You can still get a December stimulus check; Here’s why and from whom
You can still get a December stimulus check;  Here’s why and from whom

You can still get a December stimulus check; Here’s why and from whom

[Updated Dec 8 with detail about Mayors for a Guaranteed Income and the call for a national form of universal basic income]

Some Americans may still receive a state-issued stimulus check in December, except that the amount may not be $ 1,200, and the check will most likely not be from the federal government. Instead, the checks will vary in size and come from state governments that are eager to mitigate the impending economic disaster for their citizens and that need to spend money on the use-it-or-lose Cares Act by December 30th.

Forbes advisorSecond Stimulus Check Calculator: How much will you receive and when?

The $ 908 billion federal stimulus package proposal does not include stimulus checks

The du-jour stimulus proposal was introduced by one group of centrist senators including Joe Manchin III (D-West Virginia), Mitt Romney (R-Utah) and Susan Collins (R-Maine). Most notably, the new proposal excludes a second round of stimulus checks and cuts additional federal unemployment benefits down to $ 300 a week from $ 600 in the Cares Act. In a greater concession, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer both indicated they would support the $ 908 stimulus plan as a basis for negotiations. “While making a new offer to Leader McConnell and Leader McCarthy on Monday,” the two Democratic leaders said, “in the spirit of compromise, we believe that the bipartisan framework introduced by senators yesterday should be used as a basis for immediate bipartisan negotiations on two chambers. ”

It’s still unclear whether Democrats and Republicans will agree on a stimulus plan at all before the end of the year, but if they do, it looks like the agreement will not include another stimulus check. “There may be a stimulus check, but it would be part of another piece of legislation,” Senator Bill Cassidy (R-Louisiana) said in a Fox News interview. Senator Lindsey Graham (R-South Caroline) went ahead and called stimulus check and poison pill and that including them in the stimulus package “is likely to break [bipartisan] coalition.”

The economy is weakening while coronavirus is on the rise

The lack of stimulus control and federal action more broadly comes against the backdrop of a labor market that continues to show signs of strain. Several Americans are applying for unemployment benefits, and states are implementing renewed shutdowns and restrictions due to the increase in cases of coronavirus. Last Friday, the It reported the Ministry of Labor that only 245,000 jobs were added in November, representing the fifth month in which the pace of employment had tapered. While the overall unemployment rate fell from 6.9 percent in October to 6.7 percent in November, “this figure does not fully capture the extent of unemployment because it does not include people who have dropped out of the workforce and are not actively seeking. to work. “With more federal programs soon to expire, millions could see economic lifelines disappear altogether.

States / cities step in with their own stimulus checks and help

The likelihood of another economic dive and the continued blockade at the federal level has drove the legislators forward in some states to distribute their own stimulus aid. “States like Colorado are trying to provide a bridge to help until the federal government steps in,” Colorado Gov. Jared Polis said. told Washington Post in an interview. “I do not think it is in any state’s ability to take it on their shoulders.”

State aid is driven not only by humanitarian concerns, but also by a more practical reality: While many received large grants as part of the Care Act, these funds must be used by 30 December. Any remaining funds must be returned to the Federal Government after that date.

State stimulus check

Democratic governors in Wisconsin and Minnesota both presented large-scale state stimulus packages, but have encountered opposition from GOP-led lawmakers. The proposal by Governor Tim Walz of Minnesota will include a one-time payment of $ 500 to some nationals, which mimics $ 1,200 federal stimulus check payment from the Care Act.

Colorado began to distribute $ 375 checks earlier in the week to about 435,000 residents. To be eligible, Coloradans must have received at least one weekly unemployment benefit between $ 25 and $ 500 from mid-March, when the pandemic began and ended in October.

Last week, New Mexico Governor Michelle Lujan Grisham signed into law a $ 330 million relief bill to help unemployed new Mexicans and certain businesses ravaged by the coronavirus pandemic. In particular, nearly $ 200 million of the relief package will go to sending $ 1,200 one-time stimulus checks to all types of unemployed workers in the state.

Oregon partnered with private sector banks and credit unions to implement a $ 500 one-time payment to eligible Oregonians. The $ 500 was a direct grant, not a loan and had limited eligibility. North Carolina took a different approach and paid out $ 335 stimulus checks to all households with parents of children 17 and younger to help offset distance learning costs. The state spent $ 440 million from its $ 903 million CARES Act allocation to fund the stimulus checks.

Cities have also implemented stimulus programs

Some cities and counties have too implemented their own stimulus programs. Duval County, Florida, was one of the first to do so back in April. Jacksonville Mayor Lenny Curry announced a plan to offer $ 1,000 payments to 40,000 families on a first-come, first-served basis “to help our citizens who are suddenly unemployed or significantly underemployed as a direct result of the COVID-19 pandemic.”

Residents of Nome, Alaska had until Dec. 7 to apply for a personal stimulus check from the city. Nome awarded $ 500,000 from its Care Act grant to help residents who have been financially affected by the Covid-19 pandemic. Those approved will receive a one-time payment of $ 500 per adult and $ 100 per child.

Harris County, Texas recently began distributing one-time payments to residents, and Houston is considering spending $ 30 million in Care Act funding to pay out $ 1,200 stimulus checks to 23,750 residents. Others, such as Escambia County (Florida), Fort Worth (Texas) and Gadsen County (Florida) have used Cares Act funding to provide subsidies to residents who have experienced loss of work hours or need help with housing, supplies and food due to the pandemic.

Stimulus coincides with broader universal basic income push of cities

The recent push to pass on local stimulus is linked to broader initiatives across more than two dozen cities to provide a universal basic income (UBI) to help families cope with the coronavirus pandemic. A group, Mayors of a Guaranteed Income, has tested the effectiveness of UBI and other programs that provide no-limit, recurring monthly stimulus to families in need. Earlier this week, Jack Dorsey, CEO of Twitter and Square

SQ
, donated $ 15 million to the group’s efforts. The success of the $ 1,200 financial impact paid as part of the Cares Act in March has prompted the group to push for a national UBI, “arguing that their experiments so far have shown that direct monetary assistance to Americans can help them escape poverty while giving their local economies a much-needed boost. ” as Tony Romm of Washington Post noted.

Deadline for a looming care law

With a looming deadline for using or returning Care Act funding, several states may find that paying out stimulus checks is their best option for handing out funding. Although stimulus checks are not the most targeted use of funds, they are “delivered in a much more efficient way” said Howard Gleckmansenior fellow at the Urban-Brookings Tax Policy Center and a Forbes contributor.

Until now, many state and local authorities have struggled to get Cares Act money for residents in need. Delays are caused by political infight as well as develops Rules of the Ministry of Finance. Many people are worried about being funny because of these guidelines and being forced to repay millions of dollars. States often lack the infrastructure to quickly distribute so much money and one two-part bill who would extend the deadline for spending funds after December 30, is unlikely to see a vote.

Justice issues and increased transaction costs

The Cares Act rules and use-it-or-lose-it deadline may mean that while more states and local governments will distribute stimulus checks, they will not reach everyone in need and may require spending precious dollars on intermediaries to manage programs. .

Fast but fair?

New Mexico is a good case study. The state received $ 1.2 billion in Care Act funding back in March, but had at least $ 319 million in unused funds in November. Given that care law money required no later than December 30, state legislators met to formulate a plan for the unused funds. The $ 1,200 stimulus checks it sends will only go to 140,000 new unemployed Mexicans, excluding other residents who may also be struggling financially, including low-income workers and key workers.

One reason New Mexico may have limited payments to unemployed residents is to ensure the state stays within the Treasury Department’s guidelines for the use of Care Act funds. These guidelines included language that allowed expenditure “incurred to respond to the second-order effects of the emergency, such as by providing financial support to those suffering from employment or business interruptions due to COVID-19-related business closures.”

Lack of infrastructure means paying intermediaries

Because many states and cities lack the infrastructure to quickly implement millions of dollars, some turn to intermediaries for help. While these companies can help you manage complex applications, their services are not cheap.

Houston’s plan to spend $ 30 million in Care Act financing includes, for example, a contract with BakerRipley. The company also manages the city’s Covid-19 relief program money. If the proposal goes through, Houston would pay BakerRipley an administration fee “not exceeding 5.26% and not exceeding $ 1.5 million,” to administer the program.

The result:

Lack of action at the federal level has prompted many cities and states to pass their own stimulus programs, many of which have included a state-issued stimulus check. With a deadline of December 30 to use Care Act funding, more and more people may find that issuing stimulus checks to residents who have been adversely affected by Covid-19 is the most appropriate use of remaining funding, which also holds true. within strict guidelines of the Ministry of Finance.

“We strive to open the gates and help as many people as we can, while maintaining our trust responsibilities,” said David Marquez, Head of the Economic Development Department at Bexar County, Texas. told The Washington Post. “That’s what keeps me awake at night.”

Leave a Reply

Your email address will not be published.