Fourth stimulus check | News summary for 6 December
Retroactive termination of the Employee Retention Credit
The Internal Revenue Service has given guidance for employers regarding the retroactive termination of the Employee Retention Credit. The Infrastructure Investment and Jobs Act, which was enacted on 15 November 2021, amended the law so that the Employee Retention Credit applies only to wages paid before 1 October 2021, unless the employer is a recovery startup business.
Employers that are not recovery startup businesses and received advance payments for fourth quarter wages of 2021 will avoid failure to pay penalties if they repay those amounts by the due date of their applicable employment tax returns.
Sherrod Brown on opposition to the Child Tax Credit: “I just have never heard such a stupid thing”
South Carolina Senator Lindsay Graham lashed out at the child tax credit at the end of last week, claiming it was causing illegal immigration - the thinking being that word will get out to other countries that if people can get to the US they’ll get free money for their children.
Of course that isn’t what happens, as unauthorised immigrant children would not qualify for the child tax credit. (There’s a further argument about what actually drives people to immigrate, but in general it’s not for welfare benefits and the vast majority of immigrants work incredibly hard to make a new prosperous life for themselves in their new country - research shows that immigrants as a whole have a major positive benefit on the economy).
Ohio Senator Sherrod Brown spoke to Insider about Graham’s comments and said: “It’s a new argument just so that they could give tax cuts to the rich and squeeze working families. I just have never heard such a stupid thing.”
Research shows that not only did the first month of payments in July keep 3 million children out of poverty and help feed 2 million kids, analysis shows that the payments also had “very small” impacts on employment, indicating the tax credit does not encourage parents to not go back to work.
Choosing which infrastructure projects to fund
Pete Buttigieg, secretary, US Department of Transportation spoke to NBC about the infrastructure bill,(which is already allocating money) and what transport projects will be benefiting from the money, whether it’s “roads, bridges, airports, or getting electric charging points rolled out across the country.”
Buttigieg explained that even with the huge amount of investment going in, “we have to prioritise”, so “we’re going to make sure the investment goes to the highest and best use [projects]”.
He set out a priority list that is used to evaluate projects:
Safety (to drive, walk, bike)
Equity (levelling up excluded communities)
Climate change and the environment
Preparing America for the future.
Those priorities are then used to evaluate every proposal, from a crosswalk in a small town to the most ambitious, complex seaports, airports, and big city tunnel systems.
Studies show benefits of the Child Tax Credit
Next week the final round of payments as part of the Child Tax Credit expansion are due to be distirbuted, but there is a clear appetite in Washington and across the country for an extension to be agreed. The one-year programme expansion was provided by funding from the American Rescue Plan and President Biden is eager to ensure that at least one more year is secured by the Build Back Better bill. Early studies suggested that the first few months' payments contributed to a 24% fall in food insecurity amongst recipients.
Porter calls for Medicare For All
Rep. Katie Porter is hosting a webinar to discuss the future of healthcare in the United States and the proposed changes to Medicare. The White House had hoped to include significant expansions for Medicare in the Build Back Better bill, with hearing, dental and vision potentially included for the first time, but that is yet to receive adequate support in Congress.
Later this month the IRS will distribute the final round of direct payments as part of the expanded Child Tax Credit, the sixth instalment of the monthly support that has so far been secured by Congress. Since July the Child Tax Credit has been sent out in the form of a direct payment worth up to $300 per month for eligible families, but that support is set to expire after December unless Congress can pass the Build Back Better bill.
Bernie wants Medicare reform
Sen. Bernie Sanders is a long-time supporter of Medicare and public health initiatives and believes that the programme should be alteed to allow providers to negotiate drugs prices with manufacturers. He makes the point that, without extortionate prices for pharmaceuticals, the insurance could be offered to individuals for a lower cost.
Advanced Child Tax Credit will reduce your tax deduction
Since July the Child Tax Credit have been sending monthly payments worth up to $300 per child to eligible families, as part of the credit's new advanced structure. This change has been linked to a 24% fall in food insecurity in the few months that it has been in place, but does mean that recipient families may have a smaller end of year Child Tax Credit to claim than normal.
In previous years the whole credit was made available at filing time, but the IRS will have distributed 50% of the total allowance to each recipient in the form of the monthly payments.
Advocacy group pushes for greater government intervention
Workers' rights group Fight for 15 has called on the government to do more to alleviate poverty and provide greater support for those suffering the financial consequences of covid-19. The likes of stimulus checks and the improved Child Tax Credit programme have already yielded positive results, but Fight for 15 are keen for a more long-term view to be taken.
To support families and better position the US economy to combat climate change, the House of Representatives passed the Build Back Better bill, formally known as the reconciliation bill, in early November.
The bill will now move on to the Senate for consideration in the upper chamber. Households with children could look forward to another 12 months of advance Child Tax Credit payments next year along with other tax breaks and subsidies to help with childcare. Democrats are aiming to pass the bill before the end of the year when the advance payments will expire if the extension isn’t passed.
Democrats push for Child Tax Credit expansion
One of the cornerstones of President Biden's Build Back Better plan is securing an extension of the new Child Tax Credit system, which has seen eligible parents receive up to $300 per child in monthly payments since July. If an extension cannot be agreed, the IRS will make the final round of these direct payments on 15 December.
Sign up for Medicare before midnight on 7 December
You have less than two days left to take advantage of the Medicare 2021 enrollment period, giving you access to great-value insurance programmes. President Biden is hoping to secure an expansion for Medicare in the Build Back Better bill which could see dental, vision and hearing cover included in the programmes for the first time, so now is a good time to get signed up with a Medicare provider.
Earlier this year the federal government distributed the third stimulus check and personal income rose to $24.1 billion in April. However since then that figure has trended downward, and by September national personal income had fallen to $20.4 billion.
One of the main factors driving the decrease was the ending of federal pandemic-related unemployment benefit programs. As unemployment benefits ended more than eight million workers in the United States quit their jobs, providing new evidence that the benefits were not keeping people from re-entering the workforce. So, with the economic recovery appearing to slow in the November jobs report, will a fourth stimulus check be passed by Congress?
Here's what Biden said about the November jobs report
Reflecting on the progress made during his first year in office, President Biden said: "America's back to work, and our jobs recovery is going very strong".
The growth in the jobs market slowed in November in comparison to the strong gains made in previous months, but the mark of 210,000 new jobs across the month was still enough for Biden to celebrate, along with the wage increases for people returning to the workplace.
Bennet explans Child Tax Credit support
Sen. Michael Bennet of Colorado has been one of the most vocal proponents in the Senate of the Child Tax Credit expansion which has seens tens of millions of eligible families receive direct monthly payments since July. The White House is trying to secure an expansion to the programme in the Build Back Better bill, but Biden is yet to secure the all-important votes of moderates like Sen. Joe Manchin.
US economy adds 210,000 new jobs in November
The US economy added 210,000 jobs in November, less than half of what were added in October but still a fair return for the Biden administration. Labor force participation increased .02 percentage points, from 61.6 to 61.8 percent. The Wall Street Journal reported that this boost could be a result of increased wages that are attracting additional workers.
What is in the Build Back Better bill?
Sen. Rob Portman of Ohio has criticised the Democrats for spending more on the proposed SALT cap increase than is being spent on the Child Tax Credit expansion, which the White House describes as a cornerstone of President Biden's economic agenda.
The economic benefits of funding the Child Tax Credit expansion
One of the programmes in the US government's Build Back Better package, the Child Tax Credit expansion, is said to have the potential to alleviate the country's poverty levels on an almost unparalelled level. But monthly Child Tax Credit check set to be released this month could be the last, pending Congress action on the Build Back Better bill.
The Social Security Administratin has stated that around eight million beneficiaries will receive their first check with the COLA applied on 30 December 2021. More than 64 million Social Security beneficiaries will see their higher payments starting in January based on the Social Security Administration’s payment schedule.
The COLA increase is the result of price rises in recent months that would have left some Social Security recipients unable to afford essentials.
Biden praises economic recovery after positive jobs report
Today’s news means that the unemployment rate has now fallen by more than two percentage points since I took office. That’s the fastest decline in a single year on record. And it’s about three times faster than any other President in their first year in office.
The number of people claiming unemployment has fallen from 18 million when I took office, to 2 million this week. Another record drop.
We’ve also learned today that in November, 235,000 jobs were created in the private sector. And when they went back and recalibrated, they found — the last two months — they found that job growth over the prior two months, September and October, actually created 82,000 more jobs than had previously been reported — which means that we’ve averaged nearly 400,000 new jobs a month over the last three months. A solid pace.
Time's running out to get your Medicare enrollment done
The enrollment period which began on 15 October will end on 7 December. If you are eligible for the coverage but have not yet signed up, head over to medicare.gov provides seniors various tools to compare plans avaiable to them in their area.
The Social Security Administration (SSA) has announced that in 2022 those receiving benefits from the agency including Social Security, Supplemental Security Income, and others would see a 5.9% increase reflected in their check.
Later this month, the Social Security Administration will send beneficiaries a letter explaining the exact increases they will see reflected in their benefit amounts. For those looking for a guide on how to calculate their benefits, check out our handy guide.
Why does inflation happen?
In the United States and around the world, everyone is talking about inflation. The unique consequences of the pandemic, with substantial financial stimulus from the government and disruption to the supply chains, have caused a shortage of products and seen prices rise across the board. The International Monetary Fund has published a new video about the causes of the current increases in inflation, how much inflation is valuable, and what governments may to do to lower prices.
Good morning and welcome to AS USA's dedicated stimulus check live feed, with all the latest development on the possibility of another round of direct payments as well as other financial relief programmes. Congress is still close to passing the Build Back Better bill, the remainder of President Biden's ambitious legislative agenda.
We'll also bring you the latest on the Social Security COLA increase for 2021 and prospects of a Medicare expansion in the New Year.