Fourth stimulus check: $200 Social Security, Child Tax Credit, tax return, Golden State payment... | 15 January
The US federal government has sent out three waves of stimulus payments since the start of the covid-19 pandemic in March 2020.
In December Congress failed to find a compromise on President Biden's Build Back Better bill and a raft of programmes were put on hold. Included in that was a proposed extension to the Child Tax Credit and expansion for Medicare. The package could have helped those dealing with the wave of Omicron cases currently sweeping the United States, but in its absence there are renewed calls for lawmakers to provide additional financial support for elderly Americans.
The wave of Omicron case currently spreading across the United States has left many wondering if another round of economic support is needed to help those who may have lost income due to the disruption. Congress has opting against passing President Biden's Build Back Better bill with extended Child Tax Credits and other programmes, but some states have decided to offer their own support.
While few are giving residents another stimulus check, many have implemented an additional form of financial relief.
Worried about Social Security fraud?
As we approach tax season 2022 many people will be searching for their Social Security Number to complete their tax returns, but what should you do if you suspect that someone has been using it fraudulently. Social Security fraud can be a major problem so make sure you report any suspicious activity to the correct authorities.
Every year the Social Security Administration announces a cost-of-living adjustment (COLA), which is designed to increase Social Security payments to reflect the rate of inflation. given the precarious economic situation that the US finds itself in and the soaring inflation rates, the SSA has confirmed a massive 5.9% increase this year, but who will benefit from the boost?
Rep. Jayapal critices Child Tax Credit inaction
Progressive in Congress warned last year that splitting President Biden's legislative proposals into two separate bills meant risking some of the more ambitious elements of his agenda, and they were proved right when the Senate failed to approve the Build Back Better bill last month. The package included a one-year extension for the expanded Child Tax Credit, but without the additional funding the support ended with the December payment. Progressive lawmaker Rep. Pramila Jayapal has criticised the "failure to deliver" the extension.
Democrats mull paring down Child Tax Credit expansion to make it permanent
Senator Joe Manchin is the linchpin to passing the Build Back Better Act through an evenly divided Senate. One of the sticking points for the senator has been the enhanced Child Tax Cut extension. He wants it removed or funded for the full 10 years that the reconciliation budget bill would allow.
The Wall Street Journal reports that in order to get Manchin onboard Democrats are mulling paring down the amount of the credit and lowering the income threshold to receive the full credit. But they also want to make the changes permanent, which will be costly making it difficult to meet another requisite of the senator, keeping the price tag of Build Back Better under $1.8 trillion.
If nothing else, keep the Medicare drug-payment cap from Build Back Better
Sally C Pipes, President of the Pacific Research Institute, in an opinion article published by the East Bay Times urges Democrats to pass a bill separately that would put a $2,000 cap on out-of-pocket prescription drug costs for Medicare beneficiaries. The proposal is included in the Build Back Better Act, but that bill is languishing in the Senate, Democrats currently lack the 50 votes that they need to pass the legislation.
Piper argues that the measure would, in addition to saving money, help ensure that patients would take their medications. In turn that would bring further savings, preventing "treatable chronic problems into expensive medical catastrophes."
Enhanced Child Tax Credit helped families make ends meet
Had the changes made to the Child Tax Credit for the 2021 fiscal year been extended, families would've received another installment on Friday. However, that extension, included in the Build Back Better Act, never came as the bill sits in the Senate where Democrats lack the 50 votes they need to get it over the finish line.
For many families, the monthly payments gave them just that little extra breathing room to make ends meet so they could cover necessities without dipping into savings. Abha Bhattarai at the Washington Post looks at how the programs helped households across the nation and their concerns going forward without the financial boost.
The United States’ economic recovery is continuing but there is growing concern that a prolonged period of high inflation rates could topple the progress that has been made over the past 12 months.
During the first year of the pandemic the federal government issued various forms of financial support for individuals and businesses, with stimulus checks, additional unemployment benefits and favourable business loans. Those efforts likely saved millions from financial ruin, but the influx of cash has sent inflation rates soaring.
There may now be a need to rein in those soaring inflation rates.
Has the US reached full employment?
Last week the Labor Departmen reported that the unemployment rate fell to 3.9 percent, down from 6.7 percent a year earlier. That is below the the 4 percent level that had been projected in December for where long-term unemployment would settle.
With the number of new jobs created slowing and wages increasing, along with workers quitting to chase those higher paying jobs, conditions seem to meet the textbook definition of full employment. If the US is there this will affect how quickly the Federal Reserve will raise interest rates
The Wall Street Journal takes a look.
Families will need to tighten their belts with enhanced Child Tax Credit expiration
In July the US began an experiment in a form of universal basic income for families with children. The initial data showed promising signs for households with children that received the monthly Child Tax Credit payments. Food insufficiency and financial anxiety dropped. An estimated 40 percent of children were pulled out of poverty.
However, the changes to the Child Tax Credit expired at the end of 2021 along with the advance payment scheme. Democrats have been pushing to extend the program as part of the sweeping Build Back Better Act, but the legislation stalled in the Senate. This was due to objections from Senator Joe Manchin about the cost of the program, worries about inflation and mistrust that recipients would use the money wisely.
2022 tax season set to be confusing for filers
Filing tax returns is expected to be more complex this year due to advance payments on the 2021 Child Tax Credit and third stimulus check. Although the latter won't necessarily affect your tax refund unless you missed out on the payment, filers may encounter confusion calculating how much of the Child Tax Credit they can still claim.
The credit was increased to $3,600 for each child under six and $3,000 per kid aged six to 17. Parents that didn't opt out of the advance payments should have received half that amount in 2021, but there have been glitches with some of the payments. Taxpayers will need to subtract the amount that they got last year from what they can still claim for their refund in 2022.
File early to avoid tax return delays
In the previous two tax seasons the IRS was forced to issued extensions for filers, due to the pandemic-related disruption and the severe winter storms in the south last year.
This year the agency has insisted that it will not be issuing another extension, but have advised that people get their tax returns in early to avoid facing significant delays.
With the Omicron variant making its way across the US, there have been growing calls for further economic support for American people and businesses. Millions of people are unable to go to work, putting them under pressure as federal support such as the Child Tax Credit winds down.
But will this mean that another stimulus check could be on the way for residents in certain states? We take a look...
Which goods have seen the greatest increase in price?
The BLS has reported that from December 2020 to December 2021, the Consumer Price Index increased 7 percent, with a 0.5 percent bump recorded from November to December. Some of the greatest with the highest increases included the gasoline, many common food products, cars, and more.
For example "Prices for meats, poultry, fish, and eggs rose 12.5 percent from 2020 to 2021, almost triple the 4.6 percent rise in 2020. Prices for nonalcoholic beverages rose 5.2 percent from 2020 to 2021, a larger increase than the 4.4-percent advance from 2019 to 2020. Prices for the other food at home group rose 5.6 percent in 2021 after an advance of 3.9 percent increase in 2020." Read more
Which states saw increases in initial unemployment claims last week?
Initial unemployment claims increased by more than 20,000 around the country to 230,000 for the week ending on 8 January.
States that saw the largest increases included:
1. New York (+8,812)
2. Pennsylvania (+6,772)
3. Connecticut (+6,020)
4. Washington (+4,626)
5. Michigan (+3,923).
States and territories with the largest decrease in initial claims were:
1. Missouri (-1,086)
2. Tennessee (-674)
3. Puerto Rico (-329)
4. Rhode Island (-288)
5. New Mexico (-101).
What has Biden said about recent inflation?
[The] report—which shows a meaningful reduction in headline inflation over last month, with gas prices and food prices falling—demonstrates that we are making progress in slowing the rate of price increases. At the same time, this report underscores that we still have more work to do, with price increases still too high and squeezing family budgets.
Last year, the US Bureau of Labor Statistics released the COLA adjustment showing an increase of 5.9 percent. The huge increase means the maximum money that can be claimed through Social Security is the highest in years. The maximum that can be claimed has risen to $49,497 a year, or $4,124 a month.
Social Security is typically thought of as a program that offers monthly payments for retired Americans and other groups to help towards the cost of essentials. However, few know that recipients can also claim a proportion of the support in a lump sum, provided they satisfy certain requirements.
Hello and welcome to the AS USA dedicated fourth stimulus check live feed, bringing you all the latest on hopes of another round of direct payments and other financial news. President Biden's Build Back Better bill may have failed to garner sufficient support in the Senate last month but there is still an appetite in Congress to see an extension for the Child Tax Credit in the near future.