Fourth stimulus check: why could it be unlikely?
Although unemployment remains stubbornly high and many Americans still need to be vaccinated, delivering another stimulus check is a long shot.
The federal government over the past year has opened the purse strings to prop up the US economy and households. One of the measures that the vast majority of the nation has benefited from are the three rounds of Economic Impact Payments, or stimulus checks.
Although the stimulus checks have gone a long way toward relieving financial stress of households, in a survey by Bankrate 61 percent of respondents said that the $1,400 stimulus check would not last them 3 months, a third said less than a month. This was pointed out in a letter to President Joe Biden from 21 Senate Democrats in their case to send recurring stimulus checks to American households until the end of the economic crisis.
Why a fourth stimulus check is unlikely
The letter from the senators calls for the recurring stimulus checks to be included in the next major piece of legislation in President Biden’s agenda the American Jobs Plan, a $2.3 trillion generational investment in infrastructure. Through the bill the White House hopes to create millions of good paying jobs and make the US economy greener and more efficient.
Biden has not responded to the letter sent by the senators nor an earlier letter sent by 56 House Democrats led by Representative Ilhan Omar. The inclusion of more stimulus checks would distract the debate even further as Republicans are already criticizing the bill saying that very little money is going toward “traditional” infrastructure, such as roads, bridges and highways. With an evenly divided Senate, Biden will need all 50 Senators that vote Democrat on his side, with Vice President Kamala Harris casting the tiebreaking vote.
Not enough support among Democrats
Although together the 76 congressional lawmakers, mainly progressives, have signed on to the proposal. More moderate Democrats would most likely deem more stimulus checks as too expensive to add on to the sweeping American Jobs Plan. Moderate Democrats in the Senate got President Biden to agree to tightening the income eligibility requirements for the $1,400 stimulus checks in the most recent round of stimulus passed in March.
Although the Senate parliamentarian recently ruled that Democrats will be able to use budget reconciliation, where they can bypass a certain GOP filibuster, more times this year, the mechanism limits what can go in the bill. It also caps the price tag of the legislation from the get-go leaving less room to maneuver once the horse trading starts. In a recent op-ed in The Washington Post, Democratic Senator, Joe Manchin from West Virginia, expressed misgivings about abusing the procedure, he wants to see bipartisan cooperation to pass legislation.
More stimulus is already coming
The President wants the bill to be ready by the summer, precisely when those respondents to the survey will be needing the extra injection of cash. But also when monthly direct payments of up to $300 per child through the enhanced Child Tax Credit are set to begin going to eligible families. The IRS commissioner at a Senate hearing on Wednesday told the Finance Committee that the agency was on track to have the program up and running for the 1 July start date.
Retail sales explode in March as consumers use stimulus checks to spend heavily https://t.co/dXtEYGMAMC— CNBC (@CNBC) April 15, 2021
The economy is rebounding faster than expected
President Biden has set 4 July as the date when the US will reopen, which going by the latest economic data and vaccination rates looks feasible. The Federal Reserve in March forecast that the US economy will grow by 6.5 percent in 2021 an even rosier outlook than was predicted in December. This will mean more people going back to work and less need for more direct stimulus payments, reducing any willingness lawmakers on the fence to back the idea.
Other economic indicators point to the recovery accelerating with retail sales exceeding the 6.1 percent forecast to jump 9.8 percent in March on the back of the $1,400 stimulus checks. And although unemployment is still terribly high, first-time filings for unemployment plummeted from 769,000 last week to 576,000 for the week ending 10 April. Knock on wood the US is not thrown back in to the grips of the pandemic, but the improving situation bodes ill for the fourth stimulus check.
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