The IRS has issued 156 million payments in the third round of direct incentives, with 25 million people queuing this week to receive $ 1,400 in checks. But some lawmakers are pushing for a fourth round of stimulus aid that will effectively send periodic payments until the pandemic ends.
So far, the federal response to the economic crisis caused bydelivered $ 3,200 to each adult adult: $ 1,200 through the Coronavirus Assistance and Economic Security Act in March 2020; $ 600 as a relief measure in December; and $ 1
Despite this financial aid, millions of Americans remain in financial distress, with about 4 in 10 people saying their incomes remain below pre-pandemic levels, according to a recent study by financial services firm TransUnion. Unemployment remains high, especially in low-wage industries such as food services and hospitality, where demand is still lagging behind rising coronavirus levels.
In short, for many people, the last round of $ 1,400 checks may not last long – a problem that iswho continue to struggle with unemployment and the weak labor market.
Twenty-one senators – all Democrats – signed a letter to Mr Biden on March 30 in support of repeated incentive payments, stating that the $ 1,400 payment distributed by the IRS would not put pressure on people for long.
“Nearly six in 10 people say the $ 1,400 payments that will be included in the rescue package will take them less than three months,” the senators wrote in the letter.
Although the letter does not specify how much payments senators are seeking, a separate effort from Democratic lawmakers in Januaryfor $ 2,000 monthly inspections until the pandemic ended. Instead, the U.S. Rescue Plan allows $ 1,400 for each adult adult and addict.
Still living salary to salary
Some top economists have called for more direct help from Americans. More than 150 economists, including former Obama administration economist Jason Furman, signed a letter last year arguing for “recurring direct stimulus payments to continue until the economy recovers.”
Although the economy is improving, including aMillions of people continue to suffer from reduced incomes and have failed to benefit from state aid programs, said Greg Nasif, political director of Humanity Forward, a non-governmental organization pushing for periodic incentive payments. Only 4 out of 10 unemployed actually received unemployment benefits, according to a March study by economist Eliza Forsythe.
Many people have never applied for unemployment benefits because they did not think they were eligible, while others may have given up due to long waits and other problems.
“You will see reports of how the economy is starting to grow, but there are many Americans who live from paycheck to paycheck, and for many of them, government relief programs have failed to help,” Nasif said.
How likely is the fourth stimulus test?
Don’t hold your breath, according to Wall Street analysts. “I think it’s unlikely at this point,” Raymond analyst James Ed Mills told CNBC. One reason is that the Biden administration is focused on its progressthat would change the economy by rebuilding aging schools, roads and airports, as well as investing in projects ranging from affordable housing to broadband.
The proposal, which the White House says will be funded by raising the corporate tax rate from 21% to 28%, may be “harder to accept” than the relief bill, which provided $ 1,400 checks to most Americans due to opposition from Republicans and some Democrats, noted last month Washington’s chief strategic strategist, Stifel Brian Gardner.
Many households will receive additional incentive assistance this summer, when families with children under the age of 18 will receive direct payments for six months through the revised children’s tax credit. From July to December, families with children under 6 will receive $ 300 a month, and those with children between 6 and 17 will receive $ 250 per child.
“Many people will be surprised when the first inspection enters,” Nasif said. “This will obviously add to the growing popularity of checks.”
Rebound fueled by vaccination
At the same time, the economy is expected to recover this year thanks to rising levels of vaccination against COVID-19 and as countries begin to reopen. JPMorgan Chase CEO Jamie Dimon predicts in his annual letter to shareholders this week that there will be an economic boom.
“[W]with excess savings, new incentives for savings, huge deficit costs, etc. [quantitative easing by the Federal Reserve], a new potential bill on infrastructure, a successful vaccine and euphoria around the end of the pandemic, the US economy is likely to thrive. This boom could easily reach 2023, as all costs could be extended to 2023, “Dimon wrote in a letter published on Wednesday.
This could reduce the government’s justification for offering more direct assistance, especially if the unemployment rate recovers and more workers step out.
By the end of the year, the country’s unemployment rate could fall to 4.3%, according to Oxford Economics. However, the road to recovery “remains a long one” as there are still 4 million workers outside the workforce, Oxford Economics economists Oren Klachkin and Gregory Dako said in a research note.
“From now on, the labor market is ready for an impressive run, as the expansion of vaccine distribution, more openings and fiscal incentives stimulate employment growth,” they predict.