Coronavirus USA

Second stimulus check: why have Democrats proposed reduced payments?

As Republicans and Democrats remain deadlocked over a fresh stimulus package, the House of Representatives will convene Saturday over USPS bill.

Second stimulus check: why have Democrats proposed reducing payments?
JIM WATSON AFP

Republican and Democratic lawmakers remain deadlocked on the finer points of a fresh coronavirus stimulus package with neither side willing to cede ground on a range of measures including aid to states hit hard by the economic downturn in the US, funding for schools unemployment benefits and funding for the struggling United States Postal Service, which has become the unlikely focal point of a battle of wills between Democrats and the administration of Donald Trump ahead of the November presidential elections.

In light of the impasse, more than 100 House Democrats issued a letter calling on Democratic House of Representatives Speaker Nancy Pelosi to hold a vote on an extension of the extra $600-a-week federal unemployment benefits that expired in July, just one of the stumbling blocks to a complete stimulus package being agreed between the two parties

In a letter addressed to Pelosi, 114 Democratic lawmakers urged the House to press for a bill that would see the reinstatement of the $600-a-week unemployment benefit until the end of the coronavirus pandemic that has forced millions of Americans out of work.

Related: Stimulus checks: what is a tax refund interest check? 

USPS stand-off holding up stimulus talks 

However, Pelosi told PBS' NewsHour that she fears Republicans would use acquiescence over the $600 payment to shelve other Democratic priorities. "I don't think strategically it's where we should go right now because the Republicans would like to pass something like that and say forget about" other proposals in the Democrat HEROES Act, Pelosi said. 

The House Speaker added she would also want any legislation to include aid for state and local governments, food aid for children, funding for vote-by-mail and other initiatives.

The Democrat-controlled House is expected to pass legislation on Saturday that will provide $25 billion to fund the US Postal Service as the state-owned entity prepares to deliver millions of mail-in ballots for November's presidential elections. Dubbed the "Delivering for America Act," it will be put to floor during a rare Saturday session called by Pelosi during the congressional August recess. But it is unlikely to be taken up in the Republican-controlled Senate.

"These changes are causing huge delays, reported all across the country, threatening the effectiveness of the Postal Service and undermining our democracy," said Democratic Representative Carolyn Maloney, the bill's author.

Related: Second stimulus check: who's to blame for lack of payments?

Stalemate on stimulus package

With Pelosi apparently ruling out any concessions on the $600 unemployment benefit and Donald Trump tying the issue of USPS funding to striking any deal on a fresh stimulus package, it appears the issue of another round of stimulus checks for US citizens will remain on hold until the Senate returns to business on 8 September. 

The unemployment benefits issue is currently one of the main sticking points that have stifled talks on a new economic stimulus deal. While Republicans agreed to the $600 amount in the CARES Act in March, they want to see that figure drop to $400 in any new deal. However, Pelosi has said that the full extension of the $600 benefit is non-negotiable for her party.

As a result of the stalemate between Democrats and Republicans on the federal unemployment benefit, President Donald Trump decided to take matters into his own hands two weeks ago when he signed an executive order to partially restore the jobless aid, which would see unemployed workers receive a federal payment of $300, while states would have the option of topping up that figure by $100 to bring it to $400 – in line with Republican proposals.

Trump has claimed the Democrats are responsible for holding up the stimulus deal while his political opponents have countered that they have in fact made concessions, offering to drop $1 trillion from their demands if the White House agrees to top up the Republican HEALS Act by the same amount. 

Trump’s extra unemployment benefit would last just five weeks

The president designated $44 billion from the Federal Emergency Management Agency’s Disaster Relief Fund to cover the aid. Under the executive order, the benefit will run until 6 December or until the $44 billion runs out, with experts estimating that the money would last for only about five weeks.

As such, unemployed workers will be hoping that Congress can strike a deal on the extra federal unemployment benefits that would see them receive the aid for a longer time period. Such an agreement would likely fall under a new economic stimulus bill, though on which Democrats and Republicans are far from an agreement. 

When the Senate returns after summer recess in September, one last push will be made by both sides to hammer out a deal before the end of the fiscal year on 30 September. 

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