Will the $1,400 payment survive US bailout negotiations? – CBS Boston – Community News
Stimulus Check

Will the $1,400 payment survive US bailout negotiations? – CBS Boston

(CBS Detroit) — A third stimulus check may not come soon enough for some people. The pandemic rages on, leaving a trail of suffering and economic destruction. COVID case numbers continue to rise; unemployment remains historically high. More aid has been promised, in the form of a $1.9 trillion economic emergency package known as the American Rescue Plan. It would include a $1,400 incentive payment, higher unemployment insurance, an expanded child tax credit, and much more if passed in its proposed form. But that’s a big if. What is included in the aid package and how quickly can help reach people in need?

The US rescue plan aims to halt the worsening COVID-19 pandemic and support the economy it continues to devastate. The plan has three main thrusts: $400 billion to halt the advance of COVID and improve the country’s vaccination capacity; $1 trillion to financially support struggling families and $440 billion to help communities and small businesses. The proposal, in its current form, faces a potentially difficult path to become law.

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Economic aid accounts for just over half the cost of the Plan. And that help can take many forms. Topping the list is another round of stimulus checks, amounting to $1,400 (or $2,000, when added to the $600 payments going out at the start of the year). These direct payments enjoy broad support across party lines and look likely to materialize. It’s really more a matter of how and when.

But many Republicans continue to oppose the $1.9 trillion price tag attached to the last general stimulus bill that includes that third check. Without the support of 10 Republicans in the Senate, there will not be enough votes to overcome a filibuster. Democrats would have to resort to budget tuning, which would extend the process but lower the voting threshold to 51. Another option, at least in theory, is to split the stimulus checks into their own bill.

The Biden administration wants to approve the next stimulus package before the current one expires on March 14. Chuck Schumer, the Senate majority leader from New York, is also aiming for mid-March. Experts believe that the end of March is probably a more realistic timeline. Given recent experience, payments would start a week or two later. But with tax season in full swing at that time, the IRS could face further delays.

A group of more left-wing Democrats want to go a step further. Representative Ilhan Omar of Minnesota and at least 50 other members of the House, including Representatives Alexandria Ocasio-Cortez of New York and Rashida Tlaib of Michigan, are calling for monthly payments of $2,000 until the end of the pandemic. The request to consider recurring payments came in a letter to President Joe Biden and Vice President Kamala Harris.

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According to the letter, “we are experiencing the worst economic crisis since the Great Depression, with millions of Americans either out of work, forced out of the workforce, or facing a drop in hours and wages. Worsening systemic inequalities, such as food insecurity and housing instability, are most severe for black, brown and Indigenous communities, which face higher infection and death rates from COVID-19 and higher unemployment levels, compared to white Americans. At the same time, many people of color face reduced or stagnant incomes as frontline workers, while lacking access to essential emergency programs, such as unemployment insurance.”

“Recurring direct payments until the economy recovers will ensure that people can meet their basic needs, provide racially just solutions and shorten the duration of the recession,” the letter continues. “An extra check is not enough during this public health and economic crisis. Many families cannot afford to wait eight months between payments.”

In addition to stimulus measures and the possibility of monthly allowances, economic relief could increase the flow of money to households in other ways. The US bailout is calling for the $300 weekly federal unemployment benefit provided by the recent $900 billion stimulus package to be increased to $400 and extended until September. Those whose benefits have expired, as well as those who are not normally eligible for benefits (i.e. freelancers and gig workers) would also be covered.

Another possible avenue for exemption is an extension of the child tax credit from $2,000 to $3,000 or $3,600, depending on the child’s age and family income. Payments would be made monthly to eligible parents rather than through annual tax refunds. The IRS would pay out $300 a month for every child up to five years old and $250 a month for every child aged six to 17. The full amount would be available regardless of a family’s tax liabilities.

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Low-income workers who remain in service and those lucky enough to find a job can receive higher salaries. The third stimulus package also proposes raising the national minimum wage to $15 an hour and removing the exemption for tipped workers. The minimum wage has stood at $7.25 an hour since 2009, although 20 states have recently raised theirs, and four more are slated to do so this year. According to the U.S. Department of Labor, nearly 1.6 million workers received minimum wages or less in 2019, according to the U.S. Department of Labor.

Repurposing wallets could help the economy, especially after recent news that it shrank by 3.5 percent in 2020. That was the biggest drop in one year since the end of World War II. Consumer spending, which makes up 70 percent of the economy, fell dramatically in the fourth quarter. Unemployment rates remain at an all-time high, with 847,000 applying for benefits for the first time last week. That’s three to four times more than a normal week in the two years leading up to the pandemic. The Pandemic Unemployment Assistance program received an additional 426,000 applications. At the beginning of this month, about 18 million people received some sort of unemployment benefit.

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An economic recovery depends on the widespread distribution of a vaccine. But attempts to vaccinate the public have been in fits and starts. Widespread shortages have forced some cities, such as New York, to temporarily close vaccination centers and cancel appointments last week. Mass vaccination sites are still opening across the country, but progress is slow. Los Angeles residents have reported wait times of three to four hours at Dodger Stadium. Fenway Park in Boston is slated to open Monday as a vaccination site, although it will only be able to administer 500 doses to begin with. Meanwhile, domestic COVID cases are approaching 26 million, with deaths exceeding 430,000.