While the U.S. economy is still hurting from shutdowns forced by the coronavirus pandemic, most states have already started allowing businesses to reopen. Because of this move, many are hoping there will be a second economic impact payment following the first stimulus check sent out in mid-April. Congress and the White House have still not uet signed new legislation including a second check, but it is on the table.
The first stimulus check was sent to Americans in mid-April after Congress and the Trump Administration passed the $2.2 trillion CARES Act, which was one of four stimulus packages passed to help sector of the economy weather the virus, in late March. The one-time payment included $1,200 per American taxpayer with an adjusted gross income of $75,000 or less and filed federal taxes for 2018 or 2019. Couples who filed jointly were eligible for double that and dependents under 17 received an additional $500. The IRS has said payments have already been sent to all eligible Americans, totaling around $267 billion, reports The Hill.
The American economy did see some good news earlier this month when the Bureau of Labor Statistics reported that 2.5 million jobs were added in May and the unemployment rate went down to 13.3 percent. However, that is still a huge jump up from the March unemployment rate, which was 4.4 percent. With so many unemployed and needing to make ends meet, there is a push in Washington to get second stimulus checks out, but that might not happen until late July. Here's what we know about the possible payment.
There is still no timeline set in stone for another stimulus check. In May, Senate Majority Leader Mitch McConnell said Congress would decide in about "a month" if there would be a second round, while White House officials thought they could work on their own proposal in July, reports the Wall Street Journal. However, seeing as it is already the middle of June, it does not look like Congress can get serious work on another stimulus package until late July. Congress has a scheduled two-week break from July 3 to July 17. McConnell has said in the past that the White House and Congressional Republicans would be on the same page when it comes to a proposal.prevnext
Washington is divided on the necessity of a second payment
There is still a debate on even if there is a need for a second payment. For a while, Republicans wanted to see how the CARES Act would play out. The May report on the unemployment rate going down led to questions about its necessity. Even in the White House, there is a split on a second payment. Treasury Secretary Steven Mnuchin told the Wall Street Journal that a second payment is "something that we're very seriously considering." He also told the Senate he supports another direct payment, notes CNET.
After the jobs report, White House adviser Stephen Moore told the Washington Post he saw "no reason to have a major spending bill" after seeing the May jobs report. "The sense of urgent crisis is very greatly dissipated by the report," Moore said. Others have cautioned putting too much faith in the job report to prove Americans do not need another payment. Plus there is no way to tell how another spike in coronavirus infections could impact the economy.prevnext
House Democrats already passed a bill with a second payment
In May, House Democrats passed the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The package included another $1,200 payment and up to $6,000 for qualifying households. The bill also extended the $600 per week federal unemployment benefits through January 2021. The bill was quickly dismissed by Republicans and is not going to be taken up in the Senate.prevnext
The $600 weekly unemployment benefit is ending soon
Larry Kudlow, the National Economic Council Director, told CNN's State of the Union on June 14 that the federal weekly unemployment benefits of $600 per week will end in late July. "I mean, we're paying people not to work. It's better than their salaries would get," Kudlow said. "That might have worked for the first couple of months. It'll end in late July." Kudlow said "almost all businesses" think the $600 was a "disincentive" and President Donald Trump's administration is looking for an incentive for returning to work that will be less substantial. The HEROES Act would extend this benefit to January 2021, but the Senate has not voted on extending it.prevnext
How much could you get?
Another variable for a second stimulus payment is how much money it will include. The HEROES Act included a one-time $1,200 payment, dropping proposals to send $2,000 to eligible Americans monthly. Sen. Kamala Harris of California has suggested the $2,000 monthly payment through January 2021 would be a much greater help than another single check for $1,200. However, the bigger issue might just be how big the next stimulus package is. Trump has repeatedly voiced support for a second payment, and White House adviser Peter Navarro said Trump was looking at a stimulus package reaching $2 trillion.prevnext
Trump is still pushing the payroll tax cut idea
Trump still supports the idea of a payroll tax cut for businesses, where they would have to contribute less to government programs like Social Security and Medicare. Vice President Mike Pence echoed Trump's support recently on CNBC. Some experts are not enthused by the idea though, as it would mean less money going to Social Security. "It’s not targeted particularly well to those who need it the most," Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, told CNBC.prev