Trump wants to give you a bigger stimulus check, but is that really going to happen?

What an exhausting job it has been to reach the midpoint of 2020, and it only took five years, or so it feels that way.

The 2019 coronavirus disease pandemic (COVID-19) has completely altered our social norms, claimed the lives of more than 130,000 Americans as of July 2, 2020, and caused countless havoc by pushing the U.S. economy into recession. Despite record job creation in June, the unemployment rate is still at levels not seen in many decades.

President Trump signs memorandum on his desk.

President Trump signs memorandum on his desk. Image source: Official White House photo by Shealah Craighead.

The CARES Law distributed $ 2.2 billion to fight COVID-19

It was this unprecedented level of financial disruption that ultimately led Congress to pass and the President to sign the Coronavirus Aid, Relief and Economic Security Act (CARES) on March 27. The $ 2.2 billion price tag attached to the CARES Act makes it the largest financial aid package ever enacted.

The CARES Act was designed to throw a lot of money at a truly unforeseen problem. He distributed $ 500 billion to struggling industries, allocated nearly $ 350 billion to small business loans, gave $ 100 billion to hospitals to help combat COVID-19, and even awarded $ 260 billion to expand the benefits program. unemployment. But it is the $ 300 billion in direct stimulus payments that is most associated with the CARES Act.

Under the CARES Act, more than 160 million Americans have received an Economic Impact Payment, with a total amount paid of more than $ 270 billion. For those who remember, the maximum payments were $ 1,200 per person and $ 2,400 for married couples filing jointly, with an extra $ 500 for each dependent age 16 and under. To qualify for this maximum stimulus payment, a single, married, or head of household filer needed an adjusted gross income below $ 75,000, $ 150,000, and $ 112,500, respectively.

While the CARES Act had excellent intentions, it simply did not do enough for most Americans. An April Money / Morning Consult survey found that nearly three-quarters of the 2,200 respondents had already spent or planned to spend their stimulus money in four weeks. Given the level of economic disruption caused by the coronavirus pandemic, as well as the slow nature of the recovery, there is little doubt that Americans want (and need) additional stimuli.

Uncle Sam's arm and hand reached out of a mailbox as he held a stack of money in a fan.

Image source: Getty Images.

President Trump wants to give you a “bigger stimulus check”

Although it has been a point of discussion for more than two months, it seems increasingly likely that a second round of encouragement will become a reality sooner rather than later.

Earlier this week, President Trump was interviewed by Blake Burman of Fox Business News about the possibility of another round of direct stimulus payments for the American public. When asked about his support for direct stimulus payments, Trump said the following:

I make. I support it but it has to be done correctly. And I actually support larger numbers than the Democrats, but it must be done correctly.

This is actually the second time in so many weeks that Trump confirms his desire to see another bipartisan stimulus package approved on Capitol Hill, although it is the first time that he alludes to the idea that the next round of stimulus could be even larger than the First, at least in terms of direct payments to Americans.

For the President, there is clearly an incentive to put the money in the public’s hands. First, approximately 70% of the United States’ gross domestic product is derived from consumption. This means that putting money directly into the hands of workers and seniors should result in a significant portion of these payments leaking back into the economy fairly quickly. In summary, these payments can help revive economic growth during a period of historical weakness.

Also, don’t overlook the fact that it’s an election year. Neither party wants to be the one that did not go to beat by their constituents. And it’s especially important that President Trump pass another round of stimulus given recent polls showing he follows Democratic Party challenger Joe Biden. Passing another direct stimulus package is something the president may try to pass like a feather in his cap as the November election approaches.

A Democrat donkey and a Republican elephant stand on the American flag.

Image source: Getty Images.

Greater stimulus control is far from a guarantee

Of course, the fact that President Trump wants to see the American public receive larger direct payments does not mean that this will materialize. It is quite possible that Trump may encounter opposition within his own party.

Senate Majority Leader Mitch McConnell (R-Ky.) Has been particularly skeptical about passing a second round of stimulus without allowing the first round of payments to reach the US economy. Republicans as a whole are also skeptical of increasing the already massive federal budget deficit during an election year.

Another big topic of discussion is the extension of improved unemployment benefits, which I think is the biggest point of conflict between Democrats and Republicans. With 19.3 million people receiving unemployment benefits through June 20, Democrats have argued the need to ensure that these recipients receive an extension of the $ 600 per week payment delivered through the CARES Act. These additional $ 600 per week are due in late July.

Meanwhile, Republicans (as well as Trump) have argued that an extension of the improved unemployment benefits would discourage people from going back to work and thus oppose the idea. If Democrats and Republicans cannot resolve their difference on this issue, there will be no second stimulus package.

President Trump has also favored the idea of ​​a payroll tax exemption as a means of getting additional money into the hands of working Americans. Therefore, it is not even clear whether the end result of another stimulus round would imply a payment similar to that received by the more than 160 million Americans under the CARES Act.

At this point, there is no doubt that President Trump would like another stimulus package to be approved. However, he will have to contend with Democrats’ desire to see increased unemployment benefits expanded, as well as his own party’s desire to keep spending from spiraling out of control.