Programs that offered jobless benefits to gig workers, part-time employees, and others who do not meet the requirements for unemployment compensation.
An expert later disclosed that many households could be affected by this. He said:
“This cliff threatens the economic recovery progress we have made by draining the economy of consumer spending and will put millions of workers at risk of lasting hardship,” said Century Foundation senior fellow Andrew Stettner in a statement.