Stimulus check: what is the "dramatic" phase 4 package Trump is talking about?
The US President has said the White House is working on a "dramatic" new stimulus package, but what is actually known about what it will mean for US citizens?
President Donald Trump has announced a “dramatic” Phase 4 stimulus package to kick-start the US economy after the ravages of the coronavirus pandemic, which led to record numbers of unemployment claims and the rolling out of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act on 27 March, the cornerstone of which was the provision of stimulus checks for tens of millions of US citizens struggling to make ends meet as Covid-19 led to large-scale job destruction.
While Trump did not go into any specifics during an interview with Nexstar Broadcasting, the US president said that his proposals for Phase 4 would focus on business owners in general, with an emphasis on creating jobs in the manufacturing sector, but also promised the White House was looking at doing “something else,” further raising the prospect of a second round of stimulus checks.
The $3 trillion HEROES Act economic package, which has been championed by House of Representatives Speaker Nancy Pelosi, narrowly passed through on 15 May by 208 votes to 199 but is expected to face fierce opposition when it arrives on the floor of the Republican-controlled Senate.
Although there is no definitive time-line for the HEROES Act to be voted upon, Senator Roy Blunt made it clear early in June that Republicans are in no mood to rush through a second stimulus package, saying he felt that it was unlikely to happen in June, but that in his opinion it should take place before the August break. US National Economic Council Director Larry Kudlow suggested it would not be considered before the weekend of 4 July but there is a tentative consensus that Blunt’s suggestion of an August-at-the-latest convening on the issue is likely to pan out.
While the HEROES Act is based on a $3 trillion package, Trump’s Phase 4 proposal is believed to be more in the region of the $2.2 trillion CARES Act, while Kentucky Senator Mitch McConnell is leading calls for a further stimulus package to be restricted to $1 trillion.
Trump: “The economy is roaring back”
“I think we’re working on something that’s going be very dramatic, very good,” Trump said during his interview with Nexstar. “I think we are looking at a Phase 4. Phase 1, 2 and 3 have been fantastic for people generally… small business owners, also. But we’re looking at doing something else.”
“The economy is really starting to roar. We had the greatest job numbers in our history last month. We had great retail numbers… also the best in history. Up 17.7 percent… they were expecting 6 percent, 5 percent, maybe 7 percent, then we were 17.7. So the economy is roaring back. The plague as I call it, the virus, is abating. We know how to handle it.”
What is Trump proposing in a Phase 4 package?
With the numbers subject to some debate – a Bloomberg News report suggested Trump's administration is mulling a nearly $1 trillion infrastructure programme - it is believed that the US president favours a package of around $2 trillion with the main goal being to get the manufacturing sector grinding again.
White House trade adviser Peter Navarro said during an interview with Fox Business that Trump and his economic team see manufacturing jobs as the key factor in boosting the economy. What that means for US citizens as a whole is yet to be elaborated upon, with additional unemployment benefit top-ups of $600 a week set to expire at the end of July.
Since the CARES act was implemented, more than 45 million people have filed for unemployment in the United States.
Trump has also suggested boosting the US tourism industry by offering up to $4,000 in tax credits for families choosing to take a vacation in the states up to the end of 2021. Japan has mooted a similar idea to lure tourists back by offering a range of incentives to visitors. Those proposed by Trump under his “Explore America” proposal would include partially covering the costs of travel and accommodation.
Will Trump’s Phase 4 package include stimulus checks?
The impasse on the HEROES Act and the slow-moving negotiations between Democrats and Republicans on a consensus alternative to the $3 trillion package have left the issue of a second round of stimulus checks up in the air. If a second stimulus check package is signed into law at the beginning of August, following the timetable of the first round of checks US citizens could expect initial deposits to be made on the weekend of 22/23 August with a majority of direct bank payments issued by the end of September.
Those who do not have bank accounts could have to wait until the end of the year to receive a theoretical second payment.
Democratic presidential candidate Joe Biden on Wednesday made his third visit this month to the key election battleground state of Pennsylvania, where he laid out his own vision for the US economy.
Biden's proposal for reopening the economy includes expanded coronavirus testing and protective equipment for people who go back to work, as well as paid sick leave, small-business grants and hiring a workforce to chart the disease's spread.
Nationally, Biden now has his widest lead over Trump in the race, according to a Reuters/Ipsos poll on Wednesday, showing the Democrat with a 13-percentage-point lead.