Fourth stimulus check news summary: Sunday 25 April
US stimulus checks news: Sunday 25 April
Stimulus and the poverty impact
Poverty was a problem in the US well before the start of the coronavirus pandemic. But the ongoing crisis certainly hasn't helped the situation.
Over the course of the past year, millions of Americans have lost their jobs, and many have seen their income drop as the pandemic forced businesses to shutter and consumers to stay home. And while the jobless rate has come down since peaking last April, it's still considerably higher than it was before the pandemic began.
For The Ascent, Maurie Backman considers the effect of the stimulus funding on poverty rates.
President Biden is facing pressure from several different groups, both within and outside of his own Party, to include a fourth stimulus check in one of the economic bills that his team are currently working on.
The IRS has sent out over 161 million stimulus checks since the American Rescue Plan was signed last month, but attention has already turned to the future with growing calls for a fourth stimulus check, perhaps one with recurring payments.
Tax cuts for those who received stimulus checks
President Biden is reportedly considering driving down the tax rate for low- and middle-income earners to help them deal with the economic consequences of the pandemic. POLITICO report that those earning less than $75,000 will owe nothing in federal income taxes under the new rules.
The move will help the White House offset programmes included in the American Rescue Plan that essentially provided tax cuts e.g. stimulus checks and the Child Tax Credit expansion.
“It was a big honking tax cut for low- and moderate-income people,” said Howard Gleckman, a senior fellow at the Tax Policy Center, on the recent stimulus bill. “It plays against type — Democrats are not supposed to cut taxes, Democrats are supposed to raise taxes.”
Bipartisan support for stimulus checks
One of President Biden's stated aims upon entering the White House was to help reunite America, and it seems he has managed to do that in at least one respect. One of the first priorities for his administration was to pass another round of stimulus checks and over 161 million have already been sent out.
The stimulus checks have been hugely popular throughout the pandemic and a bipartisan majority across the country were in favour of the American Rescue Plan when it entered Congress in February.
When the recent stimulus bill was passed the US tax authority, the Internal Revenue Services, was not adequately prepared to administrate the new-look Child Tax Credit that it introduced.This means that they are having to set up a new national system while overseeing both a busy tax season and the distirbution of the third stimulus checks.
In testimony made before the Senate Finance Committee, Commissioner Chuck Rettig stated that his agency is on track to implement the online infrastructure needed to make these payments, but how long will it take?
As Biden prepares to push his next large-scale economic package through Congress, there is plenty of speculation about the prospect of a fourth stimulus payment being included. What the value of that check would be is also not known but the general feeling is that it would folllow in line with the $1,200 payments, although there has been talk of raising it to a maximum of $2,000, in line with the same eligibility rules.
The third round of payments, as well as tidying up previous outstanding issues, is still an ongoing task for the IRS, however, they may see more work coming their way with another check. Numerous Democratic lawmakers in both Houses of Congress have signed letters calling for recurring stimulus checks to be included in the next bill.
More calls for Child Tax Credit extension
As the Democrats prepare to offically introduce the next major economic legislation of the Biden administration a number of senior lawmakers in the Party have made some demands on what it should contain. The expanded Child Tax Credit programme has been particularly well-received, despite the fact that it is not scheduled to begin until July.
Sen. Michael Bennet has called on Biden to include the extension in the upcoming American Families Plan, the $1.5 trillion package first announced last week. The provision is expected to halve the number of children in poverty over the course of the next year.
GOP threatens legal action for stimulus bill passage
Wisconsin Gov. Tony Evers has confirmed that he expects to face legal action from the Republicans for the use of federal funding to support the state's struggling businesses. The recent stimulus bill provided much more than just stimulus checks and Evers announced earlier this week that he will use $420 million from the American Rescue Plan to fund the Wisconsin Tomorrow Small Business Recovery Grant Program.
NPR Milwaukee report: "Firms with annual gross revenue between $10,000 and $7 million will be eligible for $5,000 apiece. The state says about 84,0000 firms may potentially qualify."
Biden's covid approval rating remains high despite stimulus spending
Before taking office President Biden pledged to rule by consensus, but soon moved away from that ethos as he pushed through the $1.9 trn American Rescue Plan without a single Republican vote. The package included the third stimulus checks and an expanded Child Tax Credit, both of which have been very popular.
It seems that the direct support offered by the stimulus bill has prevented Republican voters from turning on Biden and he still enjoys positive approval ratings for his handling of th pandemic.
Bernie Sanders calls on Biden to expand Medicare age range
Bernie Sanders has sent a letter to Joe Biden, asking the president to lower the eligibility age for Medicare and expand the range of services it offers to include dental, hearing and vision care. He cited a Gallup poll which showed that 65% of Americans were in favour of reducing the Medicare eligibility age from 65.
"I sent a letter with 16 of my colleagues today asking President Biden to propose in his American Families Plan the most significant expansion of Medicare since it was signed into law to improve the lives of millions of Americans," Sanders tweeted. The letter was signed by 16 other senators including Elizabeth Warren, Debbie Stabenow, Benjamin Cardin and Richard Durbin.
What happens if my stimulus check hasn't arrived?
If you still haven't received your your stimulus check, the IRS advise to use the Get My Payment tool to find out when it is scheduled to be sent, or when and how it was sent. The Get My Payment page updates once a day, usually overnight. The IRS cannot deal with stimulus requests through their helplines but if you still have an issue that cannot be resolved through using the Get My Payment tool, you may have to request a payment trace with the IRS, however, such an option will be a lengthy operation.
Who isn't eligible for a stimulus check?
The IRS has sent out around 161 million stimulus payments to Americans for a total value of more than $379 billion during the past six weeks, but not everybody is entitled to a check. There are several reasons why you may not be eligible to receive a stimulus check - perhaps your income is over the limit, maybe you are under the qualifying age (16), or don't qualify because you don't have a valid Social Security number.
If your annual salary is above $80,000, then you will not be eligible for a stimulus payment. Nor will you receive one if you are claimed as a dependent on someone else's tax return. All immigrants who are classed as non-resident aliens cannot receive a check. Another reason why you might be excluded is if the Internal Revenue Service (IRS) have no information about you on file.
Republicans planning to sue over federal stimulus money
Wisconsin Gov. Tony Evers confirmed that the GOP are plotting to take legal action against the government over federal stimulus money. He told WISN: "This legislature has made that part of the DNA. There could have been hundreds of millions of dollars spent incorrectly because it wasn't part of the Recovery Act. We just need to get money out the door, if they want to spend their time messing around, they'll be spending taxpayers' money to prevent taxpayers getting money".
Homelessness can claim Economic Impact Payments
While stimulus checks are automatically available to most people, the IRS cannot issue a payment when contact information isn't available in the tax agency's system. However, the agency is helping those of no fixed abode to get their stimulus checks.
People can claim a stimulus payment and other credits even if they don't have a permanent address. Anyone who is currently homeless can list the address of a friend, relative or trusted service provider, such as a shelter, drop-in day center or transitional housing program, on the return filed with the IRS. If they are unable to choose direct deposit, a check or debit card for the tax refund and the third Economic Impact Payment can then be mailed to this address.
Two thirds of stimulus checks spent on essentials and bills
For the most part, Americans have been spending their stimulus checks on essential goods or costs such as rent and utility bills, according to a recent survey by Bankrate.com.
More than 6 in 10 Americans believe the $1,400 won’t last them longer than three months, while 34% say the extra funds won’t even last them one month, the survey found.
And 39% of respondents say they are postponing anything that involves major expense such as buying or leasing a car, buying a home, getting married, having a child or other significant moves.
Paid leave for employees receiving Covid-19 vaccines
The IRS announced details of tax credits available to help small businesses, including providing paid leave for employees receiving Covid-19 vaccinations.
Eligible employers, such as businesses and tax-exempt organizations with fewer than 500 employees and certain governmental employers, can receive a tax credit for providing paid time off for each employee receiving the vaccine and for any time needed to recover from the vaccine. For example, if an eligible employer offers employees a paid day off in order to get vaccinated, the employer can receive a tax credit equal to the wages paid to employees for that day (up to certain limits).
"This new information is a shot in the arm for struggling small employers who are working hard to keep their businesses going while also watching out for the health of their employees," said IRS Commissioner Chuck Rettig. "Our work on this issue is part of a larger effort by the IRS to assist the nation recover from the pandemic."
Education through stimulus
In the state of Georgia we have seen another example of how the stimulus funding is aiding education efforts.
The Forsyth County School system is using its third round of federal stimulus money to provide a bonus to employees, support the summer school program and upgrade air quality systems at two elementary schools.
How stimulus payments are increasing rent prices
Americans are paying more to rent homes again, ending a stretch during the pandemic when they enjoyed flat or falling rental prices and widespread landlord concessions.
Federal government stimulus payments and expanding payrolls are boosting savings, enabling building managers to lift rent prices on apartments and houses nationwide. A record-low inventory of homes for sale also leaves more people renting.
Median asking rent rose 1.1% on an annual basis in March to $1,463 a month across the country’s 50 largest markets, according to a report from Realtor.com. That marked the first month where the pace of rent growth had increased since last summer, the report showed.
Stimulus and markets: Wall Street stock surge as some point to rough time ahead
Some of Wall Street's biggest names are predicting a pause in a rally that has taken the S&P 500 to fresh records this year, leaving investors trying to determine whether to lock in some of the breathtaking gains or stay the course, Reuters reports.
Among the most recent has been Goldman Sachs, whose analysts on Wednesday said an expected second-quarter peak in US growth could be tied to weaker stock returns. Morgan Stanley earlier this week warned stocks would soon face headwinds. Deutsche Bank this month called for a pullback of as much as 10% in the S&P 500 as growth decelerates, and BofA Global Research backed a year-end target for the index about 8% below current levels.
A comparatively long period without a serious drop in stocks has also made some investors uneasy. The S&P 500 has declined at least 5% every 177 calendar days, according to Sam Stovall, chief investment strategist at CFRA. The latest market advance has lasted 211 days without such a drop.
"I wouldn't be surprised to see some kind of pullback for no particular reason other than people start to think maybe this is a little bit ahead of itself," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
The flurry of warnings present a conundrum for some investors. While many would like to protect profits from the market's 85% run since last year's pandemic low, pullbacks over the past year have been difficult to time and followed by sharp rebounds, bolstering the case for holding on and buying more when stocks dip.
The S&P's two significant declines since March 2020 have averaged a drop of around 8%, lasting 12 days on the way down and taking 45 days to regain lost ground, according to Stovall.
In both cases, the market went on to new highs weeks later, a pattern some have attributed to unprecedented monetary and fiscal stimulus buoying investor confidence.
"Since the bear market of March of last year, buying dips has been handsomely rewarded," said Randy Frederick, vice president of trading and derivatives for Charles Schwab.
Since the lows of the Great Financial Crisis, the index has climbed 511%, despite five drops of 10% or more and the 34% fall last March, offering investors another argument for buying and holding.
Nevertheless, some are bracing for potential turbulence, reflecting concerns ranging from rising covid-19 cases, and worries that most of the economic benefits from massive fiscal stimulus have already been priced in. On Thursday, sources said the White House will propose nearly doubling capital gains taxes for the wealthy.
Stimulus pushing construction
"The federal government has put a lot of money into the economy and there are low interest rates, so businesses are willing to make a long-term investment in a building."
Construction and remodeling is a booming business currently and the covid-19 pandemic has something to do it with it.
While local contractors said people often do such projects in the spring, the available funding to do so is more than usual. This includes stimulus money for individuals and CARES Act funding for government agencies leading to capital projects or freeing up other money for such projects. Bill Dunfee of Cross Builders said he knows when new stimulus checks hit, because he starts getting calls for home improvements.
Stimulus still CAREing
It may feel like a lifetime ago but the CARES Act is still playing its part in helping many struggling families.
Rep Josh Gottheimer highlights what is available from May.
Biden's stimulus spending and the midterm vote
Judging by his unusually large budget stimulus package so early in his Administration, it would seem that Joe Biden does not subscribe to Clinton’s view. While to be sure Biden’s budget stimulus promises to deliver this year the US economy’s best growth performance in the past fifty years. It also risks being followed by a nasty economic hangover in the run-up to next year’s November midterm congressional elections.
It would be a gross understatement to say that Biden can ill-afford any setback in next year’s midterm elections. With a slight Democratic majority in the House and an evenly split Senate, the most minor of electoral setbacks next year could render Biden a lame-duck president in the remainder of his four-year term. It could do so in much the same way as Barak Obama’s shellacking in the 2010 midterm elections rendered him a lame duck in the remainder of his presidency.
Desmond Lachman has a look at the stimulus impact on voters.
US stimulus outlay has been huge
Mahir Zeynalov, the CEO at Globe Post Media, reminds us of the massive US stimulus response to the pandemic.
"It is larger than the entire economic output of Japan and Germany (3rd and 4th largest economy), almost double the GDP of the UK (5th biggest), France (6th), India (7th) and Italy (8th).
"No country can come even close to compare in government aid," he concludes.
Stimulus checks christened "Joe-Joe Bucks"
The Washington Post's White House economics reporter Jeff Stein has broke a number of big stories related to the stimulus check payments in the past year, but this one may beat them all. Stein's Washington barber has apparently renamed the direct payments as "Joe-Joe bucks", paying respect to President Biden.
Stimulus checks? Stimmies? Economic Impact Payments? We can now add "Joe-Joe bucks" to the list.
The desire for recurring stimulus checks has been pushed hard by progressives in the Democratic party and in January a group of over 50 Representatives sent a letter to the Biden administration to call for additional direct payments. The letter read: “A one-time payment of $2,000 is simply not enough. The American people are counting on us to deliver transformative change, and we need to meet the moment by delivering monthly payments of $2,000.”
In March, legislation that was presented last year at the beginning of the pandemic was reintroduced in the House by Representatives Pramila Jayapal and Rashida Tlaib. The Automatic BOOST to Communities (ABC) Act would see a fourth stimulus check payment of $2,000, followed by $1,000 monthly payments until the pandemic ends.
Stimulus spending paid for by top earners
President Joe Biden is reportedly preparing a series of tax increases for the welathiest Americans to cover federal spending on stimulus checks and Child Tax Credits, amongst other things. The White House is aiming to pass another $4 trillion of stimulus spending, on top of the $1.9 trillion American Rescue Plan passed earlier this year.
The tax increase are only thought to effect those who earn more than $1 million per year.
Stimulus checks prompt spending increase
Aside from providing immediate relief for those in need, the stimulus checks distributed by the federal government were also designed to reinvigorate the flailing economy by introducing a sizeable cash influx.
Despite early projections suggesting that many intend to save their stimulus check, evidence has shown that the federal spending has had a positive impact on consumer habits with a marked increase on last year.
Missing a stimulus check payment? You're not the only one
The IRS is sending out weekly batches of $1,400 stimulus check payments and will do so through the end of the year. As the IRS processes 2020 tax returns, they will make corrections to underpayments along with first time payments to individuals who don’t normally file taxes.
This was week 6 of the payments and so far the IRS has sent out around 161 million payments for a total value of more than $379 billion. But there are many eligible Americans who have not yet received the direct payment, with 'plus-up' stimulus checks required to get the full entitlement out to those in need.
Elizabeth Warren to reintroduce $700 billion universal child care proposal
Massachusetts Senator Elizabeth Warren is set to put forward a proposal for universal child care which promises at least $700 billion over the next 10 years dedicated to modernising the US child care infrastructure.
Warren aims to guarantee universal child care and improve child care workers’ wages, which are on average well below $13 per hour.
Florida farmers using stimulus checks to grow food for their communities
Michael Chaney is one of the instigators of the #1400challenge - an initiative which encourages using stimulus payments to help local communities by pooling resources. Impact payments go towards collective projects such as soundsystems, meshnets, pop-up dwellings, community gyms and growing food locally for the community.
For Chaney, that meant using the stimulus money he received from the government cash to turn his 0.3 acre lawn into a garden plot and community space which he calls New World Growers, vice.com reports.
As part of the third round of stimulus checks, the Internal Revenue Service (IRS) is sending out supplementary cash injections known as ‘plus-up’ payments to qualifying Americans.
‘Plus-up’ payments are being distributed to taxpayers whose third stimulus check had already been automatically calculated and sent out using the income information in their 2019 federal tax return, but who are now entitled to a larger check based on the earnings detailed in their recently-processed 2020 return.
Find out all you need to know.
US stimulus checks live updates: welcome
Welcome to our live stimulus-checks blog for Sunday 25 April, bringing you the latest news on a possible fourth stimulus check, as well as up-to-date information on the third round of direct payments, which is a part of President Joe Biden's $1.9tn covid-19 relief bill.
We'll also provide info on other measures included in the aid package, such as enhanced unemployment benefits and the expanded Child Tax Credit, which gives households with children up to $3,600 per child dependent.