(CBS Detroit) — Is it too early to talk about a third stimulus control? The second payment is making its way into bank accounts, as part of a stimulus package that many experts believe is inadequate. A runoff in the Senate that will determine the fate of President-elect Joe Biden’s first term is set in Georgia. And COVID-19 remains largely unchecked as the country exits the holiday season and enters the dead of winter. All these events have consequences for the future economy.
So no, it’s not too early at all to start talking about a possible third stimulus control.
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The first round of stimulus payments went out to millions of Americans in the spring. At the time, the economy shrank rapidly under the weight of a massive slowdown caused by the COVID-19 pandemic. Shops and restaurants in many parts of the country had to remain closed. Unemployment soared, with widespread uncertainty about the virus and how it would affect people and businesses.
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Since then, the virus has been better understood and two apparently effective vaccines are in the early stages of distribution. The economy has also recovered somewhat. Many of the shops and restaurants that were initially supposed to close have long since reopened with restrictions. But unemployment remains nearly double its pre-pandemic levels. And millions of Americans continue to struggle with paying rent and other bills and buying food.
A much-discussed second stimulus package was passed by Congress and signed by President Trump over the holiday season. The $900 billion in economic aid includes extensions of Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC). PUA helps unemployed freelancers and gig workers. PEUC adds 13 weeks of unemployment benefits to the number of weeks a given state offers (usually around 26 weeks). The second package also includes another round of incentive payments (for $600, instead of $1,200). Those have already arrived in people’s bank accounts and will continue to appear until January 15th.
Many economists argue that this stimulus package will not be enough to prop up a fragile economy or put the money in the hands of the right people. The effects will be better understood in the coming weeks and months. This also applies to the need for a possible third stimulus round.
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It is already clear that the House and President-elect Joe Biden support putting more money into the hands of Americans. In May, the House passed the $3 trillion HEROES Act, which the Senate did not vote on. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin negotiated a stimulus package close to $2 trillion ahead of the election. And the House recently passed a bill to increase the amount of the second stimulus payment from $600 to $2,000, but the Senate didn’t pass the measure.
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Biden referred to the latest stimulus as a “deposit” for tackling the pandemic. In those same comments to reporters, the president-elect highlighted what he plans to ask Congress in terms of additional COVID aid once he becomes president. The list includes more money for testing and vaccinations, aid to cities and states and another round of stimulus checks. The actual amount of a possible third payment has yet to be determined.
So are Americans getting a third stimulus check? It may very well depend on January’s second round in Georgia, where control of the Senate is at stake. Republicans currently hold 50 seats ahead of the Democrats’ 48 (actually 46, but the two independents usually vote with the Democrats). In the November election, none of the candidates got the 50 percent of the vote needed to win in the state. That forced a runoff election, pitting incumbent Republican David Perdue against Democrat Jon Ossoff, and Republican Kelly Loeffler against Democrat Reverend Raphael Warnock. Polls show two exciting races.
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If Ossoff and Warnock win, the Senate would be split 50-50. Vice President-elect Kamala Harris would cast the casting vote for all bands. An effective Democratic majority increases the likelihood of a new round of stimulus. Democrats are already in favor of giving more money to Americans. And two more votes in the Senate, plus the tiebreaker, would give them enough to defeat the fiscally conservative Republicans who effectively blocked a second stimulus package for much of 2020.
A third stimulus check is still far from assured. The vote in Georgia ends Tuesday night and the next president will take office in two weeks. Never mind that centrist Democrats could theoretically vote against another round of stimulus, should the political wind be favorable. But a Senate majority, to go along with the House majority, would help Biden achieve his legislative priorities.
The country remains at the mercy of the corona pandemic. Domestic cases are approaching 21 million, while deaths recently surpassed 350,000. The number of infections is rising in many parts of the country.
Two vaccines, each about 95 percent effective after two doses, have been approved for use. But they don’t reach the Americans as promised. The Trump administration promised to vaccinate 20 million people by the end of December. Of the 14 million doses shipped, only about three million people received them.
Even as the pace of vaccination picks up, it will still be months before the country achieves 70 percent herd immunity. dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, recently suggested the country has the capacity to vaccinate one million people a day. At that rate, it would be another eight months or so before 70 percent of the population would receive one dose (not the required two doses).
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The economy cannot return to normal until consumers feel comfortable in public. And that day will likely be long after the second stimulus package — and possibly a third — runs its course.