Just another WordPress site

Why Is a Fourth Stimulus Check Being Pushed? Latest Update!

In the third round of direct stimulus cash, the IRS released over 169 million payments, with $1,400 checks reaching most American families.

However, some campaigners and politicians are asking for the fourth wave of stimulus funding, which would be delivered in instalments until the pandemic is over.

So far, the federal response to the economic crisis brought on by the coronavirus pandemic has paid out $3,200 to eligible adults: $1,200 under the Coronavirus Aid Relief and Economic Security Act signed in March 2020, $600 in a December relief measure, and $1,400 under President Joe Biden’s American Rescue Plan signed in March.

Despite this aid, millions of Americans remain in financial trouble, and the expansion of the Omicron variation is causing additional economic challenges.

According to new statistics from a Census survey conducted during the first two weeks of December, moreover, a quarter of Americans struggled to pay their household bills in the previous week.

The unemployment rate is 4.2 per cent, which is still higher than the pre-pandemic record of 3.5 per cent.

Even though companies are recruiting, there are still 2.3 million fewer individuals on payrolls now than there were before the epidemic.

Economists are concerned about the development of the Omicron version, which has caused college campuses to close and high-profile events such as Broadway musicals to be cancelled.

According to David Kelly, chief global strategist at JPMorgan Funds, the increase of COVID-19 cases is “hitting demand in the leisure, entertainment, travel, and restaurant industries, as revealed by high-frequency data.”

“It will also cause widespread absenteeism in early 2022, putting a considerable impact on the economy in the first quarter after a very successful fourth.”

At the same time, more than 30 million American families received financial assistance last month, with the final payment from the Child Tax Credit arriving in bank accounts on December 15.

The Build Back Better Act, which contained a one-year extension of the programme, failed to pass owing to opposition from Senator Joe Manchin, a Democrat from West Virginia. Those checks which offered up to $300 per qualified kid will not continue in 2022.

In summary, stimulus funding is no longer available for many individuals, a subject that many Americans are concerned about as they continue to battle with joblessness and a sluggish labour market.

Indeed, about 3 million individuals have signed a Change.org petition calling on politicians to approve legislation requiring recurring $2,000 monthly contributions, which was initiated last year.

Some activists are encouraging lawmakers to support fresh stimulus initiatives, particularly for one group that has been particularly severely impacted by soaring inflation as a result of the epidemic.

More than 95,000 individuals have signed a petition from the Senior Citizens League, a senior advocacy group, to deliver a one-time $1,400 payment to seniors as of December.

Inflation in 2021 greatly surpassed the 1.3 per cent rise in Social Security benefits that beneficiaries received at the start of the year.

However, even with the 5.9% cost-of-living raise set to take effect in January 2022, many seniors will still be lagging behind inflation, which rose 6.8% in November.

“It would help folks buy an additional week’s worth of groceries for a few months,” said Mary Johnson, a Senior Citizens League policy researcher for Social Security and Medicare.

“A stimulus payment would assist them in managing these higher-than-expected expenditures.”

Do You Want to Set Up Recurring Payments?

The concept of periodic payments has been taken up by several legislators. Twenty-one senators, all Democrats, wrote a letter to Vice President Joe Biden on March 30 in support of regular stimulus payments, arguing that the $1,400 instalments set to be distributed by the IRS wouldn’t last long.

“Nearly six out of ten consumers think the $1,400 instalments contained in the bailout agreement would last them fewer than three months,” the senators stated in their letter.

In the meanwhile, several states are enacting their stimulus checks. Governor Gavin Newsom’s latest initiative is expected to qualify about two-thirds of California citizens for a “Golden State Stimulus” payment.

Low- and middle-income residents who have submitted their 2020 tax forms will get $600 as a result of this endeavour. To assist counterbalance the burden of the epidemic, Florida and parts of Texas have allowed incentives for teachers.

The senators’ letter does not indicate the size of the periodic payments they are requesting.

Democratic legislators proposed $2,000 monthly payments until the epidemic ended in January 2021 in a separate attempt. The American Rescue Plan, on the other hand, permitted one-time payments of up to $1,400 per qualifying adult and dependent.

The Child Tax Credit Deadline is December 31st.

Why Is a Fourth Stimulus Check Being Pushed?
Why Is a Fourth Stimulus Check Being Pushed?

The IRS transferred the first of six monthly cash payments into the bank accounts of parents who qualify for the Child Tax Credit in July, providing another type of stimulus relief to certain families (CTC).

According to an examination of Census data by the left-leaning advocacy organisation Economic Security Project, families got an average of $423 in their first CTC payment.

Eligible families received up to $1,800 in cash from July to December, with the funds distributed in six equal payments throughout the six months.

The assistance was provided as part of President Joe Biden’s American Rescue Plan, which includes an enlarged CTC.

Families that met the criteria got $300 per month for each kid under the age of six and $250 for children aged six to seventeen.

The additional money would go toward child care, back-to-school materials, and other necessities, according to many families who talked with CBS MoneyWatch.

While progressives and some Democrats pressed Congress to keep the increased CTC in place, it looks to be on hold for the time being. This implies that no CTC payments will be made in January or afterwards.

Savings and Emergency Funds

Why Is a Fourth Stimulus Check Being Pushed?
Why Is a Fourth Stimulus Check Being Pushed?

According to recent research from the Federal Reserve Bank of New York, respondents who have received the three rounds of stimulus payments have reported they are utilising the majority of the cash to pay down debt or put money in savings.

This might imply that individuals are utilising the money to pay off debts accumulated during the epidemic as well as build up an emergency reserve in case of a future disaster.

According to analysts, the three waves of stimulus funds saved millions of Americans from suffering.

According to a May review of Census data by the University of Michigan, when the stimulus has failed, such as last autumn when Congress was stuck on another round of help, suffering grew “markedly” in November and December.

According to Kelly of JPMorgan Funds, the CTC’s elimination might create further headwinds for families and the economy.

“These payments averaged nearly $15 billion each month, according to the IRS, and their abrupt cancellation might restrict previously soaring spending on food and other household staples,” Kelly wrote.

Continuing to Live Paycheck to Paycheck

Why Is a Fourth Stimulus Check Being Pushed?
Why Is a Fourth Stimulus Check Being Pushed?

While direct help to families was offered through stimulus checks and the now-expired Child Tax Credit, “most government aid programmes miss the goal, and only reach a fraction of the intended users,” according to Greg Nasif, political director of Humanity Forward.

“They hardly functioned even before the pandemic,” he said, “and they provide parents a full-time job overcoming bureaucratic impediments.”

In his opinion, the greatest option for assisting suffering families is to provide “quick, efficient, direct monetary support.”

Many people never sought unemployment benefits because they believed they were ineligible, while others may have given up owing to long wait times and other obstacles.

Even individuals who were eligible for assistance were not always given it. According to a March survey by economist Eliza Forsythe, just 4 out of 10 jobless people got unemployment benefits.

Is a Fourth Stimulus Check Likely?

According to Wall Street experts, don’t hold your breath.

For one thing, the Biden administration has emphasised infrastructure expenditure as a way to boost economic development, wagering that spending on roads, railways, and other direct investments will help people go back to work and continue the recovery.

Second, analysts have blamed relief initiatives such as the three rounds of stimulus cheques for inflating the economy.

Because they had more money in their wallets, Americans increased their spending on items like furniture, vehicles, and technology. According to experts, this, along with the supply-chain bottleneck, resulted in dramatically increased inflation.

According to Brad McMillan, a chief investment officer of Commonwealth Financial Network, without further stimulus initiatives on the horizon, inflation is projected to decline in 2022.

In a December report, he remarked that “one driver of inflation has been an expansion of demand fuelled by fiscal stimulus.” “However, that stimulus is now over.”

Read Here:-

“Yes, we will continue to confront inflation and supply issues,” he said, “but they are decreasing and will continue to do so.”

Leave A Reply

Your email address will not be published.