The IRS issued more than 169 million payments in the third round of direct stimulus assistance, with checks for $1,400 reaching most U.S. households. But some advocates and lawmakers are pushing for a fourth round of stimulus aid that would effectively send recurring payments until the pandemic ends.
So far, the federal response to the economic crisis caused by the coronavirus pandemic has paid $3,200 to eligible adults: $1,200 under the Coronavirus Aid Relief and Economic Security Act in March 2020 $600 in a measure of December relief; and $1,400 as part of the US bailout, signed in March by President Joe Biden.
Despite this financial assistance, millions of Americans remain financially distressed and the spread of the Omicron variant is. More than a quarter of Americans struggled to pay household expenses in the past week, according to new data from a census survey that polled people in the first two weeks of December.
The unemployment rate stands at 4.2%, still above 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 alarmed by the spread of the Omicron variant, which has events including Broadway shows.and caused the cancellation of high-profile events
The surge in COVID-19 cases “is hitting demand across the leisure, entertainment, travel and restaurant sectors, as indicated by high-frequency data,” said David Kelly, chief global strategist at JPMorgan. Funds in a January 3 research note. “It will also lead to widespread absenteeism at the start of 2022, applying a significant drag to the economy in the first quarter, following a very strong fourth quarter.
Meanwhile, tax support for more than 30 million American families ended last month, with final child tax credit payments landing in bank accounts on December 15. These checks – which provided 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 to complete. of Senator Joe Manchin, a Democrat from West Virginia.
For many people, in short, stimulus aid is long gone, a problem that is about Change.org Petition started last year that calls on lawmakers to pass legislation for recurring monthly payments of $2,000.who continue to struggle with unemployment and a weak labor market. Indeed, nearly 3 million people have signed a
Some supporters are urging lawmakers to press ahead with new stimulus efforts, including for one group in particular that has been hit hard by rising inflation amid the pandemic. By December, more than 95,000 people had signed a petition from the Senior Citizens League, an advocacy group for American seniors, to offer a one-time check for $1,400 to seniors.
The rise in inflation in 2021 far exceeded the 1.3% benefit increase that Social Security recipients received earlier this year. But even with the 5.9% increase in the cost of living that goes intomany seniors will lag behind inflation, which has surged
“It would help people buy an extra week of groceries for a few months,” said Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League. “A stimulus payment would help them manage these rising costs.”
Some legislators have taken up the idea of recurring payments. Twenty-one senators — all Democrats — signed a letter dated March 30 to Mr. Biden in support of recurring stimulus payments, pointing out at the time that the $1,400 payments about to be doled out by the IRS would not last long for people.
“Almost 6 in 10 people say the $1,400 payments that will be included in the bailout will last them less than three months,” the senators wrote in the letter.
Meanwhile, some states are Golden State Stimuluscheck via a new effort from Governor Gavin Newsom. This effort will provide $600 to low- and middle-income residents who have filed their 2020 taxes. Florida and parts of Texas have authorized bonuses for teachers to help offset the impact of the pandemic.. About two-thirds of California residents are likely to qualify for a “
The letter from the US senators does not specify the size of the recurring payments they are requesting. A separate effort by Democratic lawmakers in January 2021for monthly checks of $2,000 until the pandemic is over. Instead, the US bailout authorized one-time payments of up to $1,400 for each eligible adult and dependent.
Child tax credit: end of December
Some families received another form of stimulus assistance when the IRS in July 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-leaning advocacy group Economic Security Project.on the bank accounts of parents eligible for the
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 bailout.
Eligible families received $300 per month for each child under age 6 and $250 for children ages 6 to 17. Several families whosaid the extra money would go towards childcare, back-to-school supplies and other essentials.
While progressives and some Democrats have urged lawmakers to pursue the improved CTC, it appears to have stalled for now. This means that families will not receive a CTC payment in January or beyond.
Emergency funds, savings
So far, people who have received all three rounds of stimulus payments said they used most of the funds to pay down debt or save money, according to a recent analysis of the Federal Reserve Bank of New York. This 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 case another shock occurs.
Millions of Americans have been spared hardship thanks to the three rounds of stimulus payments, researchers have found.
But when the stimulus faltered, such as last fall when Congress deadlocked on another round of aid, the difficulties increased “markedly” in November and December, according to a May Analysis census data from the University of Michigan.
Cutting the CTC could create more headwinds for families and the economy, noted JPMorgan Funds’ Kelly.
“The IRS reports that these payments totaled about $15 billion per month and stopping them suddenly could reduce recently booming spending on food and other household basics,” Kelly noted.
I’m still living paycheck to paycheck
While stimulus checks and the now-expired child tax credit have provided direct assistance to families, “most federal assistance programs miss the mark and reach only a fraction of the intended recipients,” it said. noted Greg Nasif, political director of Humanity Forward.
He added: “They were barely functioning even before the pandemic and they leave parents with full-time jobs to overcome bureaucratic hurdles.” In his opinion, providing “quick, efficient and direct cash support” is the best option to help struggling families.
Many people never applied for unemployment benefits because they didn’t think they were eligible, while others may have given up due to long waits and other issues.
Even those who were entitled to help did not always receive it. Only 4 out of 10 unemployed people have actually received unemployment aid, according to a march study by economist Eliza Forsythe.
How likely is a fourth stimulus check?
Don’t hold your breath, say Wall Street analysts.
On the one hand, the Biden administration has focused on infrastructure spending to spur economic growth, betting that investing in roads, trains and other direct investments will help get people back to work and to stimulate the ongoing recovery.
Second, economists have pointed to relief efforts such as the three rounds of stimulus checks for contributing to inflation. Because Americans had cash in their pockets, they increased their spending on goods such as furniture, cars, and electronics. Combine that withand the result was significantly higher inflation, economists say.
Without further stimulus efforts on the horizon, inflation is likely to moderate in 2022, according to Brad McMillan, chief investment officer at Commonwealth Financial Network. “One of the causes of inflation was an explosion in demand driven by federal stimulus,” he noted in a December report. “But that revival is now over.”
He added: “Yes, we will continue to face inflation and supply issues, but they are moderating and will continue to do so.”