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Fourth Stimulus Check: is the new payment in jeopardy?

With Republican opposition to more stimulus growing, the prospects of a fourth direct payment being sent are unlikely. However, Democrats continue to push.

Fourth Stimulus Check: is the new payment in jeopardy?

After sharp increases in consumer spending in March, many economists expected that the April numbers would follow the positive trend. They did not. In March, spending increased by 4.7%, fueled by the delivery of the third stimulus check. In April, spending slowed, rising by less than one percent. The only two sectors that saw increases in consumer spending in April were gas stations and food service.

These concerns over household spending have led some Democratic lawmakers to push for the sending of a fourth -- and in some cases fifth -- direct payment. Over eighty Democrats on Capitol Hill have publicly supported the measure. Most recently, seven Democrats from the House Ways and Means Committee sent a letter to President Biden, urging him to include another round of payments in his American Families Plan. The letter’s signatories argued the “$1,400 checks alone will keep 11 million people out of poverty this year, with UI expansion and other provisions in the bill accounting for the another five million. A fourth and fifth check could keep an additional 12 million out of poverty.”

This comes after a similar letter was sent by twenty-one senators, including Bernie Sanders and Elizabeth Warren, in April. The White House has responded by saying that they believe the choice to send another check stands with Congress and that they will follow the lead of lawmakers.

When could another stimulus check be sent?

Currently, the White House is focused on negotiations with Republicans on the major infrastructure bill, dubbed the American Jobs Plan (AJP). The AJP does not include funding for an additional stimulus check. So far, the negotiations have not been fruitful. Whether or not Democrats can convince ten Republican Senators to support the multi-trillion-dollar proposal will determine how the AJP can be passed; and if they will have the option to pass legislation that includes an additional direct payment.

If the Democrats can receive the ten votes necessary to overcome the filibuster in the Senate, they will pass the AJP through normal rules. However, if they cannot find support from the Republicans, Democrats could pass the proposal through budget reconciliation.

What is budget reconciliation?

Many in the US are unaware of the Senate Filibuster, which requires a sixty vote majority for a most bills in the legislative body to pass. Budget reconciliation is Senate parliamentary rule which allows bills dealing directly with spending, revenue, and the federal debt limit to be passed with a simple majority.

A recent poll released by Monmouth University found that about twenty percent of respondents wanted to eliminate the Senate. The poll also found that while many that responded stated that they were “very familiar” with Senate procedures, some provided contradictory information. The results bring to light the misconceptions and confusion that surround law-making processes in the US.

Each fiscal year, Congress is allowed to two bills through reconciliation. This year, the Senate Parliamentarian, an appointed official who helps navigate the Senate’s rules, cited Section 304 of the Congressional Budget Act of 1974 to determine that a third bill could be passed through reconciliation as long as it related to spending or revenue. The American Rescue Plan was passed through reconciliation, meaning that the Democrats only have two more opportunities to use the tool.

How will the American Jobs Plan be passed?

Conservative Democrats like Joe Manchin of West Virginia have stated that as long as meaningful efforts are made to try and negotiate with Republicans, he would support passing the AJP using budget reconciliation. Support from Manchin means that the bill is not dead on arrival after it passes the house, which is expected in July.

If budget reconciliation is used to pass the AJP, Democrats would still have one last opportunity to use the tool to pass the American Families Plan. Most policy analysts believe it is more likely that the fourth stimulus check is included in the plan focused on families. While there are many benefits that could support the economic resilience of households in the plan, a fourth check is not currently factored in.

Republicans are unlikely to support sending more stimulus as many have come to support the idea that all the government assistance passed is discouraging those unemployed from resenting the workforce. This June, more than half of states will end all additional federal unemployment benefits hoping that more workers will begin to return to work.