Republicans and Democrats are bogged down in negotiations over what the next coronavirus aid package should look like and how big it should be. One thing they can agree on: everyone gets another round of stimulus checks.
Both Republicans The HEALS Act, introduced this week, and the HEROES Act passed by the Democratic House on May 15, follow the example of the CARES Act: Most adults who earn less than an adjusted gross income (AGI) of $ 75,000 at year they would be eligible to receive another check for $ 1,200. The payments would be cut for people who had an adjusted gross income of more than $ 99,000. This time, the GOP plan would extend the $ 500 payment for adult dependents, rather than just dependent minor children, a boon for families caring for disabled adults.
Similar to the Republican plan, the HEROES Act includes the same payment of $ 1,200 and a higher payment of $ 1,200 for each dependent, including dependent adults, though Democrats cover it up to three dependents. While some conservative senators have rejected Against a second round of direct payments, the fact that it appeared in the Republican Party’s initial bill seems like a good sign for its eventual passage.
“This unprecedented expansion of federal aid will help millions of workers, families, patients, businesses and governments survive this historic public and economic health crisis,” Senate Finance Committee Chairman Chuck Grassley said in a statement.
While it took a few weeks after the CARES Act passed for the first round of stimulus checks and direct deposits to come out (the bill was enacted on March 27, and the first direct deposits entered in mid-April), the second The round should appear in bank accounts much more quickly.
“As soon as Congress approves another round of refunds, if you get direct deposit, it will be in your bank account within a week,” Claudia Sahm, director of macroeconomic policy at the Washington Center for Equitable Growth, told Vox.
The money will flow much faster this time because the US Treasury has already created an internal file detailing who should receive the money. “They took out all the information that the federal government had,” Sahm said, “and the Treasury leaked it, and it went through the IRS first, but they built this file.” … Once that file existed, he went to another Treasury office that is basically the one that presses a button and the money goes away. “
Ultimately, a second stimulus check will be less for many American families than extending the payments for the expanded unemployment insurance that both parties are currently struggling for. While Republicans have proposed an additional weekly unemployment insurance payment of $ 200, Democrats want to extend the current additional $ 600 weekly payment, which would provide more long-term sustainable assistance as the country continues to grapple with the pandemic. .
But the speed of the stimulus controls is its own advantage: According to Sahm, the first stimulus was successful in part because it came out much faster than the improved unemployment benefits, which had to be sent through the states.
“It was a good policy. I want to see it again, ”he said. “I think it will be great because they can even go faster than before. The sad fact is that even in January, many families did not have much of a shock absorber and therefore needed money. Congress can send money. It was really effective. “
Extending the $ 500 payment to all dependents would be a boon to disabled communities.
While the Democratic and Republican versions of the bill would extend dependent payments to families with adult dependents, the Democratic version limits a payment greater than $ 1,200 to three dependents. Alternatively, the Republican plan would only give $ 500 for each dependent.
The inclusion of payments for dependent adults was good news for disability advocates who felt rejected during the first round of encouragement.
“It was very frustrating for me and for many people with disabilities when in the previous legislation, dependents were excluded from these payments at age 17,” Bethany Lilly, director of income policy for The Arc of the United States, told Vox. “Many people with disabilities still depend on family caregivers. They are often claimed as dependents, and simply having them completely excluded from the stimulus payment was not particularly logical to me. Now, at the time of the pandemic, many people with disabilities have dramatically increased costs and have only dramatically altered routine. “
According to Lilly, lawmakers told her that excluding adult dependents during the first round of encouragement was “an oversight.” The HEROES Act even goes so far as to retroactively pay adult dependents, so families can also reclaim dependent payments from the first round.
$ 1,200 may not be enough to avoid economic collapse
The CARES Act was massive legislation, totaling around $ 2 billion. In some ways, it was bigger than the New Deal. But it was also legislation designed to save a deep economic downturn until the country’s economy could safely reopen. It is a formula that worked for other nations, but the United States is still struggling to contain the virus. As Vox’s Emily Stewart explained, the United States is on the brink of economic disaster, “endangering the lives and livelihoods of millions of Americans and ensuring prolonged economic distress across the country.”
The unemployment rate currently stands at 11.1 percent, according to data from the Bureau of Labor Statistics, 7.6 percent more than in February, the last full month before the pandemic began in the United States. A CNBC report on Monday reported that up to 40 million Americans could face eviction thanks to the coronavirus pandemic and the resulting economic crisis.
Stephanie Kelton, professor of economics and public policy at Stony Brook University, is concerned that Congress does not take seriously the risk of deeper economic pain.
“It is not remote enough,” Kelton told Vox, referring to the second round of stimulus payments and explaining that the national median income in the US in 2017 is $ 1,023. “If you don’t have a job and no income and someone sends you a $ 1,200 check, that check will go to the landlord. … It’s surprising to me that Republicans don’t seem to understand very well how the economy works in the sense that they have this aversion to giving people money, somehow without realizing that what most of us do when we get money is to change and give it to someone else. “
For Kelton, any stimulus payment should be included in a broader package of other stimulus measures, including the continued rise in unemployment, to avoid economic collapse. “It is about fiscal support. If we withdraw support prematurely, the result will be that the economy continues to deteriorate, ”he said. “Unemployment continues to rise, temporary job losses become permanent, job losses [lead to] a wave of foreclosures and homelessness, late payments potentially spell a financial crisis because it fades away in people who are not paying their debts. So you need a comprehensive set of smart policies to support revenue. “
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