Fourth stimulus check news | 5 September 2021

Financial assistance for workers who lose unemployment benefits 

Millions of Americans will lose their jobless aid when the federal pandemic unemployment compensation programs end on Labor Day. It isn’t expected that all of them will immediately be reincorporated into the workforce and there will be some hard days ahead. The covid-19 relief packages created funds that struggling households can access to alleviate some of the financial difficulties. They include health insurance programs, SNAP and rental assistance. Those who are about to lose their benefits should check with their state unemployment agencyto see what programs are available in their state.

Ending unemployment benefits didn’t spur job growth 

26 state governors chose to end their state’s participation in the federal pandemic unemployment compensation programs early claiming the benefits were dissuading able workers from getting back in the workforce. They said that there were thousands of jobs that were available to be filled.

However, a comparison of job growth in those states versus similar states that kept the benefits shows that ending the federal jobless aid early didn’t have the desired result to accelerate people reentering the labor market.  

Other data show that ending the benefits early did increase hardship for residents and a decrease in consumer spending. Those enhanced federal unemployment compensation programs are due to expire Labor Day for the rest of the country, cutting income support for roughly 7.5 million people out of work receiving jobless aid.

2021 Child Tax Credit available to ITIN taxpayers with eligible children 

Taxpayers who use an ITIN to file their taxes and have children with a Social Security Number may be eligible to receive the advance Child Tax Credit Payments. It is too late to sign up to receive the third installment which will go out 15 September, but there are still three more payments before the end of the year. After that, taxpayers with eligible children will be able to collect the tax credit when they file their 2021 tax return.

WH Chief of Staff optimistic people will get back to work as unemployment benefits end 

White House Chief of Staff Ron Klain thinks “states have the tools” necessary to help people get back to work through the funding provided through the covid-19 relief. These include paying out-of-work residents bonuses to take jobs and employment training. Klain also touted that since President Biden took office more jobs have been added each month and that there are more unfilled jobs available than at any time since it’s been recorded.  

It’s estimated that 7.5 million Americans will see out-of-work income support completely disappear.

Uncertainty for millions as unemployment benefits end 

The number of people who will see their unemployment benefits cut on Monday will eclipse that of the previous abrupt cutoffs in 2003 and 2013. This comes as the federal eviction moratorium has been thrown out leaving millions at risk of being kicked out of their residence. The US also experienced a slowdown in hiring in August to its lowest level in seven months as the Delta covid-19 variant pushes up cases around the nation. Speaking to the Washington Post about the cutoff one recipient who has had difficulty finding work said “It just feels like being discarded.” 

Many business owners and politicians have blamed the enhanced federal pandemic unemployment benefits for holding people back from seeking a job. Fiona Greig, co-president of the JPMorgan Chase Institute cautioned “I worry that we’re pinning heavy hopes on the economic upside of turning off these benefits when these benefits weren’t the primary factor holding people back from returning to work, and they’re also providing an important boost to spending.”

Nine arrested in Florida for unemployment fraud 

Starting in December 2020 an investigation was begun into fraud related to CARES Act funds being stolen. The ensuing investigation uncovered $555,000 in unemployment benefits being fraudulently claimed in several states and has now resulted in nine arrests in Palm Beach County.

Questionable trades during infrastructure negotiations 

Senators and Representatives from the House are privy to information that can greatly benefit companies should a federal spending bill pass raising concerns of insider trading and ethics violations. Just such questionable actions have come to light about trades carried out by Alabama Senator Tommy Tuberville, who while the infrastructure was being negotiated bought and sold between $170,000 and $475,000 in stock and options of a mining and steel manufacturing company that would benefit from the bill.  

The Senator voted against the bill when it come up for a vote in the Senate and was not part of the negotiations, but the optics are bad according to ethics experts.

Hochul’s hands tied, no extension of federal unemployment benefits 

Speaking at a press conference in Manhattan, Governor Kathy Hochul said while the state is running a deficit it is prohibited from allocating additional funds for unemployment benefits. The state unemployment system is running a $11 billion deficit after a taxing year and a half of pandemic payouts. “We looked long and hard to find out what options are available for the people,” Gov Hochul said. 

New Yorkers who are out of work and collecting jobless aid could make their last claim for the enhanced federal pandemic benefits for the week ending 4 September.

Time running out to claim Mixed Earner Unemployment Compensation 

The enhanced federal jobless aid programs expire 6 September nationwide in the states that hadn’t already opted out early. Around 7.5 million are expected to see their benefits end. 

The week ending in 4 September was the last that those who are unemployed in California could file a claim to receive the federal income support, but a deadline is looming for one group of claimants. Anyone who has income from a part-time job and also earns a living from their own private business might be eligible for Mixed Earner Unemployment Compensation (MEUC) program which provides an additional federal benefit of $100 per week, but the cutoff to apply is 6 September. 

If you earned at least $5,000 a year in taxable income and are collecting regular unemployment insurance (UI), Pandemic Emergency Unemployment Compensation (PEUC), or extended benefits (EB). Those who receive Pandemic Unemployment Assistance (PUA) may not receive MEUC.

Robert Reich rubbishes GOP rebrand 

Members of the Republican party are calling it the party of “beer and blue jeans” and a “working class party” but Robert Reich says that’s rubbish.

Five months until student loan forbearance ends 

Those with student loans have had a break from payments and interest since March 2020. But come 31 January, 2022 the student loan forbearance, extended twice by both President Biden and his predecessor, will end. President Biden cancelled close to $10 billion in student loan debt and is studying whether he has the authority to cancel more. He is open to forgiving $10,000 in debt per student, members of the Democrat party have called for $50,000.

Warren wants IRS to go after tax cheats 

The Democrats are looking for ways to pay for President Biden’s Build Back Better plan which they hope to hash out by the end of September. The main focus is on making the wealthy and corporations pay more and their fair share. President Biden has asked for $80 billion in additional funding for the IRS to heighten enforcement by the tax agency and close the tax gap.

The IRS commissioner Chuck Rettig told Congress the tax gap, taxes that go uncollected, is around $1 trillion a year. The bipartisan infrastructure bill would give the IRS $40 billion which in turn is estimated would raise $140 billion.

"They are two entirely separate bills. They are not connected. 85%of Americans favour infrastructure. Administrations from both parties have been trying to do this for the last decade. I felt it was time to do something for the country, even though I object to everything else that the Biden administration is doing. The second bill, a totally separate bill is a reckless, tax and spending measure - massive tax increases, 3.5 to 5 trillion dollars that will wreak havoc with the most productive parts of our society. Everyone needs to remember that in February 2020, we had the best economy in half a century. This undoes everything we did four years ago. It's not just the taxes, it's how they would spend it - free this, free that - in perpetuity. Not a single Republican will vote for this package".

What will happen if Social Security funds run out?

According to finding in a new report, 'Status of the Social Security and Medicare Programs', funds destined to a number of benefit programs will run out ahead of time. Essentially, this is because the government are not raising enough through federal taxes to ensure that benefits can continue. Reserves were significantly hit by a combination of job losses, resulting in less revenue from tax plus increased benefits as a direct result of the pandemic.

Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing. As things stand, the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement and survivors benefits, will only be able to pay scheduled benefits until 2033. The Hospital Insurance (HI) Trust Fund, or Medicare Part A, which helps pay for services such as inpatient hospital care, will be able to pay scheduled benefits until 2026 after which its reserves will become depleted.

There are two ways of tackling dwindling benefits reserves - raising taxes or cutting benefits, or a combination of both.

Student stimulus - debt cancellation

Joe Biden has cancelled more student loans than any president in history. This includes:

- $5.8 billion of student loans for student loan borrowers with a total and permanent disability;

- $1.3 billion in student loan cancellation for 41,000 student loan borrowers in March;

- more than $1.5 billion in student loans through the borrower defense to repayment process for nearly 92,000 student loan borrowers; and

- another $1.1 billion in student loans cancelled through borrower defense to repayment.

Zack Friedman brings you more on the heroes and villains of the student debt cancellation.

Social Security costs to exceed revenue for first time in 39 years

Social Security payments made to retired Americans will exceed revenue the government receives from federal taxes for the first time in almost four decades. And the situation doesn't look like it is going to get any better in the coming years. According to a recent report by Social Security and Medicare Boards of Trustees, Social Security payments for retired Americans will be exhausted in 2034 — one year earlier than previously predicted. In 2020, Social Security’s trust fund reserves were $2.9 trillion at the year’s end.

Other reserves will become depleted earlier than thought. The Disability Insurance (DI) Trust Fund, which pays disability benefits, will be able to pay scheduled benefits until 2057, eight years earlier than in a previous report.

Manchin urges "strategic pause" on $3.5 trillion budget package

Senator for West Virginia Joe Manchin has requested that Democrats put President Biden's $3.5 trillion budget plan on the back burner.

In his opinion piece for the Wall Street Journal entitled, Why I Won’t Support Spending Another $3.5 Trillion, Manchin once again voiced concern that the package might cause rampant inflation. "The nation faces an unprecedented array of challenges and will inevitably encounter additional crises in the future. Yet some in Congress have a strange belief there is an infinite supply of money to deal with any current or future crisis, and that spending trillions upon trillions will have no negative consequence for the future. I disagree. An overheating economy has imposed a costly “inflation tax” on every middle- and working-class American. At $28.7 trillion and growing, the nation’s debt has reached record levels. Over the past 18 months, we’ve spent more than $5 trillion responding to the coronavirus pandemic. Now Democratic congressional leaders propose to pass the largest single spending bill in history with no regard to rising inflation, crippling debt or the inevitability of future crises. Ignoring the fiscal consequences of our policy choices will create a disastrous future for the next generation of Americans".

Hurricane Ida devastation underlines need for infrastructure investment

White House senior adviser Cedric Richmond said that the trail of destruction left by Hurricane Ida proves that funds urgently need to be ploughed into America's deteriorating infrastructure. The cost of repairing the damage cased by Ida could reach $50 billion, according to estimates by Moody's while restoring electricity in some of parts of Louisiana, one of the hardest-hit areas, could take weeks.

Richmond told ABC’s This Week programme, "These once-in-a-century storms are starting to come almost every other year. They are bigger, stronger, they wreak more havoc. If you look at New York, New Jersey and Pennsylvania. People should see what climate change is doing. We’re going to address that in our legislation. The president created this legislation over a year ago. So he was ahead of this. Now we need Congress to come along with us to protect the American people and invest in them"

GOLDEN STATE STIMULUS CHECKS

Second Golden State stimulus check: how much do dependants and undocumented workers get?

The California Franchise Tax Board (CFTB) has started distributing stimulus checks as part of Gov. Gavin Newsom’s California Comeback Plan. The $100 billion state-wide relief package aims to provide fresh impetus to the state’s economic recovery and around two-thirds of Californians will receive a direct payment.

All taxpayers who make up to $75,000 annually will be sent a payment worth $600, provided they did not receive the recent Golden State Stimulus check, and some groups who have been excluded from previous direct payments will get one this time.

Read more

How to register for the Child Tax Credit

The IRS had been criticised for failing to get Child Tax Credit payments out to low-income households but a new portal introduced by the Treasury Department aims to make that easier. Those not required to file taxes have to sign up for the Child Tax Credit monthly payments separately, providing the tax agency with the details needed to make the payment. 

Here's how to register for the support...

"We have a moral obscenity of child poverty in this country. Out of the 36 wealthiest nations, we rank fourth from last on high poverty rates.

"[The Child Tax Credit expansion] will cut child poverty virtually in half. This child allowance will put us in line with other peer nations who understand, if you invest in children, your entire country will flourish."

GOLDEN STATE STIMULUS CHECK

How many people are receiving second Golden State Stimulus check in California?

The California Franchise Tax Board began sending a new round of Golden State Stimulus payments on 27 August to the first 600,000 recipients, and around two-thirds of Californians are eligible.

Residents could see a stimulus check payment of between $500 to $1,100 depending on their income, status and whether they have a dependent.

Over the coming weeks the agency will send out new batches every two weeks to approximately 9 million Californians who filed a 2020 tax return.

Read more

What to do when the additional unemployment benefits end in California

Across the country an estimated 7.5 million people will lose access to all unemployment benefits when the federally-funded additional payments end this weekend. The United States' economic recovery appeared to stall slightly in August when the jobs market grew at a much slower rate than expected. 

However, residents of California may still be able to claim unemployment support in the form of some additional programmes funded by the California Employment Development Department. 

Read more

Democrats push the benefits of the Child Tax Credit

The expansion of the Child Tax Credit was one of the key inclusions in the American Rescue Plan, and the Democrats are eager to point to the virtues of their $1.9 trillion stimulus package. Only two rounds of the Child Tax Credit monthly payments have gone out so far, but already the impact on American families is clear. 

They found that the first round of payments alone reduced instances of childhood poverty by 25% across the United States. 

GOLDEN STATE STIMULUS CHECKS

Where is the second $600 Golden State stimulus check? How can I track its status?

Californians are in line to receive a fourth stimulus check, courtesy of Gov. Gavin Newsom's California Comeback Plan. The massive $100 billion stimulus package was funded in part by the state's record-breaking $75 billion budget surplus from the previous tax year. 

The California Franchise Tax Board (CFTB) began sending out the payments from 1 September but it is expected to take weeks for the process to be completed. 

Read more

Recurring stimulus checks could address pay imbalance

There remain many, both in Congress and across the country, who believe that additional stimulus spending is required to ensure that the United States' economic recovery does not stall.

Scott Santens, advocate for a universal basic income, believes that a monthly recurring stimulus check could replace the additional pandemic unemployment benefits, as well as providing income for those who carry out unpaid labour, such as childcare. 

"This tax cut for working families is something we should extend, not end, next year.

"And I say to all of you watching: Make sure your family, friends, and community know about this tax cut.  Send to them, as I said, ChildTaxCredit.gov to learn more about the difference this is going to make in their lives."

JOBS REPORT

How did the unemployment rate change in August? Will lawmakers extend benefits past 6 September?

Will there be additional pandemic unemployment benefits after this weekend? At the moment, it appears not. The weekly boost to jobless compensation has been in place since the very start of the pandemic but President Biden is determined to let them lapse this weekend. 

However with the jobs market recovery appearing to stall in August, he is facing mounting pressure to offer some form of additional support to help out-of-work Americans. 

Read more

New online portal makes it easy to register for Child Tax Credit

The White House is already hailing the expanded Child Tax Credit as a success, with a recent study finding that the first round of payments alone kept around 3 million American children out of poverty. However the IRS has been criticised for making it too difficult for low-income families to register for the payments. 

If you think you are eligible for the support but haven't yet received a payment, you may need to provide your details to the tax authorities. To make this process easier the Treasury Department has introduced a new GetCTC online portal where parents can sign up for the monthly support. 

California sends stimulus checks to two-thirds of residents

The California Franchise Tax Board is in the process of sending out $600 stimulus checks to roughly two-thirds of residents as part of the California Comeback Plan. Gov. Gavin Newsom's $100 billion stimulus package was signed into law in May but the CFTB has only just been able to start issuing payments. 

The Golden State is far from the only one to offer direct payments for residents and a number of local authorities have agreed to send similar stimulus checks. Take a look at our breakdown: Which states have new stimulus payments in September?

CHILD TAX CREDIT

How has the Child Tax Credit impacted household income in the US?

The expanded Child Tax Credit was designed to provide additional support for American families as they struggle through the economic fallout of the pandemic. Currently, the beefed-up programme is only funded for one year but there are hopes that it can be extended further.

The early signs suggest that it is having a positive effect on American society and has been linked to an increase in household income for July, the first month in which the payments were sent.

Read more

Pandemic unemployment benefits to end this week

Since March 2020 the federal government has been providing weekly supplements for unemployed Americans to help mitigate the consequences of widespread unemployment. Tens of millions of people lost their livelihoods due to the pandemic, but as the economy begins to rebuild the additional benefits programmes are scheduled to end this weekend.

The Century Foundation estimate that around 7.5 million out-of-work Americans will lose all of their unemployment benefits after 6 September. Without the federal boost the unemployed will have to rely on the standard state benefits programmes, which they may have already exhausted.

Biden: "America is on the move again"

The US President took to Twiiter to post a brief message about the economy with a rallying call of 'America is on the move again'.

Child Tax Credit making 'huge difference'

Expanded child tax credit makes ‘huge difference,’ parents tell Sen. Warnock in Columbus.

Full story here

Labor Day 2021

Labor Day 2021 weekend sales: Costco, Home Depot, and Target

Labor Day is fast approaching and many companies are doing deals to coincide with the holiday. Check out some of the best deals here.

Tech drives Nasdaq to record finish but Wall Street close mixed on jobs report

The Nasdaq last Friday at a new peak but the other main Wall Street indexes fell, reflecting the mixed sentiment stemming from a disappointing U.S. jobs report which raised fears about the pace of economic recovery but weakened the argument for near-term tapering.

On the final day of trading before the Labor Day weekend, both the S&P 500 and Dow benchmark posted marginal declines, tempering the former's positive weekly performance and extending the latter's run of losses to four in the last five sessions.

For the Nasdaq though, registering a fifth win in the last six sessions and a weekly gain of 1.6%, investors' support of heavyweight technology stocks - which tend to perform better in a low interest-rate environment - continues to drive it higher.

Apple, Alphabet, and Facebook all rose between 0.3% and 0.4%. "Tech has become bullet-proof," said Mike Mullaney, director of global market research at Boston Partners. "It's the anti-covid sector, where you want to be if you think covid or a lack of growth is going to be an issue."

The virus, and its impact on the pace of economic recovery, was evident in the Labor Department's closely-watched report which showed nonfarm payrolls increased by 235,000 jobs in August, widely missing economists' estimate of 750,000. Payrolls had surged 1.05 million in July.

"The number's a big disappointment and it's clear the Delta variant had a negative impact on the labor economy this summer," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

IRS promotes IP pin numbers

An Identity Protection PIN (IP PIN) is a six-digit number that prevents someone else from filing a tax return using your Social Security number or Individual Taxpayer Identification Number.

GOLDEN STATE STIMULUS

Can I receive a second Golden State Stimulus in California if I got the first payment?

The California Comeback Plan which approved a new round of stimulus checks for more residents will also see some Californians getting a second payment.

US NEWS | CALIFORNIA RECALL ELECTION

Which candidates are in the running to replace Governor Newsom?

More than 40 contenders are competing to replace California Governor Gavin Newsom, but only a handful have a chance. Here’s a look at them...

US NEWS | EMPLOYMENT

Why wasn't there more job growth in the US labor market according to reports?

The latest jobs report from August was a disappointment, missing analysts' forecasts, economists say the culprit is the surge in covid-19 cases.

Stimulus checks and Child Tax Credit live updates: welcome

Hello and welcome to our live blog on Sunday 5 September 2021, providing you with the latest updates on a potential fourth stimulus check, and information on the expanded Child Tax Credit, a scheme which so far has seen two monthly payments of up to $300 per child go out to qualifying American households.

We'll also bring you news on other economic-aid measures in the US, such as unemployment benefits and food assistance programs.