Second stimulus check: could it be approved before new year?
Time is running out to pass a bill through Congress in 2020, which doesn't include a fresh round of stimulus checks, there's also hope for the new year.
Since the election things have reached breaking point with a looming 11 December deadline for Congress to fund the government thus avoiding a shutdown. There’s hope of a smaller stimulus bill passing before Christmas during Donald Trump’s lame duck session, then there are rumours that Joe Biden has something up his sleeve for January. It’s unlikely that the pre-inauguration option will include a stimulus check for individuals at all.
Stimulus check? The new $908 billion stimulus bill
A brand new bill put together by bipartisan moderates last week proposes spending much less generous than the Democrats would like, but significantly more than Republicans have been prepared to offer thus far.
The proposal was presented by a bipartisan group of moderate House and Senate members last week at a press conference. The bill amounts to a middle-ground option between McConnell’s current proposal and the Democrat House bill passed in October. The plan calls for $908 billion on a range of covid-19 relief measures.
During the presentation Mitt Romney, Republican of Utah said “I happen to be a deficit hawk. I don’t like borrowing money. I don’t like spending money we don’t have. But the time to borrow money is when there is a crisis. And this is a crisis.”
Part of the bill provides for four months of additional unemployment benefits but in a compromise the top-up would be just $300 as opposed to the $600 Democrats were seeking. The bill also calls for state and local funding to the tune of $160 billion, which will pay for front line workers.
If the Senate fails to pass a vote on the $908bn bill on 10 December, the next possible date for a bill to be voted on would be in February.
However there is no provision in the bipartisan proposal for another $1200 stimulus check.
Senate Republican leaders quickly undercut the plan, offering up their own bare-bones proposal that stood little chance of passing through both chambers.
Joe Biden's January plan for stimulus check
With prospects of a second stimulus check before Joe Biden is in the White House come 20 January looking more hopeless than ever, focus shifts to Joe Biden’s plans in 2021 to bring much-needed help to individuals struggling through the coronavirus-induced economic crisis.
A government report on Friday showed the labour market slowing in November as the covid-19 pandemic eclipsed its levels of the spring. Some 179,124 new infections are reported each day, a record, and more than 276,000 Americans have died of the disease.
The president-elect said Friday's "grim" jobs report showed that economic recovery is stalling, urging Congress to pass a covid-19 relief bill immediately and follow up with "hundreds of billions of dollars" in more aid in January.
"Any package passed in the lame-duck session is not going to be enough overall. It's critical but it's just a start. Congress is going to need to act again in January," Biden told reporters in his hometown of Wilmington, Delaware.
"We're looking at hundreds of billions of dollars," he said.
Why the delay on stimulus bill talks?
Negotiations between the Democrats and the Republicans over a fifth piece of covid-19 relief legislation have been at an impasse for six months. Democratic negotiator Nancy Pelosi and US Treasury Secretary Steve Mnuchin seem to have struggled to come together on the size and scope of an aid package.
While Pelosi (D-Calif.) dropped the spend proposed in the HEROES Act to $2.2tn, Mnuchin raised the White House’s offer from the $1tn in the HEALS Act, a bill proposed by Republican senators in July, only as far as $1.9tn.
Recent remarks made by significant players on the Republican side of the process don’t offer great cause for optimism over the prospects of a swift deal on a major bill.
Senate Majority Leader Mitch McConnell, who now looks to be taking the stimulus lead on the Republican side, has claimed he wants to pass a bill this year as well. But he only appears interested in a “skinny” smaller and more targeted bill, where the government doesn’t spend as much money.
“I don’t think the current situation demands a multi-trillion-dollar package,” McConnell said two weeks ago. “So I think it should be highly targeted, very similar to what I put on the floor both in October and September.” Those bills constituted two $500bn packages, neither of which included a stimulus check to individuals.
Could there be a stimulus check without stimulus bill?
One outside chance of hope for a pay out this year lies in the possibility that some coronavirus economic-relief measures could be included in a general federal funding bill that needs to pass Congress by 11 December to avoid a government shutdown.
When would a stimulus check arrive after being approved?
The good news is that if a bill does get passed and that bill has stimulus checks in it, the systems are already in place with the IRS that make the whole process run a lot quicker the second time round.
Back in August, Treasury Secretary Steven Mnuchin said it would take about a week to process the first payments. "I can get out 50 million payments really quickly. A lot of it into people's direct accounts," he promised. This doesn’t mean you'll definitely get yours a week after pen goes to paper in Congress, but there are some methods of payments that are slower than others; the fastest being direct deposit, then paper checks, then the slowest is “EIP”, Economic Impact Payment, cards.
It's important to note, even in the earliest case scenario, the first checks likely won't start arriving until the second week of January.
The earliest possible scenario looks like this; if the president signs the bill into law on 10 December, the first direct deposits would be issues the week of 28 December. The first paper checks would be sent out the week of 11 January, and finally EIP cards the week of 8 February.
The next possible date for the president to sign a bill following mid-December would be 3 February. The direct deposits would come the week of 8 February, paper checks on 16 February and then the EIP cards trailing on 15 March.
Following those two scenarios, according to analysis done by Cnet, the next dates start in March and then April respectively, with checks trickling in right through April and May.
It’s important to note that the IRS doesn’t have capacity to send all checks at the same time, they’ve so far sent 160 million of them from the first stimulus bill and some people are still waiting.
The IRS has said it can deliver five million to seven million paper stimulus checks a week, and that they will prioritise those most in need, so they’ll start with people whose adjusted gross income, or AGI is less than $20,000.
And here’s a handy stimulus calculator devised by Cnet that can help you figure out how much you could get.
How badly does the US economy need stimulus?
A new report from the Economic Policy Institute recommends that “Congress provide debt-financed fiscal support of $2 trillion between now and the middle of 2022, and then continue support on the order of $400 billion annually between then and the end of 2024, with a slow phaseout of this aid thereafter.”
With millions of Americans unemployed directly owing to the coronavirus pandemic and the last trickles of enhanced unemployment benefits due to dry up come 26 December, Josh Bivens explains that this plan needs to “first stop the economic bleeding and then repair the aspects that have been “rotted away” in order to rebuild a resilient economy.”