(CBS Detroit) – Many are already asking for a fourth stimulus check. The latest round of economic aid has already been distributed to the most eligible Americans. As of last week, the total number reached about 130 million payments up to $ 1,400 per person. That works out to about $ 335 billion of the $ 422 billion allocated in the $ 1.9 trillion American Rescue Plan Act. Paper checks and EIP cards continue to arrive by mail every day.
These relief payments are part of a broad effort to address 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 much more. The recent round of stimulus checks follows the $ 1,200 payments at the start of the pandemic and the $ 600 payments in early January. But some politicians believe that, on top of previous efforts, this latest effort will still not be enough.
READ MORE: Restaurant reopening: where are they located and how do they recover from COVID?
Who supports a fourth incentive 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 asking for “recurring direct payments and automatic renewals of unemployment insurance related to economic conditions. “.
As the senators reasoned in their letter, “This crisis is far from over and families deserve the assurance that they can put food on the table and keep a roof over their heads. Families should not be at the mercy of constantly changing legal timelines and ad hoc solutions. “
A similar position was taken in an earlier letter to President Biden and Vice President Kamala Harris from 53 representatives, led by Ilhan Omar of Minnesota. “Recurring direct payments until the economy recovers will allow people to meet their basic needs, provide racially just solutions and shorten the duration of the recession.”
A majority of Americans are also in favor of recurring aid payments. According to a January survey by the 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. Many economists are also on board. A 2020 open letter from experts in the field stated that “cash outright payments are an essential tool that will increase economic security, boost consumer spending, accelerate recovery and promote security at all levels of government and industry. economy – as long as it takes. “
Why a fourth stimulus check is unlikely
All this expressed support keeps alive the possibility of another round of stimulus checks – or recurring stimulus checks. However, it doesn’t 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 stated that by mid-April, 90 percent of American adults are eligible. Actual needle insertion takes longer, although most states have lowered the age requirement to qualify. The administration is well on track to meet its revised goal of administering 200 million doses in the first 100 days. Americans have received more than 165 million doses, of which 32 percent of the population has received at least one dose and 18.5 percent has been fully vaccinated. The number of vaccinations continues to increase at a rate of nearly three million doses per day.
With vaccinations on the rise, 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 more than the week before. (A typical pre-pandemic week yielded about 250,000 new jobless claims.) But the four-week average is the lowest in more than a 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 improving over the next six months, more than 10 percent from the previous month.
Consumer spending powers two-thirds of the country’s economy. And the third stimulus check has increased people’s purchasing power and probably increased their optimism in the future. The ongoing vaccinations, which will eventually allow the hard-hit parts of the economy to reopen safely, will certainly help. All that extra spending, along with the release of pent-up demand, should lead to more jobs that companies hire to meet consumer needs. With the economy opening up, a fourth round of stimulus checks is less necessary.
READ MORE: Why are there no houses for sale?
The American Rescue Plan Act was passed along party lines. Republicans weren’t interested in spending anywhere near $ 1.9 trillion, although some did support the third round of stimulus checks. They called the package a “blue state bailout”, claiming it went well beyond COVID and would increase the deficit, leading to inflation.
The Democrats used a process called reconciliation to pass the bill in the Senate without Republican backing. As a result, budget-related matters can proceed with a simple majority instead of the filibuster-proof 60 votes. In view of the rules, in general only one reconciliation invoice can pass per financial year. But the fiscal year ends in October. So a different stimulus package could be put forward in the fall and, in theory, pushed through with reconciliation. Otherwise, it would take at least 10 Republican votes along with every Democratic vote.
But the Biden government has other priorities. One of the biggest is the approval of the recently introduced infrastructure plan, which is also facing Republican opposition. The American Jobs Plan was unveiled last week. Valued at $ 2 trillion, the goal is to build roads, repair bridges, get rid of lead pipes, modernize the country’s electrical grid, and much more. It does not contain any other stimulus control. Republicans partially oppose the plan because it relies on higher corporate taxes.
The American Family Plan will be announced in a few weeks. What it will include has not been announced, although it could cost another $ 1 to $ 2 trillion. According to the administration, the funding would come from higher taxes on wealthy individuals. Republicans are also likely to oppose these tax increases.
Much negotiation and possible breakdown seems inevitable before either plan comes to a vote. And Biden will face a tough fight, drawing 10 votes in the Senate in both cases. As a result, Democrats are very well anticipating the need for another round of reconciliation to push through a landmark piece of legislation. The likelihood of them using it to pass a fourth stimulus check instead is low.
What other help is coming?
While a fourth stimulus check is unlikely, more direct payments to Americans have already been enacted by law. The American Rescue Plan Act includes an improved child tax credit and comprehensive unemployment benefits.
Under the revised child tax credit, the Internal Revenue Service (IRS) pays out $ 3,600 per year for each child up to five years old and $ 3,000 per year for each child aged six through 17. Payments are automatically made periodically from July to December 2021, the remainder will be spent when the recipient submits their 2021 tax. (Many expect “periodic” to actually mean monthly or possibly quarterly, but the IRS has yet to determine that.) The benefit will not depend on the recipient’s current tax burden. In other words, eligible families receive the full amount regardless of how much – or little – they owe in taxes. Payments will gradually diminish above an annual income of $ 75,000 for individuals and more than $ 150,000 for married couples. The more generous credit will only run through 2021, although Democrats will likely try to extend it.
The American Rescue Plan Act also extended the weekly federal unemployment insurance bonus from $ 300 to Labor Day. Recipients with a household income of less than $ 150,000 are not required to pay tax on the first $ 10,200 in unemployment benefits. Those who qualify for Pandemic Emergency Unemployment Compensation (PEUC), which covers people who have used up their government benefits, and Pandemic Unemployment Assistance (PUA), which covers freelancers and handymen, their benefits will also be extended until the beginning of September. PEUC ends after 53 weeks. PUA expires after 79 weeks.
The far-reaching US jobs plan includes some elements that are traditionally unrelated to infrastructure. These range from $ 213 billion earmarked for affordable housing to $ 100 billion earmarked for workforce development among disadvantaged groups. The plan also aims to increase wages for caregivers caring for the elderly and disabled. Any of these efforts would bring in more money for those affected. On a broader scale, the plan also has the potential to create many jobs in a wide area of the economy. The extra money in the people’s pockets is, of course, still hypothetical. The plan has yet to make its way through Congress.
MORE NEWS: Third incentive check: additional benefits in the economic aid package