STIMULUS CHECKS

Can a fourth stimulus check still happen in 2021? Are the negotiations still ongoing?

There is a contentious fight among Democrats over how to proceed with President Biden’s Build Back Better plan as American families still struggle.

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Can a fourth stimulus check still happen in 2021? Are the negotiations still ongoing?
CHIP SOMODEVILLA AFP

President Biden won the White House campaigning on his Build Back Better agenda which seeks to reconstruct the US economy devastated by the covid-19 pandemic. The first phase of that plan was enacted in March through the American Rescue Plan.

The sweeping legislation sought to tackle the immediate concerns the US was facing, with federal pandemic unemployment benefits set to expire, the recovery stagnating and a vaccination program that was yet to take off. That legislation approved a third round of stimulus checks which gave all eligible Americans up to $1,400. Since then, there have been calls for additional cash injections into US households still struggling with the effects of the pandemic-induced economic crisis.

Status of a fourth federal stimulus check

The first of three rounds a stimulus checks was approved in the spring of 2020 which sent eligible Americans $1,200. Not long after that boost to household income to prop up the economy experiencing the greatest rise in unemployment since the Great Depression there began calls for the measure to be made recurring for the duration of the pandemic.

Even after the third round of stimulus checks was passed, senators and congressional members wrote to the White House urging President Biden to support the proposal as part of the larger Build Back Better plan. The response from the Biden administration has been muted with press secretary Jen Psaki in the spring telling the reporters that Biden is “happy to hear from a range of ideas,” but added “he's also proposed what he thinks is going to be the most effective for the short term for putting people back to work, to getting through this pivotal period of time, and also to making us more competitive over the long term."

Likewise, Treasury Secretary Janet Yellen in June told the House Ways and Means Committee “Sometimes stimulus checks are a really good approach. Sometime less good. I think we need to look into the economics and consequences of that a little more.” Secretary Yellen added “but we would be happy to work with you.”

Congress has grown silent on fourth stimulus check

As Democrats work to get the rest of President Biden’s agenda through Congress vocal support for recurring stimulus checks or even just a fourth has been scant. Any such measure would add billions to the price tag of the currently $3.5 trillion budget reconciliation bill Democrats plan to use to push the sweeping proposals through Congress.

Despite overwhelming support in the party for the measures in the future bill the overall cost has some members calling for a reduction in its size. Specifically, Senators Joe Manchin and Kyrsten Sinema, both of whom would be needed to get the spending package through the Senate on a party-line vote

Other forms of stimulus included in Build Back Better bill

Democrats may not be focusing on new Economic Impact Payments, better known as stimulus checks, but the bill they are working on could provide another valuable direct cash injection. Through the extending the changes to the Child Tax Credit for the 2021 fiscal year through 2025, families would continue to receive advance monthly payments on the enhanced tax provision which are currently up to $300 per child under 6 and $250 for each kid age 6 to 17.

The Niskanen Center, in a report in August, calculated that over 12 months the Child Tax Credit could pump $27 billion into local economies across the US. Although more populous states would get more funds in general, the credit would have a greater impact in rural communities which would benefit from higher purchasing power of the cash injections relative to urban areas.

However, Senator Joe Manchin is demanding that his Democratic colleagues prioritize which of the measures to help working families they want in the final bill in order to get his essential vote. He wants them to choose between the expanded Child Tax Credit, paid family medical leave or subsidies for child care unless Manchin can be swayed to change his mind.