Hopes are dampened for another round of stimulus checks in 2020
Hopes are dampened for another round of stimulus checks in 2020

Hopes are dampened for another round of stimulus checks in 2020

The time is running out for the US government to approve another corona aid package. So where does that leave Americans excited and waiting for another federal stimulus check – the cash payments that were handed out earlier this year? As lawmakers are negotiating a scaled-down deal, the popular stimulus checks are unlikely to be part of another round of assistance.

Legislators could still pass a stimulus bill before the Senate postpones its holiday on Dec. 18, but even the most generous of the two proposals under consideration would fall far short of the $ 2.2 trillion law Coronavirus Aid, Relief and Economic Security (CARES), which was signed into law in March and gave $ 1,200 checks to most Americans.

Even with some form of financial stimulus by the end of the year, experts say those $ 1,200 checks are unlikely to recur – at least until after a new congressional session begins in early January. The two new stimulus proposals – one from a two-part group of lawmakers and a less generous plan by Senate Majority Leader Mitch McConnell – do not include funding for more direct payments to Americans, even though they would provide money for unemployment benefits and other support.

Based on ongoing negotiations, Wall Street analysts say they believe there is a greater likelihood of a deal this month, with Heights Securities now fixing its chance at 75%, up from 50% before this latest round of negotiations. But their analysis finds it “unlikely” that $ 1,200 checks will be included in the next package.

Instead, the next round will probably focus on extending the unemployment benefits, which otherwise expire per 12 million unemployed workers on Dec. 26 and on providing assistance to companies through the Paycheck Protection Program, Heights Securities said.

Some lawmakers are calling for the inclusion of another round of $ 1,200 checks, such as Sen. Bernie Sanders of Vermont, an independent. Sanders said he would not support the stimulus package unless it was “significantly improved.”

The bipartisan proposal should “provide at least a direct payment of $ 1,200 to working-class Americans and $ 500 to their children,” Sanders said on December 4. “Tivis of millions of Americans living in desperation today would certainly not receive financial help from this proposal.”

Duel plans

The first plan comes from a two-part group of lawmakers proposing more than $ 900 billion in stimulus spending. Democratic Sen. Joe Manchin of West Virginia tweeted last week that the group would allocate $ 288 billion to refresh the Paycheck Protection Program for small businesses and $ 180 billion in unemployment benefits. However, the bill does not include funding for another round of stimulus checks.

Late. Dick Durbin of Illinois, the second-ranked Democrat, suggested that excluding checks while ensuring the inclusion of small business aid and rent support was the only way to reach agreement with Republicans, who set firm limits on the bill’s final price tag.

“The $ 1,200 check it cost, we think, nationally $ 300 billion to give you an idea,” he said. “The Democrats have always wanted a larger number, but we were told we could not get anything through the Republicans except this $ 900 billion level.”

The second plan comes from Senate Majority Leader Mitch McConnell, who last week said there was “no reason” why another stimulus package should not be adopted.

Last Tuesday, McConnell unveiled a proposal for a “targeted relief package” that is far less comprehensive than the two-pronged efforts of Manchin and other lawmakers. That would lead to about $ 330 billion for a one-month extension of two December 26 unemployment programs, the Pandemic Unemployment Assistance and Pandemic Emergency Employment Compensation programs, as well as assistance with the Paycheck Protection Program.

McConnell’s proposal would also provide limitations of liability for coronavirus-related lawsuits against companies. But that also does not include another round of $ 1,200 checks. McConnell said he believes his proposal has the best chance of getting President Donald Trump’s signature, adding, “We just do not have time to waste time.”

Speaker Nancy Pelosi told reporters at her weekly news conference on December 4 that she would like to attach new legislation on emergency aid for coronavirus to a state funding omnibus, which is due to pass within the next week. She and Senate Minority Leader Chuck Schumer have expressed support for the $ 900 billion two-party proposal.

Keep your distance on key issues

It has Democrats and Republicans kept far apart on several key issues, such as providing hundreds of billions in funding to states and cities that have been hit by declining tax revenues in the middle of coronavirus pandemic and faces the harsh prospect of mass layoffs of local government workers.

“A sentiment that seems to have grown over the weekend as new signs of negotiations between two parties emerged among private senators,” Height Securities analysts wrote in a recent report. “We warn that there is no expectation of a vote on this bill, but it is a sign that senators are at least trying to see what is possible.”

Even if Congress passes an aid law that includes stimulus check financing, it could take weeks for the IRS to deposit the funds electronically into people’s bank accounts, much less send millions of paper checks. It took between one and three months for most Americans to get their so-called Economic Impact Payment after the bill was signed into law this spring.


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Without a new stimulus bill by the end of the year, many households and businesses would be stuck with it millions set to lose their unemployment benefits at the end of the year and nationwide eviction moratoriums that lapse in the new year. The number of Americans applying for unemployment benefits rose for the second week in a row in November, a sign that the economic recovery is picking up.

Millions of Americans are “heading for a gloomy winter as safety nets expire,” Nancy Vanden Houten, chief economist at Oxford Economics, said in a report. “We are pessimistic about the prospect of any significant fiscal easing in the short term and fear that several social safety net programs may be allowed to expire, affecting millions of households across the country.”

Instead of trying to break the months-long stalemate for stimulus funding, experts believe Congress is more likely to focus on passing legislation to fund the federal government after Dec. 11, preventing a government shutdown.

Deutsche Bank economists Peter Hooper and Matthew Luzzetti believe Congress can exhaust a slimmed-down stimulus package early next year. Janet YellenPresident-elect Joe Biden’s election as finance minister would likely push for a quick bill, economists told investors when news of her pending nomination first circulated.

Still, Yellen would not take on the role until the Biden administration is announced on January 20, and will also require approval from a politically divided Senate.

And a spokesman for President-elect Joe Biden’s transition team pushed back on a report that Mr Biden would support a bill on emergency relief, even if it meant cutting back on some of the Democrats’ priorities, such as helping local governments, congressional news source Bakken reported on 23 November. “The elected president fully supports the president and the leader in their negotiations,” transitional spokesman Andrew Bates said in a statement.

What holds back a bill?

The House Democrats had passed an updated law on health and economic recovery omnibus and emergency solutions (HEROES) on Oct. 1, but the $ 2.2 trillion bill met with opposition from Republican lawmakers, which has continued into December.

Among the biggest disagreements: Whether the federal government should help money-poor cities and states cope with the massive economic blow caused by the pandemic. The crisis could cause a $ 434 billion federal budget deficit through 2022 under the most severe scenario, which would include a resurgence of the virus and a lack of more stimulus assistance, according to Moody’s Analytics.


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The HEROES Act would have provided more than $ 400 billion in funding to state and local governments, but Republicans accepted that help, including President Donald Trump, who has protested what he called “rescue operations” for states ruled by Democrats. But the fact is, many states and cities with Republican rule are also facing budget deficits, including Ohio and Texas, where the latter are staring into a $ 4.6 billion budget hole.

Democrats and Republicans also remain far apart on the issue of unemployment benefits, with Democrats pushing for a renewal of the extra $ 600 in weekly wages provided for in the CARES Act. Republicans have argued that rising unemployment benefits are too generous and discourage people from returning to work, despite a lack of financial data which supports the claim.

The edge of a cliff

More certain is that millions of households are facing deeper economic problems, which are likely to worsen only when the support and protection from the CARES law expires at the end of the year.

About 6.7 million people could be thrown out in the coming months, as a federal moratorium on moratorium ends Dec. 31, according to a report from the National Low Income Housing Coalition and the University of Arizona. It would approach the number of people who lost their homes to forced auction during the financial crisis of 2008 and the subsequent recession.


Survey: 12 Million Americans Will Lose Unemployment Benefit After Christmas

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And nearly 12 million unemployed workers are expected to be cut off from unemployment benefits the day after Christmas, according to an analysis by The Century Foundation, a progressive think tank. That cut would reduce total household income by about $ 19 billion a month, Oxford Economics said, potentially dragging down total consumer spending as the economy slows.

More than 125 economists signed one last month open letter urges lawmakers to earmark money for stimulus checks.

“Repeated direct payments will help families meet basic needs, boost state and local economies and accelerate recovery,” they wrote in letter. “Cash reaches millions who are struggling financially, including those who are not eligible for unemployment benefits.”

—With reporting from The Associated Press.


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