The IRS has sent more than $ 269 billion in coronavirus stimulus money, but this cash was just a drop in the bucket for most Americans, who are now facing a recession with the unemployment rate at record levels. Clearly more money is needed as most have already used the cash to pay for essentials or prepare for emergencies. And the good news is that it’s likely to be on the way soon.
In fact, there is a very good chance that Congress will pass a coronavirus relief bill in late July that authorizes more COVID-19 money. Here are three reasons why.
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1. Some states are slowing down their reopening process or closing businesses again
Coronavirus cases are increasing across the country, particularly in areas that were not as affected in the first wave. With the number of virus cases increasing, some hospitals are reaching capacity, and public health experts warn that things could get worse, some states that had begun the reopening process are beginning to reverse course. In fact, bars, restaurants, and / or beaches have once again been forced to close their doors in Arizona, Florida, Idaho, Texas, and a handful of other states, and could sooner do the same.
These massive closings will not only put companies at risk, but will also lead to a large number of layoffs. And that will have a ripple effect throughout the economy, reducing the demand for products and services even in companies that may remain open.
When states began to close and unemployment began to rise, the crisis prompted lawmakers to take swift action to pass the CARES Act and provide stimulus money. The same could happen again soon.
2. Almost half of the population is out of work right now, so people need help
In June 2020, the employment-population ratio was 54.6%, below a recent high of 61.2% in January 2020. This means that almost half of the non-institutional population was unemployed (data excludes to inmates, active duty military personnel and residents of long-term care facilities).
The employment-population relationship can give a clearer picture of the labor market than just unemployment figures, since it takes into account not only people who are actively looking for work, but also those who have given up finding work (which could well be higher than normal given the risks associated with work during the pandemic).
Unfortunately, the low ratio shows how far the United States is from a recovery, even when unemployment figures have been good in the past two months. In fact, it would take up to 30 million jobs for the country to return to its peak in 2000, according to the chief economist at Deutsche Bank, and only 4.8 million were added last month.
With so many people out of a job, expanding unemployment benefits would probably be a better bet than simply providing a second stimulus check. But that is more costly and unpopular with right-wing lawmakers, who believe that workers may be discouraged from returning to their jobs because of the additional $ 600 in weekly benefits that the CARES Act provides through the end of July.
Republicans who are wary of authorizing more unemployment money may feel they need to do something to help those struggling, and a second stimulus payment is an easier sale.
3. The President’s reelection campaign is in trouble
As of July 11, 55.8% of the country disapproved of President Donald Trump, compared to 40.1% who approved. Although the president’s approval rating has remained relatively stable throughout his presidency, this shows a slight recent decline.
Presumptive Democratic candidate Joe Biden has also had a consistent and substantial lead over President Trump in polls, a lead that ranges from 8.9 to 9.6 percentage points since mid-June.
This does not bode well for the President’s reelection campaign. He insisted on putting his name on the latest coronavirus stimulus payment and sent letters to remind Americans that he was the authorizer, so he will most likely see a second payment as an opportunity to win favor with a cautious public.
In fact, the president has already put forward multiple proposals for a second payment, and with his low numbers of polls, he’s likely to put increasing pressure on Republicans to make that happen.
While the odds are good, you will get more stimulus money, there is no guarantee
While there is good reason to believe that lawmakers will provide another coronavirus stimulus payment to help struggling families and shore up the economy during the 2020 recession, you cannot count on this money until the law is passed. And that’s especially true given the positive employment numbers in June may have killed some of the momentum for a second check.
Since you can’t get more cash from Uncle Sam until an invoice is approved, it would be wise to make sure you don’t need it. Unfortunately, if you don’t have a job right now, that can be difficult. You can apply for extended unemployment benefits, but these are available only until the end of July (you should still be eligible for your standard benefit, but it will be much lower). You can also seek help available under the Paycheck Protection or Financial Injury Disaster Loan Program.
For those who are still working, taking steps to prepare for a recession can help them avoid getting into a difficult financial situation if their hours are cut and no stimulus comes. Financial advisers recommend making a crisis budget and propping up your emergency fund, and both steps can leave you well prepared to deal with economic problems, even if lawmakers don’t do it for you in the end.
