Fourth stimulus check summary: 17 June 2021
US stimulus checks news: Thursday 17 June
Many lessons have been learned from the covid-19 pandemic induced economic crisis. One that direct payments were beneficial to many American households and kept the economy from completely tanking. Another that our unemployment system is outdated for the 21st Century.
The idea is being floated to create “automatic stabilizers,” relief programs that would kick in should certain economic circumstances become present.
Continuous stimulus helped accelerate US recovery
According to Moody Analytics and CNN, our country is 88% back to its pre-pandemic economy with expectations accelerating when the economy will be fully recovered. Instead of one-off temporary solutions to past economic, the covid-19 crisis saw the federal government injecting continued stimulus money into the economy and households, and thus back into the economy again.
Some came out of the pandemic is much better shape than others, able to save money from the direct payments. Others managed to pay down their debts freeing them from an extended financial albatross. Both factors are giving them the able to spend more now letting that money reenter the economy as it reopens.
Throughout the pandemic the federal government has provided various forms of financial relief to help Americans dealing with the economic fallout. The three rounds of stimulus checks and the additional unemployment payments have been particularly popular, but they are far from the only support on offer.
A little-known programme in the recent stimulus bill provides additional support for homeowners struggling to cover the cost of mortgage repayments.
Democrats signal that they are giving up on extending $300 weekly federal unemployment boost as states move to end benefit before September cutoff date.
Louisiana will become the first Democrat-led state to end weekly $300 federal supplement to unemployment compensation. Meanwhile, in Congress advocates for the extra benefit see extending them beyond September as unattainable in the current political situation and given the latest economic data.
Instead, Democrats may try to fix the patchwork unemployment insurance system across the United States. A proposal by Senate Democrats would overhaul the country’s unemployment system in the wake of the shortcomings laid bare by the covid-19 pandemic.
Families may want to gauge whether to wait to receive 2021 Child Tax Credit
The IRS will automatically enroll all eligible families in the advance Child Tax Credit monthly payments set to begin 15 July. The agency will send two letters in the coming weeks, one to tell families they are likely eligible and a second personalized one to inform them the calculated amount they will receive each month. For some families they may find it better to wait to receive the credit as a lump sum when they file their 2021 tax return next spring.
Why opt out of receiving extra money every month? Overpayments for some families will mean a smaller refund or even possibly having to return the money next spring. The IRS will be launching two online portals by the end of the month that will let families calculate how much they could receive and another to unenroll from the advance payment portion of the program.
The Internal Revenue Service announced on Monday that it has brought back the Non-Filer tool that was first created last year to help taxpayers who don’t normally report income claim their $1,200 stimulus check. The updated version will allow those who still haven’t filed a tax return or used the tool before, to register for the 2021 Child Tax Credit and obtain any stimulus money they haven’t received yet.
Long road ahead for infrastructure bill
Despite agreeing to an initial framework for a bipartisan infrastructure bill, the actual bill will still need to be written. Ten Democrats and eleven Republicans in the Senate are onboard with the potential deal. Having eleven GOP senators would be crucial to getting the bill through the upper chamber without using reconciliation. But the group still hasn’t released the full details of their $1 trillion agreement.
Even if the bill gets through the Senate, it could still face an uphill battle in the House with the climate fighting provisions of Biden’s American Jobs Plan left out. Progressives in the lower chamber could sink the legislation for not being ambitious enough. The final hurdle will be whether President Biden who’s been away this week has yet to weigh in on what the senators are proposing.
All this with some accusing the Republicans on running out the clock to stymie President Biden’s and the Democrats agenda.
Louisiana first Democrat-led state ending federal unemployment compensation
Governor John Bel Edwards signed a bill on Wednesday which will end jobless Louisiana residents receiving an extra $300 in unemployment benefits in exchange for raising the maximum unemployment compensation laid off workers can receive. The federal weekly enhancement to benefits will end 31 July while the increase of $28 a week in unemployment benefits will start in 2022.
The Governor had planned to end the $300 top-up before the 6 September expiration date. Citing that the federal cutoff is set to coincide with schools reopening his decision is "keeping the spirit of that," with schooling in the state set to start up again in August.
Louisiana now joins 25 GOP-led states that have already announced they will end one or all of the federal unemployment compensation programs first set up in the CARES Act in March 2020. Four states; Alaska, Iowa, Mississippi and Missouri, have already ended their participation in the $300-a-week benefit program. Seven more states will stop paying the extra unemployment compensation on Saturday.
How does the bipartisan infrastructure bill compare to Biden's American Jobs Plan?
New information has become available on what will be included in the bipartisan infrastructure bill, gaining support in the Senate. How does it compare to Biden’s plan?
The investments proposed in the plan are not so different from those proposed by President Biden.
The main difference is in price, and the fact that the Senate proposal does not include any funding for what the President has referred to as "social infrastructure." The social investments include improving the working conditions and wages of workers involved in the care economy, and more.
When comparing the two proposals based on their investments in physical infrastructure, that main difference is price. For each of the various areas, the American Families Plan has a higher price tag.
With the information available as of 17 June, a 721 billion dollar gap, can be identified as far as physical infrastructure is concerned. The gap is motivated primarily by the lack of funding for public housing, schools, and Veterans Affairs hospitals in the new proposal.
Areas, where the largest gaps exist, include rail and freight infrastructure where the President proposed $66 billion more than the group of Senators. The differences between the proposals related to access to clean water and broadband also totaled more than $60 billion.
Read our full coverage for a breakdown on how much each plans will spend on various types of infrastructure, as well as how how plans to fund the proposals vary.
On 19 June, Indiana will be ending the payment of federal pandemic related unemployment benefits. Elizabeth Warren shares her opinion on an emerging law suit that CNN has reported on. The reporting details the suit filed by Indiana Legal Services and a private employment law firm, who "argue that the move violates a state law that requires Indiana to "procure all available federal insurance benefits to citizens," according to the firms."
NPR reports that after a steady decrease in the number of unemployment claims made in the US over the last five weeks, the Bureau of Labor Statistics reports that last weeks claims increased. Although this may seem concerning, the reporting states that "many economists expect hiring to catch up with demand in the coming months, especially as federal unemployment aid programs end and more people pursue jobs."
According to report from BLS, "The largest increases in initial claims for the week ending June 5 were in Illinois (+5,715),Ohio (+2,296), Delaware (+1,720), and Tennessee (+1,159), while the largest decreases were in Pennsylvania (-23,633), California (-19,120), Oklahoma (-3,788), Texas (-3,299), and New Jersey (-2,985)."
What is included in the bipartisan infrastructure bill?
Politico has published a Factsheet on what will be included in the emerging package. While the list contains similar items to those included in Biden's American Jobs Plan, the overall sticker price on the investments is lower.
What does the president think of the bipartisan infrastructure bill?
Washington Post White House reporter Jeff Stein reports on discussions in side the White House of the bipartisan counter proposal on infrastructure.
BREAKING: Senate Majority Leader Chuck Schumer to meet with members of his party supporting the bipartisan infrastructure bill.
How do I report my retirement on my income taxes? Do I need to file Form 5498?
No. The financial institution that manages your IRA submits this form which includes information related to “contributions, including any catch-up contributions, required minimum distributions (RMDs), and the fair market value (FMV) of the account,” for each individual they manage a portfolio on behalf of.
A 2019 study conducted by the Pension Rights Center found that only around 37% of private sector and government workers had a retirement or pension plan.
How can employers encourage those who work for them to save for retirement?
People cannot, and should not, work for their entire lives. In the US, most workers retire at around 65 when they have saved enough money to sustain themselves. Additionally, most seniors receive social security benefits from which they have paid into throughout their careers. For those who have been able to save their own money, through a retirement fund or pension, social security benefits help to increase the total income they will be paid each month for the rest of their lives.
However, with such a vast sum of workers lacking access to retirement programs, the burden on the social security system is growing. Additionally, American’s are living longer and a study from the Employee Benefit Research Institute found that 40 percent of workers will exhaust their personal retirement savings before they die.
Brookings released a new report showing “50 million Americans are working full-time without any workplace saving beyond Social Security.” To combat this issue, researcher Joshua Gotbaum, suggests that the government make employers automatically enroll their employees “in a payroll savings plan (from which they can opt-out).”
BREAKING: As more than. a fifth of Senators now support Susan Collins' infrastructure plan, President Biden tries to calm members of his party who are hoping to pass a larger package that includes funding to provide benefits to workers in the care economy and to fight climate change.
Does the new bipartisan infrastructure plan include stimulus checks?
In an interview with Face the Nation on Sunday, Maine Senator Susan Collins spoke about the new bipartisan infrastructure bill she is leading, which she described as “targeted” and “responsible.”
The proposal represents a counteroffer to the 2.3 trillion dollar American Jobs Plan, which has been put forward by the Biden administration. The largest component of the emerging package would be an investment of over 500 billion dollars in physical infrastructure. The proposal scraps the majority of social spending that Biden includes in his proposal. However, many within the Democratic caucus oppose the new proposal because they support those social programs and polling has shown that the American people do too.
So far, the package does not include funding for an additional stimulus check.
Read our full coverage for details on how a check could be included and information on which Senators support the bill.
What has Federal Reserve Chairmen Jerome Powell said about inflation?
Officials from the Federal Reserve -- the US Central Bank -- have met this week to discuss and plan the next steps as the economic recovery continues. In a press release put our by the organization yesterday, 16 June, projections to inflation were increased and more information was provided on how the bank will apply quantitative easy practices.
During the meeting, participants were asked to provide projections on, "the most likely outcomes for real gross domestic product (GDP) growth, the unemployment rate, and inflation for each year from 2021 to 2023 and over the longer run." These projects are based on the information available as well as their individual perspective on what "appropriate monetary policy—including a path for the federal funds rate and its longer-run value—and assumptions about other factors likely to affect economic outcomes."
Most of those who participated in the meeting estimated that GDP would rise more than seven percent this year, followed by increases around 1-3 percent over the next three years.
The officials estimated that unemployment would reach pre-pandemic levels in 2023, but could move up slightly in the long run.
Inflation has been a major topic of conversation in economic circles lately. The projections from the meeting show that most present believe inflation will rise around 3% this year, but return to normal levels next year and into the future.
See all projections and models here.
What could the Fed to do lower inflation?
The main tool used to lower inflation is to increase interest rates. By increasing interest rates, the price of borrowing money increases which usually leads to a decrease in the money circulating throughout the economy. Inflation can be an indicator that too much money is flowing, causing prices to rise artificially which can send markets into chaos. However, abrupt changes to interest rates often impact the most economically vulnerable people as businesses and the government tighten their wallets and less money becomes available.
Why haven't I received my tax refund?
Still waiting on. your tax return? You are not alone. Various delays have millions still waiting on their return. Read our full coverage on these issues by William Gittins to see if there are any actions you can take to speed up the process.
Does the IRS have an application to check the status of your tax refund?
Yes. If you are looking for a secure way to check the status of your refund, and manage other tax information, look no further.
Questions on the recent changes made to the Child Tax Credit?
Watch this explainer video put together by the Internal Revenue Service.
For more information see our recent coverage on when families can expect to receive payments:
Climate and the Biparistisn Infrastructure Bill
While the bipartisan infrastructure plan gains momentum on Capitol Hill, New Republic reports that climate advocates are calling for negotiations to be ended. Both Senators from Massachusetts, Elizabeth Warren and Ed Markey have withheld their support for the new infrastructure bill circulating in the Senate as it leaves out spending on climate.
In a press conference on Tuesday, Ed Markey argued that Democrats "cannot let Republican calls for bipartisanship deny the American people the climate action they have been demanding.” Markey has introduced various climate packages, including a cap and trade and trade bill the died after years of delays and the Green New Deal has made his position on the bill clear -- "No Climate, No Deal!"
Support for more stimulus checks among lawmakers peaked in May as an additional group on Capitol Hill sent a letter to the President urging him to include a fourth and even fifth payment in his American Families Plan. The House Ways and Means Committee signatories cited the public support for the measure and how “direct payments and enhanced unemployment insurance (UI) in particular have served as lifelines to families and workers that have had their lives upended by the pandemic.”
In response to the letters and questions from the media, the White House has said that they will not be a roadblock in passing additional stimulus checks. Still, they have stated that the President is more focused on getting his greater economic agenda passed.
Vast majority said stimulus checks improved their financial health
In a recent study released by doxoINSIGHTS 95% of those questioned said that the three rounds of stimulus checks had made a notable improvement to their finances during the pandemic. The White House has been tight-lipped on the prospect of a fourth stimulus check but there is a clear desire across the country for further direct support.
Jim Kreyenhagen, doxo’s Vice President of Marketing and Consumer Services, said of the findings: "While stimulus relief may have seemed short term, our surveys of household bill payers throughout the last year have indicated support from Americans, and a strong signal they used the money to improve their financial health."
The IRS have confirmed that the new Child Tax Credit programme will begin next month when the tax authority starts distributing the monthly payments from 15 July. The are high hopes about the impact that the new system can have, but it had been difficult for some households to register for the direct payments.
As was the case with the past three rounds of stimulus checks, eligibility for the federal support will largely be based on information provided in your most recent tax return. The payments will arrive automatically for most recipients but some low-income households may have to use the IRS’ new non-filer sign-up tool to ensure they get the payments.
Americans can still claim stimulus checks
The IRS recently brought the "Non-Filers" online tool back to life with more options for Americans who aren't required to file a tax return. The new online portal will allow those who haven't filed a 2020 tax return or used the previous version of the tool the chance to claim stimulus checks that they missed out on, and for parents to sign up for the enhanced 2021 Child Tax Credit that will begin direct payments on half the credit in July.
Reasons people are still looking for their stimulus check
The US government has sent out three rounds of stimulus checks with eligible adults receiving up to $3,200 each in total over the past year. The majority of Americans got at least some stimulus money, but no everyone got a stimulus check. There are several reasons that you may not have gotten the full $3,200 or your child didn’t get the full $2,500 that was possible.
Each round had similar thresholds where the amount of money would begin to phase out but how fast it did to zero was different. But in order to receive any stimulus money, the IRS had to know your financial situation and where to send the funds.
To find out why you might not have received the full amount click here.
How to get updates on your outstanding stimulus check payments
The IRS is continuing to make stimulus check payments for the rest of 2021, working through the outstanding tax returns to find anyone who may be entitled for another payment. Those who suffered a loss of income during 2020 may find that they are now eligible for a larger payment and a supplementary 'plus-up' stimulus check payment could now be on its way.
Stimulus checks provide boost for black-owned businesses
Economics researchers have found that the stimulus checks have not only helped individuals and families cover the most immediate costs like food, rent and childcare, but has also helped many entrepreneurs set up their own businesses.
The report found that the stimulus checks were particularly effective for businesses set up in black neighbourhoods, offering the crucial start-up capital that can sometimes be hard to find. This will strengthen calls for a fourth round of stimulus checks and shows that the payments can influence the economy in countless ways.
Stimulus checks live updates: welcome
Hello and welcome to our live stimulus checks blog for today, Thursday 17 June 2021. We'll be bringing you updates on a possible fourth direct payment, in addition to information on the third round of checks, which has seen around $395 billion go out to eligible people in the US.
We'll also be providing news on other economic-aid schemes such as the expanded Child Tax Credit, which will see monthly payments of up to $300 distributed to qualifying households.
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