Third stimulus check: summary and news on 10 February 2021
Stimulus checks latest news: live
- Stimulus pushback from Republicans in early talks
- Biden intent on passing $1,400 stimulus checks as part of his American Rescue Plan (full story)
- House Democrats unveil legislation on $3,000/$3,600 child tax credit legislation (full story)
- Senate adopts budget resolution that will allow the $1.9tn stimulus bill to be passed
- Biden in stimulus bill speech: “I’m not cutting the size of the checks"
- Senate votes in favor of non-binding amendment to tighten stimulus check eligibility
- Over 50 House Democrats urge Biden to maintain $75,000/$150,000 income thresholds
- US covid-19 cases/deaths: 27.2 million / 469,833 (live updates)
US consumer prices rise modestly; airline fares tumble
US consumer prices rose moderately in January as an increase in the cost of gasoline was blunted by a slump in airline fares, suggesting inflation could remain benign for a while amid a pandemic that has fractured the labor market and services industry.
The Labor Department said on Wednesday its consumer price index increased 0.3% last month after a downwardly revised 0.2% gain in December. In the 12 months through January the CPI rose 1.4% after advancing by a revised 1.3% in December.
Economists are, however, divided on whether faster inflation would stick beyond the so-called base effects. Some believe trillions in pandemic relief provided by the government will stoke price pressures. Others argue that labor market slack, characterized by at least 17.8 million on unemployment benefits, would make it harder for inflation to become entrenched.
The Federal Reserve has signaled it would tolerate higher prices after inflation persistently undershot the U.S. central bank's 2% target, a flexible average. The Fed has slashed interest rates to near zero and is pumping money into the economy through asset purchases. It is expected to maintain its ultra-easy monetary policy stance until mid-2023.
Asia stocks hold at highs, sustained by US stimulus possibilities
Asian shares rested at record highs on Thursday as investors digested recent meaty gains, while bulls were sustained by the promise of endless free money after a benign reading on US inflation and a dovish Federal Reserve outlook.
Federal Reserve Chair Jerome Powell said he wanted to see inflation reach 2% or more before even thinking of tapering the bank's super-easy policies.
Notably, Powell emphasised that once pandemic effects were stripped out, unemployment was nearer 10% than the reported 6.3% and thus a long way from full employment.
As a result, Powell called for a "society-wide commitment" to reducing unemployment, which analysts saw as strong support for President Joe Biden $1.9 trillion stimulus package.
Indeed, Westpac economist Elliot Clarke estimated over $5 trillion in cumulative stimulus, worth 23% of GDP, would be required to repair the damage done by the pandemic.
Third stimulus check: does child support affect stimulus payments?
The American Rescue Plan is still yet to be passed by Congress but we know that President Biden's proposal looks to put struggling families first.
Read the full story:
Do you have to pay tax on your stimulus check?
Getting a payment won't mean a higher tax bill for 2020, but the amount of your stimulus money could ultimately change.
Massachusetts Rep Aryanna Pressley pushes for $2,000 recurring stimulus checks
Quoting lyrics from a Gwen Guthrie song called "Ain't Nothing Going On But The Rent" Pressley continued a drive progressive Democrats have been pushing for almost a year, saying:
"Ain't nothing going on but the rent
Let's legislate like it. The aid has stopped but the bills keep coming, & in most instances have doubled.
2K survival ~ recurring."
Nit-picking over stimulus eligibility thrown into stark contrast
Forbes: The 660 billionaires in the U.S. have increased their collective net worth by $1.1 trillion since the start of the pandemic. The jaw-dropping statistic, contained in a report by Americans for Tax Fairness and based on data from Forbes, hints at the sharp divergence in the economic fate of Americans. While over 40 million Americans relied on unemployment benefits in 2020, the richest of the rich saw their wealth soar over $1 trillion.
The dynamic is even starker when contextualised in the current negotiations over the next stimulus relief. “With their $1.1 trillion increase in wealth since March, America's 660 billionaires could give every one of the 331 million people in the United States a $3,400 stimulus check and still be billionaires,” tweeted Robert Reich. Reich, the Secretary of Labor under Bill Clinton and author of the forthcoming book, “The System: Who Rigged It, How We Fix It.”
Instead of arguing over small changes in stimulus check size that would have a huge impact on the lives of millions, perhaps we should be arguing over small changes that would barely be noticed by the 660 billionaires in the country.
How to claim your stimulus check on your 2020 tax return
It is thought that millions of Americans may have been missed out from the first rounds of stimulus checks, which saw up to $1,800 sent to each eligible recipient. The whole process is administrated by the IRS, with the payments technically coming as a pre-emptive tax rebate for 2020.
That means that if you were one of the unfortunate ones who was missed from the first round of payments you may be able to claim it as a tax deduction now. Even if the rules of eligibility change for the third round of stimulus checks, there's nothing to stop you from receiving backdated payments from last year.
Adult dependents could receive stimulus checks in new Democrat proposal
Having missed out on stimulus checks in the past the new covid-19 relief bill could see adult dependents receive the third round of direct payments. In fact, there are even suggestions that they could be due a stimulus check worth up to $2,000, to include the $600 distributed shortly after Christmas.
This would see the eligibility expanded significantly with an estimated 13.5 million adult dependents potentially getting a stimulus check. It is though that around half of these would be students, but there are plenty of others who could also be in line for the cash.
"We’re facing an economic crisis caused by a public health crisis — and we need bold action to address both. That’s why I’m urging Congress to pass the American Rescue Plan."
Biden on stimulus checks: "$1,400 checks for people who need it"
The President has repeated his commitment to another round of stimulus checks and insists that he will not be moved on the $1,400 amount included in his American Rescue Plan. This amount acts as a 'top-up' on the $600 distributed in early January, as part of Trump's emergency relief bill.
Biden did say that he wanted the stimulus spending to be targeted, suggesting that the threshold for eligibility may be altered in comparison to previous round of payment. A recent poll showed that around two out of five Americans thought Biden's $1.9 trillion proposal was sufficient, while the same number believed it did not go far enough and greater spending was required.
Hopes that stimulus spending will boost economy for the next decade
After nearly a year of pandemic-related uncertainly, reccession and unemployment increases it is no surprise that the short-term outcomes are the focus of stimulus check discussions, but there is a longer aim in sight. Samy Chaar, Chief Economist at Lombard Odie, points out that Biden is betting on the $1.9 trillion of federal spending boosting the economy and creating a cycle of prosperity.
Debate in recent weeks has focused on the eligibility requirements for stimulus checks for exactly this reason. Middle and high income earners are shown to be more likely to save their stimulus checks, meaning that they are less effectively stimulating the economy.
RECAP: Who would be eligible for the third round of stimulus checks?
After President Biden made clear last week that he is not willing to negotiate on the size of stimulus checks included in his new covid-19 relief bill, talks now appear to be revolving around the eligibility requirements. In the past individuals earning less than $75,000 per year, or $150,000 for a couple who file jointly, were able to receive the full amount.
There had been concerns raised by mainly Republican lawmakers that Biden's proposal was not targeted enough and that the threshold should be reduced to $50,000. A decision is yet to be made but it appears that Biden is pushing for wider eligibility, with more people now able to receive stimulus checks on behalf of adult dependents.
Democrats favour huge expansion of child tax credits
The American Rescue Plan would see the current system of child tax credits completely overhauled in what President Biden hopes will tackle the growing problem of child poverty in the United States. It is no secret that the poorest have been worst-hit by the economic consequences of the pandemic and additional federal funding is needed to make a considerable increase on the amount offered to parents.
Not only would the amount on offer be nearly doubled but the distribution would be changed to make it appear more like the stimulus checks also included in Biden's plan.
Senator Cory Booker said of the proposal: "The biggest impact we can make for economic justice in our country, and enact measurable transformational change, lies within this policy that would slash child poverty.”
Stimulus support sees Biden's approval rating rise
A new poll conducted by CBS News has suggested that the American public is largely on-side with the President on his new stimulus bill, which is still being discussed in Congress. The $1.9 trillion package includes a third round of stimulus checks, this time worth up to $1,400, amongst other covid-19 relief funding.
Biden had hoped to get the major bill passed into law swiftly after taking office but sustained opposition from Republican lawmakers and the packed Senate schedule have delayed things. The poll suggests that at least four out of five Americans want to see the American Rescue Plan passed by Congress, so the new stimulus spending can begin.
Biden wants rapid stimulus check approval
After Americans were forced to wait nine months for the second round of stimulus checks President Biden is eager to get the third round out much more quickly. He had pledged to get the new wave of $1,400 direct payments out as soon as he took office but after facing opposition in Congress talks have taken longer than expected.
However after initially looking for a bipartisan solution it appears that Biden is now willing to force through his covid-19 economic relief bill using a process known as reconciliation. Here's everything you need to know about the prospects for the next round of stimulus checks...
Huge support for Biden's stimulus check package
In recent weeks the fate of President Biden's covid-19 economic relief bill, the American Rescue Plan, has come under intense scrutiny as numerous lawmakers have attempted to make alterations to the proposal. Much of the dispute has centred around the third round of stimulus checks, which some argue are too generous.
There have been calls for the eligibility requirements to be narrowed to exclude those classed as "higher-earners", which could see individuals earning more than $50,000 unable to recieve the full amount. However figures suggest that any alterations would be unpopular after a CBS News Poll showed that 83% of Americans are infavour of Biden's stimulus bill.
What would a stimulus check reduction mean?
In recent weeks predominately Republican lawmakers have tabled proposals that would see the income threshold for stimulus checks lowered to $50,000 for an individual. This would mean that Americans earning above that figure would not be eligible for the full $1,400 direct payments.
In the past that threshold had been at $75,000, a considerable decrease which would see around 40 million miss out on the full amount. It should be noted that above that figure Americans can still recieve a proportion of the stimulus check amount, but not the full payment. The claim is that this adjustment would target the funding more efficiently but it would certainly not be a popular move.
Only 1 in 5 believe stimulus bill is too large
The size of the covid-19 economic relief bill propsoed by President Biden has been a contentious issue since it was first announced in early January, with some suggestion that the stimulus check provision may be decreased to curb federal spending. The $1.9 trillion American Rescue Plan includes a round of $1,400 stimulus checks, but there was considerable push-back from Republican senators.
Evidence suggests that the vast majority of Americans believe that Biden's proposal is either sufficient or does not go far enough, suggesting that any attempts to reduce the amount of stimulus spending would be deeply unpopular with the general public.
Stimulus check push back adding to Republican flight risk
“They were so quick to bail out corporations, giving big companies money, but continue to fight over giving money to people in need,” said Mr. Nunez, who plans to change parties this week.
“Also, I’m a business owner and I cannot imagine living on $7 an hour. We have to be fair.”
An army veteran in Pennsylvania said his disgust with the Capitol riot was compounded when Republicans in Congress continued to push back on sending stimulus checks and staunchly opposed raising the minimum wage to $15 an hour.
Full story about Republicans leaving their party by the New York Times.
Stimulus: "wake up and understand"
In case you haven't yet heard Rashida Tlaib, Congresswoman for Michigan13th, explaining her thoughts on the stimulus payments, or as she is now saying, 'survival checks'.
Tlaib agrees that there is really no excuse for Democrats not to deliver now.
Stimulus earnings limits discussed
Richard Neal, Chairman of the House Ways and Means Committee, is confident that the coronavirus relief package Congress is currently writing will be passed by mid-March. Neal said at a press conference on Monday that his committee will begin hammering out the details of their half of the proposed $1.9 trillion covid-19 relief bill on Wednesday, which they have, hopefully wrapping up by Friday.
The Ways and Means $941 billion portion of the relief bill includes expanded tax credits, extended unemployment insurance and the $1,400 direct payment for a third round of stimulus. After much debate over the past couple weeks about lowering the threshold for eligibility, the House will move forward on legislation that would see the same thresholds as the previous two payments.
Greg Heilman digs into the earnings question.
Stimulus quick update
"It's important at this moment to get money out to families."
One argument made from the analysts in this discussion is that we need to trust the American people to do what is best for themselves with the money.
The checks are not going to the top 10%, but the debate continues at where the line is drawn: $50,000, $75,000...?
US economy update
With Presdident Biden's rescue package in discussion, Wall Street's main indexes opened at record highs on Wednesday, supported by positive earnings updates, while investors looked to a speech by Federal Reserve Chair Jerome Powell for clues on the pace of an economic rebound.
The Dow Jones Industrial Average rose 52.2 points, or 0.17%, at the open to 31428.02. The S&P 500 rose 9.6 points, or 0.24%, at the open to 3920.78, while the Nasdaq Composite rose 85.6 points, or 0.61%, to 14093.347 at the opening bell.
IRS glitch impacts stimulus check eligibility
Brian New, an investigative reporter for CBS 11 News Dallas/Fort Worth, has been looking into how a glitch in the Inland Revenue Service computer meant that over one hundred thousand Americans were advised that they were not eligible for a stimulus check.
Want to know more? Check out below...
Early Republican stimulus backlash
Representative of the 9th District of New Jersey, Bill Pascrell has highlighted the immediate push back from some Republicans on the discussions to get financial help out to Americans.
His specific issue comes from Kevin Brady who he says went on the attack against expanded unemployment benefits, raising the minimum wage and increased health benefits to help people afford care during the pandemic.
In an attempt to show where priorities appear to lie, Pascrell points to Brady's promotion of tax cuts for the super rich.
Stimulus payments timeline
US President Joe Biden outlined that tax-paying Americans will receive a third stimulus check, for up to $1,400, as part of his $1.9tn American Rescue Plan (ARP). If approved, it will be the third round of direct payments and unlike the previous relief programmes, may not be available to those on high incomes.
Biden’s ARP announcement comes less than a month after Donald Trump signed off a $900 billion covid-19 Relief Bill but it still needs to get through the Senate and that may not happen until late February/early March according to some analysts.
We have a look back at the timeline of events since the start of the relief programme, almost a year ago.
"I'm here, live, I'm not a cat" - Texas lawyer Rod Ponton
Nothing to do with stimulus checks unfortunately. But very funny.
Progressives insist $15 minimum wage won't create unemployment
Joe Biden's proposed 2021 Raise the Wage Act would raise the minimum wage to $15 an hour by 2025, and in effect, improve the income of around 27 million workers as well as lifting 900,000 people out of poverty.
However, raising the minimum wage would also incur price hikes for consumers and employers. The Congressional Budget Office (CBO) have suggested that it could lead to job cuts with up to 1.4 million out of work by 2025. Those claims were rejected by California Rep. Ro Khanna who tweeted: "This CBO analysis is not by leading economists in the field."
Social Security benefits - where does the money come from to fund it?
In the US, Social Security is financed through a dedicated payroll tax. In 2021, every American worker will pay 6.2% of their wages to the government on all earnings up to $142,800. Employers match that amount, or if you’re self-employed, you will pay 12.4% into the Social Security trust fund.
How to claim your stimulus check on your 2020 tax return
Didn’t get your second stimulus check? Never fear, you can claim your missing payment as part of your 2020 tax return through Recovery Rebate Credit.
More information here:
Child Tax Credit would help jobless parents
A proposed overhaul of Child Tax Credit would boost payments to up to $3,600 for children up to the age of six, or $3,000 for children up to age 17, compared with its current limit of $2,000 for many families. And instead of claiming the credit when you file your tax returns, as is now the case, the government would provide monthly payouts, USA Today reports.
What have the Democrats said about paying $ 3,600 per child?
Democrats released the part of their sweeping $1.9 trillion covid-19 relief bill on Monday, including $1400 stimulus checks and enhanced child benefits.
Employment hasn't rebounded for poorer workers
People who make less than $30,000 have lost their jobs at higher rates during the pandemic, and struggle to find new ones, a new analysis shows — even as higher earners have seen their job prospects recover.
Employment for lower-wage workers remains 14% below pre-pandemic levels and is trending downward, according to the Federal Reserve Bank of New York analysis, as President Joe Biden and others warn of a so-called "K shaped" recovery where a portion of the American workforce gets left behind even as others see a rebound. Employment for high-wage workers is now slightly above its level from when the pandemic first hit nearly a year ago.
"The American people are hurting," Biden said in an Oval Office meeting Tuesday with business leaders to discuss his American Rescue Plan. "A lot of people are in real, real trouble." He argued they need to move quickly on both getting the virus under control but also to address the economy.
US stimulus check: live updates
Welcome to our daily live blog bringing you updates on the progress being made in attempts to pass President Joe Biden's $1.9tn coronavirus relief package, which includes provision for a stimulus check of up to $1,400.
Here's our latest report on the situation regarding a third direct payment: