With most Americans having already received their coronavirus stimulus checks as directed by the CARES Act, attention has inevitably turned to what the Government might do next to support a US economy fighting an ongoing battle against COVID-19. At the heart of most discussions has been how likely another stimulus check might be and how much it would pay second time around. Here we take a look at the issues surrounding the potential delivery of a second stimulus payment and try to work out what the Government will eventually agree to do.
What is the stimulus payment that is already available?
Under the $2.2 trillion CARES Act that was passed in March, eligible Americans have been receiving formally named Economic Impact Payments to the value of up to $1,200 per person. Those earning less than $75,000 a year have been awarded the maximum $1,200, with joint tax filers whose combined income is under $150,000 receiving $2,400 in total. With a sliding scale in operation, individuals who earn up to $99,000 and couples on up to $198,000 will have been eligible for a steadily decreasing payout, while parents have also been able to claim an additional $500 per dependent under 17.
The delivery of the original stimulus checks has not been without its problems, with some mistaking their payment for junk mail and others receiving less than they thought they should. Millions of Americans also remain at risk of missing out on their payments altogether as they fly under the radar of the IRS.
For those who have received the money, however, most will likely have found it invaluable, particularly given the rapidly rising number of unemployed and those whose work temporarily shut down. With money worries keeping more than half of Americans awake at night and debt concern on the rise, a further payout would undoubtedly be welcome.
What do we know about a second stimulus check?
Unsurprisingly, it seems almost certain that extra help will soon be on the way. However, what form it will take is still very much up in the air.
Time for HEROES?
A second relief package in the form of the HEROES Act has already been passed by the House of Representatives in May, and includes provisions for another stimulus check of up to $1,200, broader eligibility for the payment, and an increase in the amount households could claim per dependent.
Under the proposals, families would receive $1,200 each for up to three dependents, including those over the age of 16. At the same time, immigrants who had missed out on the first payment as they do not have a Social Security number would become eligible for this one and also potentially receive the money they could have received under the original scheme too.
Importantly, however, the bill must get through the Senate and be signed off by President Trump to be passed into law, and both the White House and the Republicans in the upper chamber have recoiled at the $3 trillion of spending involved. Congress will vote on the package next month, but with Republicans having declared it "dead on arrival", it is extremely unlikely to pass in its current form.
Pointers from The White House
While the HEROES Act has at least committed some ideas to paper, trying to work out what the White House will eventually deliver is far from an exact science. What we do know is that President Trump seems favorable to another payment of some sort.
When recently asked by a journalist whether there will be a second round of direct payments to Americans, the President said, "It will be very good. It will be very generous."
Meanwhile, another stimulus check remains in the thoughts of Steve Mnuchin, with The Wall Street Journal reporting that the Treasury Secretary said, "It’s something that we’re very seriously considering."
Given neither statement represents full and complete backing for another round of checks, however, predictions over exactly what a second payout would look like in terms of who would receive it and its potential value are extremely difficult to make.
Could something other than a second check be proposed?
While a second direct payment could be on the agenda, it could equally prove the case that the White House looks to focus on a different kind of assistance. In particular, there has been the suggestion that concentrating on stimulating the economy might be the preferred option to putting more dollars in the hands of households.
"I think we need to move from rescue and assistance to more long-term economic growth incentives," White House adviser Larry Kudlow said earlier in June in an interview with Fox Business. "For example, the president mentioned payroll tax holidays for the workforce, he talked about capital gains [tax rebates], he talked about tax breaks for restaurants, entertainment, sports contests, he’s talked about tax breaks for tourism."
A return-to-work benefit is another option that has been mooted, to incentivize people back to work, although Kudlow suggested this could replace the $600 weekly boost to unemployment benefits that is due to end after July.
When could a decision be made?
As to whether another stimulus check will come to pass, much could depend on how the economy is looking in a few week’s time. If the uptick in the economy that has been seen of late falters due to a resurgence of the pandemic, the argument for a second check could be strengthened. However, if the recovery continues and unemployment stabilizes or retreats, it could be argued that a further check ought not to be required.
At present, it is anticipated that negotiations between the White House and congressional leaders over a second stimulus package are unlikely to begin in earnest until late July. However, it might even prove the case that any decisions are kicked further down the road if the path ahead seems unclear.
What should people do?
Given the unknowns, all Americans can do for now is look to cope with their financial situation as best they can until information regarding a second stimulus payment becomes more clear. The best mortgage companies continue to offer leeway to homeowners worried about meeting their monthly payments, while foreclosures and evictions continue to be banned.
While overall use of credit cards has actually been on the decline, there will still be those who face mounting payments and have concern over paying what they owe. Again, however, credit card issuers are being more sympathetic than they have probably ever been, so worried borrowers should give them a call to see what assistance is on offer.
Understandably, household debt overall has been on the rise across the US, and for those for whom debt is becoming a growing concern, the advice is not to let your situation slide out of control. The best debt consolidation companies can help you bring your debts together into one place and hopefully result in a more manageable monthly payment. As an option nearing a last resort, the best debt settlement companies could even be used to try and negotiate your debts down.