(CBS Detroit) – Many are already asking for a fourth stimulus test, although the third round of economic relief is still spreading among eligible Americans. As of last week, a total of about 130 million payments were made, up to $ 1,400 per person. That amounts to about $ 335 billion out of the $ 422 billion provided in the $ 1.9 trillion rescue plan law. Paper checks and EIP cards continue to arrive in the mail every day.
These relief payments are part of a broad effort to mitigate the economic impact of COVID on households and support the economy as it recovers from the pandemic. The incentive package also expands unemployment benefits, strengthens the tax credit for children and much more. The latest round of incentive checks follows the $ 1
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Who maintains the 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 extensions of unemployment benefits.”
As the senators reasoned in their letter, “this crisis is far from over and families deserve security to be able to put food on the table and keep a roof over their heads. Families must not be at the mercy of ever-changing legislative deadlines and ad hoc decisions. “
An earlier letter to President Biden and Vice President Kamala Harris of 53 representatives, led by Ilhan Omar of Minnesota, highlighted a similar position. “Recurring direct payments until the economy recovers will help people meet their basic needs, provide racially just solutions and shorten the duration of the recession.”
The majority of Americans also support periodic aid payments. According to a January poll by Data For Progress, nearly two-thirds of all voters support $ 2,000 monthly payments to all Americans for the duration of the pandemic. Supporters include a majority of independents and Republicans. There are also many economists on board. An open letter from 2020 by experts in the field states that “direct cash payments are a key tool that will increase economic security, stimulate consumer spending, accelerate recovery and promote security at all levels of government and the economy – as long as necessary. ”
Why the fourth stimulus test is unlikely
All of this strong support keeps the possibility of a new round of incentive checks – or repetitive stimulus checks – alive. However, this does not make them probable. 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 older Americans would be eligible by mid-April. In fact, putting needles in weapons takes more time, although most countries have reduced the age required to qualify. The administration is on track to achieve its revised goal of administering 200 million doses in the first 100 days. Americans have received more than 165 million doses, with 32 percent of the population receiving at least one dose and 18.5 percent being fully vaccinated. The number of vaccinations continues to increase at a rate of nearly three million doses per day.
With the steady rise in vaccinations, the economy is also showing signs of recovery. Unemployment remains higher than during non-pandemic times. Approximately 719,000 people initially applied for unemployment insurance in the last full week of March, slightly more than the previous week. (A typical pre-pandemic week reported about 250,000 new applications for unemployment.) But the average for four weeks is the lowest in recent years. Consumer confidence continues to rise, reaching its highest level since the beginning of the pandemic. Nearly 41 percent of consumers also see an improvement in business conditions over the next six months, which is more than 10 percent more than the previous month.
Consumer spending drives two-thirds of the country’s economy. And the third test of incentives has increased people’s spending capacity and is likely to increase their optimism in the future. Ongoing vaccinations, which will ultimately allow affected parts of the economy to open safely, certainly help. All of these additional costs, along with the release of retained demand, should lead to more jobs as companies hire to meet consumer needs. With the opening up of the economy, the fourth round of incentive checks becomes less necessary.
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The American law on the rescue plan passed through the party. Republicans were not interested in spending nearly $ 1.9 trillion, although some supported a third round of stimulus checks. They called the package a “rescue from a blue state”, arguing that it went beyond the scope of COVID and would 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 continue with a simple majority, rather than the 60 votes that are certain. Given the rules, usually only one conciliation bill can pass in one financial year. But the fiscal year ends in October. So another stimulus package could be introduced in the autumn and, in theory, passed in a conciliatory manner. Otherwise, at least 10 Republican votes will be needed, along with any 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 work plan was unveiled last week. At $ 2 trillion, it aims to rebuild roads, repair bridges, remove lead pipes, modernize the country’s electricity grid and much more. It does not include another stimulus check. Republicans oppose the plan in part for relying on higher corporate taxes.
The American family plan should 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, funding would come from higher taxes on rich people. Republicans are also likely to oppose this tax increase.
An abundance of negotiations and eventual separation seems inevitable before any of the plans can be voted on. And Biden will face a tough battle, attracting 10 votes in the Senate in both cases. As a result, Democrats are likely to anticipate the need for a new round of reconciliation to push through legislation. The chances of them using it to pass a fourth stimulus test instead are low.
What other help is coming?
While the fourth incentive check is unlikely, more direct payments to Americans have already been signed into law. The US rescue plan law includes an improved child tax and extended unemployment benefits.
Under the revised Child Tax Credit, the Internal Revenue Service (IRS) will pay $ 3,600 per year for each child under 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 from July to December 2021, with the remainder issued when the recipient files their taxes for 2021 (Many expect that “periodic” will actually mean monthly or possibly quarterly, but the IRS still has to determine this.) The benefit will not depend on the current tax burden of the recipient. In other words, qualifying families will receive the full amount, no matter how much – or little – they owe taxes. Payments will begin phasing out more than $ 75,000 in annual income for individuals and more than $ 150,000 for couples. The more generous credit will only be valid for 2021, although Democrats are likely to seek to extend it.
The U.S. Rescue Plan Act also extended the weekly federal unemployment insurance bonus from $ 300 until Labor Day. Recipients with household incomes below $ 150,000 will not have to pay taxes on the first $ 10,200 in unemployment benefits. Eligible for Pandemic Emergency Unemployment Compensation (PEUC), which covers people who have used their state aid, and Pandemic Unemployment Benefit (PUA), which covers the liberal professions and workers, their benefits will be extended until early September. PEUC expires after 53 weeks. PUA expires after 79 weeks.
The US job plan includes some elements that are not traditionally related to infrastructure. They range from $ 213 billion for affordable housing to $ 100 billion for workforce development among underserved groups. The plan also expects to increase the pay of caregivers who are prone to 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 wider range 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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