Fourth stimulus check and Child Tax Credit summary: 6 August 2021
Stimulus check, CTC and infrastructure: updates on Friday 6 August
One week ago, President Biden said inflation was “temporary," and that spending trillions more would “reduce inflation, reduce inflation, reduce inflation.” Mr. President, with all due respect—WAKE UP.
Democrats want to spend trillions upon trillions of dollars. This reckless spending is what is driving inflation. Republicans need to hold the line against this spending that is hurting working families across this country.
Republican politicians have come out to criticise what they see as the Democrats' excessive spending as the US navigates its way out of the pandemic.
The GOP pushed for lower stimulus checks and helped tank the proposed $15 minimum wage back in March.
I understand the concern of all governments to protect their people from the Delta variant. But we cannot accept countries that have already used most of the global supply of vaccines using even more of it.
Pharmaceutical companies are gearing up for a third dose of their vaccines before winter. Moderna and Pfizer recently published their second-quarter financial reports, in which both revealed the tests they had been running on a third dose. Tests for a third jab reportedly give the same level of protection as someone who received the original two does for the first time.
However, the WHO has criticised the plans, saying the global south needs more vaccines before the strong economies purchase even more. Only 1.1% of low-income countries populations have had just one dose.
Are Native Americans taking up the Child Tax Credit?
The National Law Review has published an article urging tribal leaders to recommend the CTC to members of their community who may not be aware of the programme.
People who haven't filed a tax return in the last two years need to use the non-filer section of the IRS portal to make themselves eligible for the money.
The Native American population has good reason to be distrustful of the US government after centuries of discrimination and this won't have been helped by the emergence of hundreds of deaths in Canada's indigenous schools.
Moratorium on student loan is extended to Jan 31, 2022
The current moratorium also reduced interest rates to zero, and frozen all collections efforts on defaulted student loans. The US has over a trillion dollars of outstanding student debt.
A coalition of dozens of advocacy organizations wrote to the Biden administration earlier this year, “There is a broad consensus among borrowers, advocates, industry, regulators, enforcement officials, and lawmakers that a rush to resume student loan payments is a recipe for disaster and will result in widespread confusion and distress for student loan borrowers,” they said.
The announcement will be a relief to students and families that must stomach the huge fees.
The Child Tax Credit does not affect access to other benefits.
The IRS has been reassuring people about the benefits of the CTC. The organisation has been tweeting news relentlessly to encourage those who haven't accessed the credit to do so.
In their most recent tweet, the IRS explains how accessing the CTC doesn't affect a person's right to access other benefits. This is because the CTC is not counted as income on a tax return.
Could Delta variant prompt fourth stimulus check?
Covid-19 cases are on the rise across much of the US as the Delta variant takes over. The new mutated form is estimated to cause a viral load some 1200 times greater than the original strain, making it far more infectious and the Delta variant now makes up more than 93% of all coronavirus cases, and up to 98% in some places, such as Iowa, Kansas, Missouri and Nebraska. With this, the US Centers for Disease Control and Prevention are now forecasting that covid-19 hospitalisations and deaths are likely to increase over the next four weeks, though it urges caution in interpreting these forecasts.
The upshot of this is that calls for a fourth stimulus check are now getting stronger, backed by fears that the US population is once again struggling in the face in the pandemic. There are signs in the economy of the shocks hitting the system: there was a lackluster jobs report in July, and there have been lay-offs in the manufacturing and auto industries in recent weeks.
Over 80 Congressional Democrats plus VP Kamala Harris are directly supporting a fourth round of stimulus payments, and although many did pledge that support some time ago they have not withdrawn it.
However, despite this support and the fears over the effects of the Delta variant, in terms of actually getting a groundswell of support for the fourth stimulus check it looks like Congress needs to finalise the $1 trillion infrastructure bill and fully digest its ramifications before there can be sufficient appetite for another round of stimulus payments. But if the impact of the Delta variant continues to grow, there could well be more pressure on lawmakers to help Americans in desperate need.
How can I register for the Child Tax Credit?
The IRS has admitted that many eligible families were not included in the first round of Child Tax Credit payments last month, simply because the tax authority did not have their details on file. For households not required to file a tax return, the IRS may not have had the relevant personal or banking information to make a payment.
If you think this may apply to you, you can still sign up for the Child Tax Credit to receive monthly payments potentially worth thousands of dollars over the next six months. For all the information, check out this handy explainer from the IRS...
The new-look Child Tax Credit overhauls not only the size of the payment on offer but also the way in which the money is distributed. No longer a single end-of-year tax credit, the new programme offers monthly payments for eligible families.
From 15 July the IRS began sending out the first round of recurring payments, worth up to $300 for each child under the age of six and $250 for those aged between six and 17. However receiving the money now can have an impact on your tax filing further down the line.
Next round of Child Tax Credit will go out on 13 August
The IRS is preparing to make payment for the second round of the new Child Tax Credits next week, with up to $300 going out for over 60 million American children. There is hope that this round of payments will reach even more families after issues with the distribution of the first wave. Households who do not typically file taxes were required to provide their details to the IRS separately using the Non-filers Online portal, but many failed to do so.
Stimulus checks kept 12.4m people out of poverty, study finds
The Urban Institute has concluded that the three rounds of stimulus checks served as vital short-term support throughout the pandemic. A recent study found that another 12.4 million people would have fallen into poverty if not for the direct payments.
The payments worked alongside other federal relief programmes like the additional unemployment benefits and new Child Tax Credit system. The Urban Institute found that the childhood poverty rate has fallen by 81% when compared to what it would be without any of those programmes in place, from 30.1% to 5.6%.
Child Tax Credit could be a boon for US economy
The Democrats are currently trying to secure an extension to the new Child Tax Credit payments, ensuring that the programme will continue beyond its initial 12-month duration. Congress is currently discussing the merits of a $1 trillion infrastructure package which would extend the Child Tax Credit through 2025.
However not everyone is convinced that the spending is worth it and some GOP lawmakers look set to vote against it. This report from Humanity Forward suggests that the programme will actually be worth seven times its total cost to the American economy.
The Biden administration and many Democrats on Capitol Hill have argued that the newly enhanced Child Tax Credit will cut child poverty in half this year. But, there is one major catch: low-income families have to get the money.
After the first payment was made on 15 July, the People’s Policy Project released a blog highlighting that IRS was missing information on around seven million children whose families would be eligible to receive the payment. Many of these children have parents or guardians who may not be required to file a tax return, which is how the IRS collects the information needed to distribute the payments.
Child Tax Credit boosts retail spending
The Democrats have not been shy in promoting the benefits of the Child Tax Credit expansion and the North Carolina branch of the party have announced that retail spenidng in the United States rose by 10.9% after the first round of payments was sent out. The Child Tax Credit was, unlike the stimulus checks, more focused on providing relief to families but the early signs suggest that it is having a positive effect on spending patterns too.
Despite a last-minute extension to the eviction moratorium, there is concern that the number of Americans facing eviction in the United States is a crisis brewing. The economic consequences of the pandemic have only made the picture more perilous for renters and there is concern that, once the new extension ends, millions of families could be out on the streets.
Are you still waiting for an IRS tax refund?
The tax agency has had a busy 18 months, tasked with the introduction of a number of pandemic-era programmes like the stimulus checks and new Child Tax Credit. Unfortunately this has had an impact on their ability to carry out their usual priorities and millions of Americans are now facing major delays.
The IRS announced that they had a backlog of 35 million unprocessed tax returns in July, which has resulted in a considerable wait for those expecting a refund. However you can check the status of your IRS tax refund payment using this handy online tool.
Watch out for Child Tax Credit scammers
Unfortunately throughout the pandemic fraudsters have been targeting the various forms of support offered by the federal government and attempted to take advantage of the payments. This has already been seen with the three rounds of stimulus checks and unemployment benefits, and it seems that they are now turning their attention to the Child Tax Credit.
Here's everything you need to know to stay safe..
Were you underpaid in your tax refund payment?
Throughout the pandemic the IRS has been tasked with overseeing a range of new programmes, from the stimulus checks to the reformed Child Tax Credit, so it should be no surprise that this has caused delays and issues with their usual work.
The tax agency estimates that is has already made around 9 million mathematical or clerical errors while processing the 2020 tax returns. To make sure you weren’t affected by the mistakes, check out this handy guide.
Stimulus checks had the most impact on poverty in the US
The purpose of the three rounds of stimulus checks was two-fold: both to give fresh impetus to the struggling economy; and to provide vital short-term financial relief for Americans. The long-term consequences of the huge federal spending is still unknown but research shows that the direct payments played a crucial role in keeping millions of American households above the poverty line and helping families to cover the costs of essentials over the last 18 months.
Stimulus checks on the way to frontline workers
The White House has gone quiet on the prospect of a fourth stimulus check in recent weeks, preferring to concentrate on the ongoing infrastructure negotiations in Congress instead. However a number of states are opting to implement their own direct payments for certain groups as a reward for frontline workers who have remained working during the pandemic.
In September, two-thirds of California taxpayers are expected to receive a $600 Golden State stimulus check from the state. Gov Gavin Newsom was able to pass a massive $100 billion stimulus bill after recording a huge budget surplus for 2020.
The September checks will be the second round of payments to be made and are being called GSS II. GSS II will be sent to taxpayers in the state making less than $75,000 a year. GSS I was sent after those making under $30,000 had filed their taxes. Taxpayers will also be able to claim an additional payment for tax dependents, but how much are they worth?
IRS Child Tax Credit online portal now available in Spanish
The tax agency has already found issues with the distribution of the Child Tax Credit monthly payments, struggling to get the money out to some non-filers who are not currently on the IRS' database. To help with that effort the online portal aims to make it easier for families to register for the support, and it has just been announced that it will be available in Spanish for the first time.
Infrastructure and reconciliation: "transformative for America"
Watch and listen to Labor Secretary Marty Walsh as he discusses the bipartisan infrastructure bill’s next steps in the Senate and the Democrats-only $3.5 trillion reconciliation bill.
Secretary Walsh describes both bills as “transformative for America.”
Stage set for final infrastructure bill vote on Saturday
Senator Chuck Schumer has filed closure on the infrastructure bill, meaning a vote on the bill can happen tomorrow, Saturday.
There can still be amendments put forward for the bill before then, however, and we'll be keeping a close eye on what's being said on and around the hill.
The IRS is scheduled to make the next round of payments for the Child Tax Credit on 13 August, the second such payment since the new programme was introduced in July.
The overhauled Child Tax Credit will provide a monthly payment worth up to $300 per child for those aged younger than six; while children aged between six and 17 will be entitled to a maximum monthly payment of $250. Dependents aged 18 or over at the end of 2021 will not be eligible for any support from the programme.
Will Gittins brings you the latest.
VP Harris appeals for infrastructure deal to be passed
Last Wednesday the Senate voted in favour of a $1 trillion national infrastructure plan after a deal was struck between President Joe Biden and a bipartisan group of senators. After the 67-32 victory the proposal was first presented in the Senate on Monday 2 August.
The proposal is much smaller than President Biden's $2.3 trillion proposal, the American Jobs Plan, but contains a lot of crucial policies (see below).
Majority Leader Chuck Schumer faces a race against time to get the 2,702-page legislation through Congress before the month-long recess from 9 August.
Yesterday the Vice President was again pushing its virtues.
$1 trillion infrastructure bill: what's in it anyway?
The Democratic-controlled U.S. Senate is working on a roughly $1 trillion bipartisan infrastructure bill to update America's roads, bridges and broadband networks, clearing the way for a possible vote on the package later this week.
The legislation, President Joe Biden's top domestic priority, includes $550 billion in new spending, while the rest of the $1 trillion is comprised of previously approved funding.
Here are some of the details of the bipartisan bill:
* Roads, bridges and major projects: $110 billion
* Passenger and freight rail: $66 billion
* Broadband infrastructure: $65 billion
* Water infrastructure, such as eliminating lead pipes: $55 billion
* Public transit: $39.2 billion
* Electric vehicle infrastructure, including chargers: $7.5 billion
The plan has a number of proposals to finance the spending, including the following items and the revenue gains from each over the next decade.
* Repurposing unused COVID-19 relief funds: $210 billion
* Sales of future spectrum auctions and proceeds of February 2021 c-band auction: $87 billion
* Return of unemployment insurance funds from some states: $53 billion
* Delaying Medicare Part D rebate rule: $51 billion
* Applying information reporting requirements to cryptocurrency: $28 billion
* Reinstating Superfund fees: $14.5 billion
Stimulus check news: welcome
Good morning and welcome to our dedicated stimulus check and Child Tax Credit live feed, bringing you all the latest developments from Washington as President Biden looks to pass his trillion-dollar infrastructure proposal before Congress breaks for summer.
We'll endeavour to stay across all the news and reaction as it happens so that you can find the information you need without having to go searching for it.