In the meantime, the economy is showing some signs of recovering from the pandemic. Thirty million people are accumulating unemployment, consumer spending has fallen 8% since January and the number of open small businesses has fallen 18%. Unemployment remains higher than at any time during the Great Recession.
While President Donald Trump signed executive actions over the weekend in an attempt to bypass Congress to provide some aid to Americans, incentive payments are above what he can unilaterally approve.
But administration officials said earlier that they would return a second round of incentive payments. Some 160 million people received the money in the first round, which was provided for by Congress when it passed the CARES Act in March. It cost about $ 270 billion.
It is not clear what a second round of payments would look like. The Republican-backed proposal would keep the parameters largely the same as the first round. Payments would range up to $ 1,200 for individuals and $ 2,400 for families and would be scaled down for higher-income Americans. They would be entirely phased out for individuals earning more than $ 99,000 annually and common filers without children making more than $ 198,000.
Families would receive up to $ 500 per child, and Republicans have suggested making dependency over 17 eligible this time around.
The Democrats are proposing to send out bigger checks. Their bill, which has already passed the house, charges $ 1200 per family member, and maxes out at $ 6,000 per household. It would also pay immigrants and their families who pay taxes, regardless of their legal status. Only immigrants with social security numbers got the first round of money. The failure thresholds would remain the same.
It can take weeks for the money to go out again after Congress authorizes the program. Recently, a majority of payments – most of them through direct debit – went within two months of the bill, although some people can still wait for the cash. Millions of low-income Americans risk missing out altogether because they do not normally file taxes.
The direct payments were effective in getting money into people’s pockets. Combined with the increased benefit of unemployment insurance, the aid helped more than offset the decline in earnings, and in fact led to a decline in poverty, according to a report by researchers from the University of Chicago and Notre Dame University.
But some economists say a straightforward approach would be more effective, ensuring that help is given to those who need it most. Overall, Congress has already authorized spending of more than $ 3 trillion on economic recovery.
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