Fourth stimulus check news summary: 18 September 2021
US stimulus checks: live updates, 18 September
- California distributes another two million Golden State stimulus checks, worth $600 each (Full story)
- Rep. Ocasio-Cortez unveils proposal to extend additional federal unemployment benefits through February 2022 (Full story)
- Senior Citizens League warns of huge Social Security Cost-of-Living Adjustment increase (Full story)
- Sen. Manchin unlikely to support $3.5tr spending bill, despite Biden's efforts
- Unemployment benefits claims rise in seventeen states after additional programs expired (Full story)
- How can I register a newborn for Child Tax Credit monthly payments? (Full story)
- Some US states sending out their own stimulus payments (More info)
- Overview of the three stimulus checks passed by Congress (Details)
Useful information / links
California Golden State Stimulus checks:
- California Tax Franchise Board confirms it sent another two million Golden State stimulus checks on Friday 17 September
- Who can receive a second Golden State Stimulus check? (Details)
- When can I expect my $600 Golden State Stimulus in California will arrive? (Details)
- What state programs exist for Americans who have lost unemployment benefits? (Full details)
- IRS distributes third Child Tax Credit payment (Find out how you can opt out of monthly CTC)
Some of our related news articles:
Three stimulus checks have been sent out so far by the US government since the covid-19 pandemic began.
In 2019, the Social Security Administration (SSA) paid benefits to as many as 180 million people each month, the majority of whom were senior citizens. Congress ensures that these payments match the rate of inflation, lest people who need it suddenly have their income fall away in times of high inflation. This matching of inflation is called the Cost-of-Living Adjustment (COLA).
The Senior Citizen League, an organization that advocates for the rights of seniors, released a new projection for the 2022 COLA that forecasted an increase between 6 and 6.1 percent. For comparison, in 2021 the increase was 1.3%. The last time a COLA increase was this high was after the credit crunch in 2009. That year it rose by 5.3%.
Like so many economic changes in 2020 and 2021, the pandemic is at the forefront of the increase.
The final announcement of what the COLA will be for 2022 will be in October.
Press secretary answers questions on Build Back Better agenda
Jen Psaki was recently in a promotional video advertising what she believes the benefits of the Democrat agenda will be, if it can get through Congress.
"If you make less than $400,000 a year it won't cost you a single penny."
"It is one of the largets tax cuts in American history for working class families," a reference to the Child Tax Credit
Infrastructure bill hangs in the balance
In a bumper legislative month, the fate of both major democrat bills is far from clear.
On the right of the party, senators like Joe Manchin are determined to prevent the reconciliation bill costing as much as $3.5 trillion. On the other flank, progressives will not accept anything less.
Congressional Progressive Caucus Chair Pramila Jayapal told Politico that the majority of her coalition, which comprises 96 members, has privately shared it is prepared to thwart the infrastructure bill in protest unless it is a package deal with the Democrat-spearheaded measure.
States that ended unemployment benefits early saw no sudden boost in employment figures
Ben Wikler, chair of the Wisconsin Democrat Party, linked to his tweet an article from Axios.
The article quotes statistics from the Bureau of labor Statistics saying that states that ended federal unemployment benefits early saw August job growth at less than half the rate of states that retained the benefits.
The main Republican reasoning behind pulling out of the federal scheme early was to boost job growth, arguing that the extra benefits were keeping people out of the workplace.
11.7 million saved from poverty by stimulus checks
A recent study by the Census Bureau have suggested that the first two rounds of stimulus checks helped keep an astonishing 11.7 million people from falling below the poverty line. Without the payments, the report claims that the supplemental poverty rate could have risen as high as 12.7%.
This article from the Wall Street Journal compares the impacts that various financial support programmes had on poverty rates in the United States. Social Security was by far the most impactful, but stimulus checks were the most effective of the pandemic-era policies.
The California Comeback Plan has been hailed as the "biggest state tax rebate in history" by Gov. Gavin Newsom's office, as the state pours $100 billion of budgetary surplus back into the state's economy in the hope of boosting the recovery. The key inclusion in the massive spending package is a round of stimulus checks which could be worth up to $1,100 to some recipients.
But who is eligible for the Golden State stimulus checks, and when will the direct payments be arriving for those who get one? Here's everything you need to know...
Economists outline the benefits of Child Tax Credit
President Biden faces a tough task on his hands if he is to secure an extension of the expanded Child Tax Credit, which provides monthly direct payments to eligible families. No Replicans appear willing to support his Build Back Better agenda, despite growing evidence that the Child Tax Credit in particular could have a significant impact.
A letter signed by more than 400 economists has outlined the transformative impact that an extension could have for millions of American children. They estimate that an extension through 2025, which is what Biden is calling for, could cut child poverty in the US by 40%.
"The President is calling for the Child Tax Credit expansion, first enacted in the American Rescue Plan, to be extended. This legislation expands the Child Tax Credit from $2,000 per child to $3,000 per child for six-years old and above, and $3,600 per child for children under six."
"The expanded Child Tax Credit in the American Rescue Plan benefited nearly 66 million children, and it was the single largest contributor to the plan’s historic reductions in child poverty."
Stimulus checks on their way for two million Californians
The California Franchise Tax Board is currently in the process of distributing the next wave of direct payments as part of the California Comeback Plan. Earlier this week Gov. Gavin Newsom confirmed that the next round of Golden State stimulus checks would be going out, with around two million residents expected to receive the financial support.
In July Gov. Gavin Nesom passed the $100 billion California Comeback Plan, which included a second round of Golden State Stimulus checks which widened eligibility considerably.
Newsom's office described it as "the biggest state tax rebate in American history," and the package has been mainly funded through a $75 million state budgetary surplus.
Roughly two-thirds of California taxpayers are eligible for a stimulus check worth $600, with some qualifying families receiving an additional $500 to bring their total payment to $1,100.
Rep. Underwood echoes calls for Child Tax Credit to be made permanent
For months Rep. Lauren Underwood has been a loud proponent of the expanded Child Tax Credit, highlighting the good they the monthly payments are already doing in her district. The Illinois Congresswoman is eager to see the new fully-refundable payments made permanent in the near future.
Back in July, when the first payments were sent out, she released a statement saying: “The Child Tax Credit will deliver critical resources to families when they need it most, but let’s be clear: families need support well beyond this pandemic. I’m fighting in Congress to permanently expand these Child Tax Credit payments, so our families have the resources needed to thrive this month and into the future.”
Last month a raft of federal pandemic-related unemployment programs ended, affected nearly 9.3 million workers had claimed the benefits up to that point. The expiration of these programs will also affect roughly 26 million family and household members, many of whom are children, who rely on the jobless support for financial assistance.
August's jobs report was considerably worse than experts were expected, with only around a third as many new jobs added as had been hoped. President Biden blamed the figures on the rise of the Delta variant, but what effect has it had on unemployment claims?
Pro-Trump states the biggest beneficiaries of Child Tax Credit expansion
The partisan divide in Washington will again be crucial later this month when Congress votes on the $3.5 trillion reconciliation package put forward by Democrats to fund President Biden's ambitious agenda. The proposal includes funding to extend the Child Tax Credit monthly payments through 2025, a policy that has been generally well-received across the country.
Republicans in Congress appear unwilling to support an extension, but a recent study has found that GOP-leaning states have benefitted the most from the monthly payments. In August, the 10 states with the highest average monthly Child Tax Credit payments (Utah, Idaho, South Dakota, Alaska, Nebraska, Wyoming, North Dakota, Iowa, Kansas and Montana) all voted for Trump last year and all but Kansas have Republican governors.
US banking lobby groups oppose proposed tax reporting law
The largest US banking lobby groups banded together on Friday to make another push to kill a proposed bank account reporting law being drawn up as part of the congressional reconciliation package.
In a letter to U.S. House of Representatives Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy, the lobby groups said the proposal would create "reputational challenges" for large financial services firms, increase the cost of tax preparations for Americans and small businesses, and create serious "financial privacy concerns".
"We urge members to oppose any efforts to advance this ill-advised new reporting regime," the groups said in the letter.
"While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population."
Retail sales unexpectedly rise in August
US retail sales unexpectedly increased in August, likely boosted by back-to-school shopping and child tax credit payments from the government, which could temper expectations for a sharp slowdown in economic growth in the third quarter.
Retail sales rose 0.7% last month, the Commerce Department said on Thursday. Data for July was revised down to show retail sales declining 1.8% instead of 1.1% as previously reported.
Economists polled by Reuters had forecast retail sales dropping 0.8%. Retail sales rebounded despite an ongoing global shortage of microchips, which is forcing automakers to cut production, leading to a scarcity of inventory at showrooms.
The semiconductor crunch, which has been worsened by the latest wave of infections driven by the Delta variant of the coronavirus, primarily in Southeast Asia, is also causing shortages of some electronic goods. Congestion at ports in China is also adding to the supply bottlenecks.
Retail sales are holding up even as spending is shifting back from goods to services like travel and entertainment, though soaring covid-19 infections are likely delaying the services spending boom.
Wall Street slips on tech losses
U.S. stock indexes slipped led by major technology firms, while uncertainty over higher corporate taxes and an upcoming Federal Reserve meeting also weighed on sentiment.
The Nasdaq was the worst performer among the main U.S. indexes and was set for its worst day since late July as a batch of strong economic readings encouraged investors to pivot into economically sensitive sectors and out of tech this week.
"(It was) a volatile week and a return to value outperformance as 'buy the dip' sentiments took hold, but not enough to rescind the recent market weakness," said Louise Dudley, global equities portfolio manager at the international business of Federated Hermes.
The three major indexes are now set for weekly losses, with the S&P 500 headed for its worst two-week performance since late February.
Concerns that a potential hike in corporate taxes could eat into earnings also weighed on markets, as leading Democrats sought to raise the top tax rate on corporations to 26.5% from the current 21%.
IRS offer advice against online scams
The Internal Revenue Service and their Identity Theft Central gives taxpayers and businesses information on how to report online identity theft
Stimulus for farmworkers and meat packers
Certain groups of workers have been disproportionately badly hit by the covid-19 pandemic, including farmworkers and meat packers. Under the Consolidated Appropriations Act 2021 some $700 million has been set aside for them.
The money is "intended to defray costs for reasonable and necessary personal, family, or living expenses related to the COVID-19 pandemic, such as costs for personal protective equipment (PPE), dependent care, and expenses associated with quarantines and testing related to the COVID-19 pandemic."
The cash is going to be distributed in the form of grants to state agencies, tribal entities and nonprofit organisations to then be passed on to workers. The application process is still being developed.
Poverty in America
As part of the debate surrounding the calls for more stimulus checks, there are major questions as to why 40 million people live in poverty (which is defined as $26,496 per year) in the US. This is a fascinating look at the situation from The Economist.
As noted below, stimulus measures and federal unemployment benefits reduced poverty in 2020 in the US. What happens when all the stimulus measures run out?
How much would a Child Tax Credit extension cost?
As it stands, the expanded Child Tax Credit is set to expire next year and revert back to the old system of a single, annual tax credit. Democrats are desperate to see it extended beyond that initial period but will almost certainly have to pass a reconciliation package to do so.
Congress is set to vote on a massive $3.5 trillion reconciliation proposal later this month which would provide funding for the Child Tax Credit, alongside myriad other social and infrastructure programmes. Here's how that cost compares to the US' military spending.
Petition for recurring stimulus checks nears 3m target
A petition calling for recurring monthly stimulus checks of $2,000 is drawing closer to its 3m signature target, having collected almost 2.9m signatures to date. According to Change.org, it is among the most signed petitions in the platform's history.
Would a fourth stimulus check be a good idea?
In response to the underwhelming jobs report released last month, many have called for additional financial stimulus to be introduced to the US economy. One of the most popular methods to do so would be to introduce a fourth round of stimulus checks, in the hope that it would embolden consumers and provide a boost for businesses. However, in this short video from Vox, some leading economists explain why that may not be a good idea...
When the American Rescue Plan was signed into law in March, few focused on the Child Tax Credit expansion but it has proved extremely popular since going live in July.
This overhaul completely change the way that the credit was provided, offering a monthly direct payment for the first time, and made it far more generous than the programme which had gone before. But how long will the programme last for?
New Mexico jobless rate falls to 7.2%
New Mexico recorded an employment rate of 7.2% in August, down from 7.6% in July, and from 9.3 percent the previous year, according to the New Mexico Department of Workforce Solutions on Friday.
The state had the joint fourth highest unemployment rate in August, along with Connecticut and New Jersey.
Beware of Child Tax Credit scams
The third round of Child Tax Credit payments were sent on 15 September and several warnings have been issued urging Americans to watch for scammers looking to take advantage anxiously awaiting their payments.
"Beware of tax scammers offering help with getting advanced child tax credit payments," warns the Taxpayer Advocate Service, which has put together tips to ensure you avoid falling for such scams.
"Don’t fall for anyone making calls, sending emails, texts or direct messages, or posting on social media offering to help you apply for child tax credit benefits or offering ways to get advanced payment money quicker or get you more money through a larger child tax credit," it writes.
And never give any of the personal information to any unknown sources:
- Social Security, bank account, debit and credit card numbers or other financial information
- Home address, work address, or telephone number(s)
- Any tax return related information
The "California Comeback Plan" continues to provide relief aid in the form of stimulus checks to its residents, as part of what Gov Gavin Newsom's office is calling the "biggest state tax rebate in history". Here's how to find out if you're eligible and how much you could get.
When I hear Manchin say we can't afford to pay $3.5 trillion on an infrastructure bill, we absolutely can. We can afford twice that if we just make corporations pay their taxes."
Many parents still waiting on Child Tax Credit payments
Three days after the third round of child tax credit payments started hitting bank accounts, many parents report they have not received it nor any update from the IRS. More than 200 parents contacted CNBC Make It on Friday to say they were yet to receive the third direct payment, despite having had no problems getting the first two payments.
"Many of us are depending on that money because we are still behind due to being out of work during Covid or just because that money is ours," said Katrina Smith, 39, who lives in North Carolina. "If we agreed to receive the payments, we should be receiving them, and at least be given honest information if there is a problem."
In a statement released on Friday, the IRS said it is "currently looking into this situation, and we will share more information as soon as possible."
Imagine not wanting to give unemployment insurance, minimum wage, or stimulus checks to your neighbors but leading the charge to spend hundreds of millions on a grift of a recall. This is the California and national Republican Party"
California stimulus check update
Thousands of Californians received their stimulus checks yesterday, with the next bass of payments set to be issued on 5 October.
"The California Franchise Tax Board told me payments are issued randomly to eligible residents and the next batch is scheduled to go out 5 October," reports NBC San Diego's Karla Rendon-Alvarez.
A new stimulus proposal from "the best boss in America"
US internet entrepreneur Dan Price -- the CEO of Gravity Payments who cut his salary by a million dollars so all workers could make at least $70,000 per year and who Life magazine called "the best boss in America" -- has offered a new stimulus proposal which would entail making health care free and canceling student loans.
"The best stimulus the government can offer is to cancel student loans and make health care free by taxing corporations and rich people," he tweeted on Friday. "Imagine what would happen to the economy if people suddenly had an extra $10,000 a year (or more) to spend."
Stimulus measures reduced poverty in 2020, Census Bureau reports
The percentage of Americans living in poverty decreased between 2019 and 2020 as a result of stimulus checks and federal unemployment benefits, according to a report by the U.S. Census Bureau.
The bureau’s Supplemental Poverty Measure, fell from 11.8% in 2019 to 9.1% in 2020, according to new data released this week. The poverty threshold for a family of four in 2020 was $26,496, up from 2019′s $25,750.
New round of stimulus checks for California residents
California Gov. Gavin Newsom has confirmed that his administration has began making payment as part of the next round of Golden State stimulus checks, which are going out to around two-thirds of residents in total. The $600 direct payments are the result of the $100 billion California Comeback Plan, which was largely funded by a massive $75 billion budgetary surplus from 2020.
The parents of roughly 60 million children will get another boost to household finances in the coming days as the prepare to receive the next round of payments as part of the expanded Child Tax Credit programme. The third of the six advanced monthly payments will be sent out on 15 September, with most coming as a direct deposit straight into the recipient's account.
The payments are the result of President Biden’s American Rescue Plan which greatly expanded and increased the tax provision, but only for the 2021 fiscal year. An extension is being floated currently in the House.
Underwood pushes for Child Tax Credit expansion
Rep. Lauren Underwood of Illinois was a vocal proponent of the expanded Child Tax Credit and again shares her view on the benefits that the programme brings. She cites the cost of childcare and schooling expenses as areas where families may need some extra assistance, especially given the economic fallout from the pandemic over the past 18 months.
In a statement from back in July, Underwood said: “The Child Tax Credit will deliver critical resources to families when they need it most, but let’s be clear: families need support well beyond this pandemic. I’m fighting in Congress to permanently expand these Child Tax Credit payments."
Stimulus checks and Child Tax Credit live updates: welcome
Hello and welcome to our live blog on Saturday 18 September 2021, offering you the latest updates on a possible fourth stimulus check, plus information on the enhanced Child Tax Credit.
We'll also provide you with news on other relief measures in the US, such as unemployment benefits and California's Golden State Stimulus checks scheme.