Simply put, there is nothing that could have prepared people for what we experienced in 2020. Putting aside the hornet jokes of the murder, the 2019 coronavirus disease pandemic (COVID-19) has been a shock physical and financial for the United States. It caused the deaths of more than 136,000 people in the U.S., displaced more than 20 million workers, and pushed the U.S. economy into a deep recession after its longest expansion in history.
Although addressing the medical response to COVID-19 is still user-friendly, lawmakers believed the best way to respond to an unprecedented pandemic was with a never-before-seen aid package. The result was that the Coronavirus Economic Aid, Relief, and Encouragement Act (CARES) was enacted on March 27.
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The CARES Act provided stimulus money to more than 160 million Americans
The $ 2.2 billion CARES Act was an ambitious proposal that ultimately provided funds to hospitals, struggling industries, and small businesses, as well as provided additional funds for the unemployment benefits program. But make no mistake about it, the CARES Act is best known for providing more than 160 million taxpayers and seniors with a direct stimulus payment.
These Economic Impact Payments, as they are officially known, could total up to $ 1,200 per individual and $ 2,400 for a couple, with parents and households eligible to receive $ 500 for qualified dependents under the age of 17. Therefore, a qualified family with three children children can receive a payment of $ 3,900 under the CARES Act.
But despite having all the right intentions, the CARES Act fell woefully short in the department of financial assistance. About three-quarters of stimulus recipients spent their payment in four weeks or less. Considering how slow the economic recovery has been, these payments simply have not been enough for most Americans.
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Breaking News: Stimulus Deal 2.0 could disappoint you in several ways
The good news is that another stimulus deal seems likely, and direct pay to workers and seniors is likely. But there is also a real possibility that the next round of stimulation may disappoint many people in various ways.
1. Payments still not close to being enough
For starters, there is a very real possibility that another round of funding will not do much for most Americans. To be clear, any financial assistance is better than no financial assistance. However, with funding for the CARES Act that doesn’t even last a month for three-quarters of recipients, Stimulus 2.0 could be a repeat.
For what it’s worth, the Democrat-led House of Representatives passed the HEROES Act on May 15. This proposal would reflect the maximum individual and couples payments of the CARES Act of $ 1,200 and $ 2,400, respectively, with higher dependent kicks (limit three) of $ 1,200 instead of $ 500. Therefore, a couple with three children You could maximize with a payment of $ 6,000.
Meanwhile, President Trump suggested in a recent interview with the Fox Business Network that he would like to pay Americans more than what Democrats have offered. It remains to be seen if he can get other Republicans to accept such a move.
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2. Rating thresholds are significantly lowered
Another way to be disappointed with the next round of stimulus is if lawmakers adjust income thresholds to qualify for a maximum or partial payment.
Under the CARES Act, single, household, and married taxpayers can earn the maximum payment with an adjusted gross income (AGI) below $ 75,000, $ 112,500, and $ 150,000, respectively. In addition, payments were completely eliminated at $ 99,000, $ 136,500, and $ 198,000 for single, household, and married taxpayers.
While the HEROES Act did not change these income thresholds, Republicans can lower who will receive another stimulus payment. Although nothing is set in stone, Senate Majority Leader Mitch McConnell (R-Ky.), While speaking at an event in his home state of Kentucky, noted that people earning less than $ 40,000 have been the most affected by the pandemic. With the Republican Party seeking to curb a federal deficit that has already skyrocketed as much as possible, we could see a battle unfold over income thresholds qualified for stimulus 2.0.
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3. There is still an avalanche of exclusions
As noted, the CARES Law resulted in more than 160 million people receiving an Economic Impact Payment. Democrats would prefer to see this figure increase when the next round of funding is announced, with a broader range of dependents kicking in for their parents or home, and undocumented workers with a taxpayer identification number receiving a payment.
This is unlikely to be the case with Republican lawmakers. Although there have been no specific disagreements about expanding who qualifies as a dependent, several Republican lawmakers have been distant about the idea of allowing undocumented workers to qualify for a stimulus payment.
Obviously, the next round of stimulus will represent an exchange of both political parties. But it is not out of the question that a series of exclusions will be maintained, especially when it comes to undocumented workers with a taxpayer identification number that disqualify them and / or their family to receive stimulus money.
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4. Improved unemployment benefits do not extend
Tens of millions of Americans are also likely to be disappointed if the improved unemployment benefits are not extended in their current form.
Enhanced unemployment benefits involve paying approved unemployed beneficiaries an additional $ 600 per week between April 1 and July 31. In less than two weeks, this additional payment of $ 600 per week will stop. The problem is that there were more than 18 million continuous unemployment claims as of June 27, according to the US Employment and Training Administration.Without this, $ 600 per week added, it could be difficult for people to pay their rents , mortgages and auto loans.
Republican lawmakers have insisted that they have no intention of extending the improved unemployment benefits in their current form beyond July 31. The Republican Party views these exorbitant unemployment payments as a disincentive to return to the workforce. While the next stimulus deal may not offer improved unemployment benefits, the most likely scenario is that the improved weekly pay is commensurate with what a person would earn on the job. In short, most unemployed beneficiaries will be fired from their additional $ 600 / week layoff in late July.
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5. There are delays in tickets and / or payments
Finally, stimulus 2.0 could be a disappointment if lawmakers allow their differences to hinder the passage of a bill, thereby delaying the disbursement of stimulus funds.
Today, July 19, is the last day that the US Senate is out of session. However, the Senate is expected to have another month without legislative work between August 10 and Labor Day, September 7, 2020. This means that lawmakers have between July 20 and August 7 to analyze the next stimulus proposal. It seems easy, especially considering that some of the preliminary work on the upcoming deal has likely been going on behind the scenes for weeks. But if lawmakers can’t let go of political arrogance, their differences may not lead to anything until after Labor Day.
As a reminder, direct stimulus payments are not going to come out the moment another stimulus law is signed. Often, it takes several weeks for the Internal Revenue Service to get everything to send direct deposits and other forms of payment. Therefore, there is a real risk that, even if a second stimulus agreement is approved, it could be a while before Americans and older people get this cash.
