The IRS issued more than 169 million payments in the third round of direct stimulus support, with the $ 1,400 checks reaching most U.S. households. But some advocates and lawmakers are pushing for a fourth round of stimulus aid that will effectively send recurring payments until the pandemic ends.
So far, the federal response to the economic crisis has been caused by coronavirus pandemic has paid $ 3,200 to eligible adults: $ 1,200 under the Coronavirus Aid Relief and Economic Security Act of March 2020 $ 600 in an emergency measure in December; and $ 1,400 under the U.S. rescue plan, signed in March by President Joe Biden.
Despite financial aid, millions of Americans remain in financial distress and the proliferation of the Omicron variant is. More than a quarter of Americans struggled to pay their household expenses in the previous week, according to new data from a Census survey that asked people during the first two weeks of December.
Unemployment is 4.2%, still higher than its pre-pandemic level of 3.5%. And while companies are hiring, there are still about 2.3 million fewer people on the payroll today than before the pandemic. Economists are signaling alarm over the proliferation of the Omicron variant, which has events including Broadway shows.and led to the cancellation of high-profile
The rise in COVID-19 cases “hits demand in the leisure, entertainment, travel and restaurant industries, as indicated by high-frequency data,” said David Kelly, global chief strategist at JPMorgan Funds in a January 3, research note. “It will also lead to widespread absenteeism in early 2022, which will give a significant pull on the economy in the first quarter after a very strong fourth quarter.
At the same time, financial support for more than 30 million U.S. families ended last month, with the final payment from Child Tax Credit landing in bank accounts on December 15th. These checks – which gave up to $ 300 per. eligible child – will not continue in 2022 as the Build Back Better Act, which included a one-year extension of the program, failed tofrom Senator Joe Manchin, a West Virginia Democrat.
For many people, in short, stimulus assistance is long gone, a problem that is on Change.org petition started last year, urging lawmakers to pass legislation for recurring $ 2,000 monthly payments.which continues to struggle with unemployment and a weak labor market. In fact, nearly 3 million people have signed one
Some advocates are urging lawmakers to promote new stimulus efforts, including especially for a group that has been hit hard by rising inflation in the midst of the pandemic. In December, more than 95,000 people signed a petition from the Senior Citizens League, an advocacy group for older Americans, to give seniors a one-time check for $ 1,400.
Rising inflation in 2021 far exceeded the 1.3% benefit increase that social security recipients received at the beginning of that year. But even with the 5.9% increase in the cost of living that goes inmany seniors will still fall behind inflation, which jumped
“It would help people buy an extra week of groceries in a few months,” said Mary Johnson, Social Security and Medicare policy analyst at Senior Citizens League. “A stimulus payment would help them deal with these higher rising costs.”
Some lawmakers have embraced the idea of recurring payments. Twenty-one senators – all Democrats – signed a letter on March 30th Biden in support of recurring stimulus payments, pointing out at the time that the $ 1,400 payments that were being distributed by the IRS would not make people run over for long.
“Nearly 6 out of 10 people say the $ 1,400 payments to be included in the rescue package will last them less than three months,” the senators wrote in the letter.
Meanwhile, some states Golden State Stimulus“Check through a new effort from Governor Gavin Newsom. This effort will provide $ 600 to low- and middle-income residents who have filed their tax returns for 2020. Florida and parts of Texas have approved teacher bonuses to help offset the impact of pandemic.. About two-thirds of California residents are likely to qualify for a “
The letter from the US senators does not specify how large the recurring payments they are seeking. A separate effort from Democratic lawmakers in January 2021for $ 2,000 monthly checks until the pandemic ends. Instead, the U.S. rescue plan approved one-time payments of up to $ 1,400 for each eligible adult and dependent.
Child tax deduction: End of December
Some families received another form of stimulus support when the IRS in Julyinto bank accounts with parents who are eligible for Child Tax Credit (CTC). Families received an average of $ 423 in their first CTC payment, according to an analysis of Census data from the left-wing advocacy group Economic Security Project.
Eligible families received up to $ 1,800 in cash through December, with the money distributed in equal installments over the six months from July to December. The aid was due to the expanded CTC, which is part of President Joe Biden’s US rescue plan.
Eligible families received $ 300 per month for each child under 6 and $ 250 for children between 6 and 17 years old. Several families theresaid the extra money would go to child care, back-to-school supplies and other essentials.
While progressives and some Democrats have urged lawmakers to continue the improved CTC, it appears to be stalling at the moment. This means that families will not receive a CTC payment in January or later.
Emergency funds, savings
So far, people who have received the three rounds of stimulus payments have said they use most of the funds to repay debt or withdraw the money away in savings, according to a recent analysis from the Federal Reserve Bank of New York. It could indicate that people are using the money to reduce the debt they incurred during the pandemic, as well as to build up an emergency fund in the event of another shock.
Millions of Americans were spared distress because of the three rounds of stimulus payments, researchers have found.
But when the stimulus is lame, such as last fall, when Congress was stuck with yet another round of aid, congestion increased “significantly” in November and December, according to a May analysis of census data from the University of Michigan.
The reduction in CTC could provide more headwinds for families and the economy, Kelly noted from JPMorgan Funds.
“The IRS reports that these payments totaled about $ 15 billion a month, and that their sudden cessation could limit the recent booming consumption of food and other household items,” Kelly noted.
Still delivering payslip to payslip
While the stimulus checks and now-expired child tax deductions provided direct assistance to families, “most federal aid programs miss the target and reach only a fraction of the intended recipients,” noted Greg Nasif, political director of Humanity Forward.
He added: “They hardly worked, even before the pandemic, and they leave parents with a full-time job navigating bureaucratic obstacles.” In his view, “fast, efficient, direct cash support” is the best way to help struggling families.
Many people never applied for unemployment benefits because they did not think they were eligible, while others may have given up due to long waits and other problems.
Even those who were eligible for help did not always receive it. Only 4 out of 10 unemployed workers actually received unemployment benefits, according to a March survey from economist Eliza Forsythe.
How likely is a fourth stimulus check?
Do not hold your breath, according to Wall Street analysts.
First, the Biden administration has focused on infrastructure spending to boost economic growth, and has focused on investing in roads, trains and other direct investment to help get people back to work and spur the ongoing recovery.
Second, economists have pointed fingers at emergency relief efforts, such as the three rounds of stimulus checks to contribute to inflation. Because Americans had cash in their pockets, they increased spending on goods such as furniture, cars, and electronics. Combine that withand the result was sharply higher inflation, according to economists.
Without new stimulus efforts on the horizon, inflation is likely to decline in 2022, according to Brad McMillan, Chief Investment Officer at the Commonwealth Financial Network. “One cause of inflation has been an explosion of demand driven by the federal stimulus,” he noted in a December report. “But that stimulus is now complete.”
He added: “Yes, we will continue to face inflation and supply problems, but they are moderating and will continue to do so.”