The IRS has issued 156 million payments in the third round of direct stimulus assistance, with 25 million people queuing this week to receive $ 1,400 checks. But some 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 byhas provided $ 3,200 to each qualified adult: $ 1,200 through the Coronavirus Aid Relief and Economic Security Act of March 2020; $ 600 in an emergency response in December; and $ 1
Despite financial aid, millions of Americans remain in financial distress, with about 4 in 10 people saying their income remains below its pre-pandemic level, according to a recent study by finance firm TransUnion. Unemployment has continued to rise, especially in low-wage industries such as food services and hospitality, where demand is still lagging behind rising coronavirus rates.
For many people, in short, the latest round of $ 1,400 checks may not last long – a problem that is onwhich continues to struggle with unemployment and a weak labor market.
Twenty-one senators – all Democrats – signed a letter dated March 30 to Mr. Biden in support of recurring stimulus payments and pointed out that the $ 1,400 payment distributed by the IRS will not tip people off for long.
“Nearly 6 out of 10 people say the $ 1,400 payments included in the rescue package will last less than three months,” the senators wrote in the letter.
While the letter does not specify how much payments the senators are seeking, a separate effort from Democratic lawmakers in Januaryfor $ 2,000 monthly checks until the pandemic ends. Instead, the U.S. rescue plan approved $ 1,400 for every eligible adult and addict.
Still living payslip to payslip
Some top economists have called for more direct help to Americans. More than 150 economists, including former Obama administration economist Jason Furman, signed a letter last year arguing for “recurring direct stimulus payments that last until the economy recovers.”
Although the economy is improving, including one, millions of people continue to suffer from reduced incomes and have been unable to take advantage of public support programs, said Greg Nasif, political director of Humanity Forward, a nonprofit that pushes for recurring stimulus payments. Only 4 out of 10 unemployed workers actually received unemployment benefits, according to a March study by economist Eliza Forsythe.
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.
“You will see reports of how the economy is starting to grow, but there are many Americans who live paycheck for paycheck, and for many of them, government emergency programs have not been able to help,” Nasif said.
How likely is a fourth stimulus control?
Don’t hold your breath, according to Wall Street analysts. “I think that’s unlikely at this point,” Raymond James analyst Ed Mills told CNBC. One of the reasons is that the Biden administration is focused on promoting its, which would reshape the economy by rebuilding aging schools, roads and airports as well as investing in projects ranging from affordable housing to broadband.
The proposal, which the White House says would be funded by raising the corporate tax rate from 21% to 28%, could be “harder to transfer” than the relief that delivered $ 1,400 checks to most Americans due to opposition from both Republicans some Democrats, Stifels chief Washington policy strategist Brian Gardner noted last month.
Many households will receive some form of extra incentive assistance this summer when families with children under the age of 18 receive direct payments for six months through the revised tax deduction for children. From July to December, families with children under the age of 6 receive $ 300 per person. Month, and those with children between 6 and 17 years receive $ 250 per month. Month per Child.
“A lot of people get surprised when the first check comes in,” Nasif said. “It will obviously add an increase in the popularity of the controls.”
At the same time, the economy is expected to recover this year thanks to rising COVID-19 vaccination rates, and as states begin to reopen. JPMorgan Chase CEO Jamie Dimon predicted in his annual letter to shareholders this week that an economic boom.
“[W]with excess savings, new stimulus savings, huge deficit spending, more [quantitative easing by the Federal Reserve], a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the US economy is likely to boom. This boom could easily run into 2023 because all spending could extend well into 2023, ”Dimon wrote in the letter released on Wednesday.
This may lessen the rationale for the government offering more direct assistance, especially if the vacancy rate recovers and more workers come out of the sidelines.
By the end of the year, the country’s unemployment rate could fall to 4.3%, according to Oxford Economics. Still, the road to recovery is “long” as there are still 4 million workers outside the workforce, Oxford Economics economists Oren Klachkin and Gregory Daco noted in a research note.
“Looking ahead, the labor market is ready for an impressive race, as expanded vaccine distribution, more reopening and fiscal stimulus create an increase in employment,” they predict.