(CBS Detroit) – Many are already asking about a fourth stimulus check, even though the third round of economic relief is still being distributed to eligible Americans. Last week, a total of about 130 million payments of up to $ 1,400 per person had been delivered. That adds up to about $ 335 billion of the $ 422 billion allocated to the $ 1.9 trillion U.S. rescue plan Act. Paper checks and EIP cards continue to arrive in the mail every day.
These relief payments are part of a broad effort to cushion the economic impact of COVID on households and support the economy as it recovers from the pandemic. The stimulus package also expands unemployment benefits, strengthens the child tax credit 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 last effort, in addition to the previous ones, will still not be enough.
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Who supports a fourth stimulus check?
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 requesting “recurring direct payments and automatic extensions of the ‘unemployment insurance linked to economic conditions’.
As the senators reasoned 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 a constantly changing legislative calendar and ad hoc solutions ”.
A previous letter to President Biden and Vice President Kamala Harris of 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 reduce the duration of the recession.”
Most Americans also favor recurring aid. According to a January poll by Data For Progress, nearly two-thirds of all voters support $ 2,000 a month 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 experts in the field argued that “direct cash payments are an essential tool that will increase economic security, boost consumer spending, accelerate recovery and promote certainty at all levels of government and the economy, for the time necessary. ”
Why a fourth stimulus control is unlikely
All of this voice support keeps alive the possibility of another round of stimulus controls (or recurring stimulus controls). However, it does not make them likely. And there are several reasons why.
Vaccines are progressing very well, with three different options available to the public. The president recently stated that 90% of American adults will be eligible by mid-April. In fact, putting needles in your arms takes longer, although most states have reduced the age required to qualify. The administration is on track to meet its revised target of administering 200 million doses in its first 100 days. Americans have received more than 165 million doses, with 32% of the population receiving at least one dose and 18.5% fully vaccinated. The number of vaccines continues to increase at a rate close to three million doses per day.
With vaccines on the rise, the economy is also showing signs of recovery. Unemployment remains higher than in the non-pandemic era. 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 had about 250,000 new unemployment claims.) But the four-week average is the lowest it has been in more than a year. Consumer confidence continues to rise, reaching its highest level since the start of the pandemic. About 41% of consumers also see business conditions improving over the next six months, up more than 10% from the previous month.
Consumer spending drives 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 the hardest-hit parts of the economy to reopen safely, are sure to help. All of this additional spending, along with the release of accumulated demand, should lead to more jobs as companies hire to meet the needs of consumers. With the opening of the economy, a fourth round of stimulus controls is becoming less necessary.
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The American rescue plan law was passed along party lines. Republicans were not interested in spending about $ 1.9 trillion, although some supported the third round of stimulus checks. They described the package as a “blue state bailout”, saying it went far 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-related matters to proceed with a simple majority instead of the 60 filibuster-proof votes. Given the rules, in general, only one conciliation invoice per fiscal year can be approved. But the fiscal year ends in October. Therefore, another package of stimuli could be advanced in the autumn and, in theory, boosted with reconciliation. Otherwise, it would need at least 10 Republican votes, along with all Democratic votes.
But the Biden administration has other priorities. One of the most important is to approve the recently introduced infrastructure plan, which also faces Republican opposition. The American Jobs Plan was introduced last week. Worth $ 2 trillion, it aims to rebuild roads, repair bridges, end lead pipes, modernize the country’s electricity grid and more. It does not include another stimulus control. Republicans oppose the plan, in part because of its reliance on higher corporate taxes.
The American family plan is to be announced in a few weeks. What it will contain has not been announced, although it could cost between $ 1 and $ 2 trillion. According to the administration, the funding would come from higher taxes on rich people. Republicans are likely to oppose these tax hikes as well.
It seems inevitable that there will be a lot of negotiations and possible disagreements before either plan comes to a vote. And Biden will face an upward battle that will attract 10 votes to the Senate in both cases. As a result, Democrats may be anticipating the need for another round of reconciliation to push for signature legislation. The odds of using it to pass a fourth stimulus check are low.
What other help is coming?
While a fourth stimulus check is unlikely, more direct payments to Americans have already been subscribed to by law. The American Rescue Plan Act includes an improvement in the tax credit for minors and an expanded unemployment benefit.
According to the revised child tax credit, the Internal Revenue Service (IRS) will pay $ 3,600 annually for each child up to five years old and $ 3,000 annually for each child aged six to 17. Payments will be issued automatically from periodically From July to December 2021, with the rest issued when the recipient files their 2021 taxes. (Many expect “periodic” to mean really monthly or possibly quarterly, but the IRS has yet to determine.) benefit will not depend on the current tax burden of the recipient. In other words, families who meet the requirements will receive the full amount, regardless of how much or how little they owe in taxes. Payments will begin to be eliminated beyond the annual income of $ 75,000 for individuals and more than $ 150,000 for married couples. The most generous credit will only apply for 2021, though Democrats will likely try to expand it.
The American Rescue Plan Act also extended the weekly federal unemployment insurance bonus of $ 300 until Labor Day. Recipients with a family income of less than $ 150,000 will not be required to pay taxes on the first $ 10,200 in unemployment benefits. Those eligible for pandemic emergency unemployment compensation (PEUC), which cover people who have exhausted their state benefits, and Pandemic Unemployment Assistance (PUA), which covers self-employed and concert workers, they will also see their profits extended until early September. The PEUC runs out after 53 weeks. PUA expires after 79 weeks.
The long-term US employment plan includes some elements that are not traditionally associated with infrastructure. These range from $ 213 billion for affordable housing to $ 100 billion for labor force development among underserved groups. The plan also aims to increase the remuneration of caregivers caring for the elderly and disabled. 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 across a wide swath of the economy. The extra money in people’s pockets is still hypothetical, of course. The plan has yet to make its way to Congress.
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