Stimulus checks: Could you get $1,200, $600 or nothing?

Coronavirus

Lawmakers are running out of time to pass another coronavirus relief package before Congress adjourns for the holidays. A major point of contention is whether any package will include another round of stimulus checks, the direct cash payments that helped millions of households weather the economic crunch caused by the coronavirus pandemic. 

A $908 billion bipartisan proposal would leave out stimulus payments, focusing instead on providing jobless workers with an additional $300 in weekly unemployment aid. On December 8, Treasury Secretary Steven Mnuchin also proposed a $916 billion package that would provide stimulus checks worth $600 per person, although it would cut back on unemployment aid, according to the Wall Street Journal. 

On December 14, the bipartisan coalition of senators unveiled the legislative text for a pair of coronavirus relief bills that aim to provide economic aid to American workers and small businesses. 

The bills would essentially split the $908 billion package into two plans. The first would consist of a $748 billion measure, expected to include additional funding for the popular Paycheck Protection Program and unemployment insurance, among other programs. A separate $160 billion package would include aid for state and local governments, a priority for Democrats, as well as a liability shield for businesses, which is favored by Republicans — the two plans have been a major obstacle to passing another round of relief. 

Neither proposal makes room for another round of direct stimulus payments, but the $748 billion measure would help millions of jobless workers by adding 16 weeks to the unemployment programs that are now set to expire at the end of December. The Pandemic Unemployment Compensation (PUC), which had provided $600 a week to jobless workers until it expired in July, would be renewed with weekly benefits of $300. The plan would also extend a federal eviction moratorium by an extra month, through the end of January.

“This package is far from perfect — there are major omissions, including a cut in PUC from $600 to $300 and no continuation of paid leave,” said Andrew Stettner, an expert on unemployment with The Century Foundation, a left-leaning think tank. “Nonetheless, the proposal represents a strong down payment of assistance for unemployed workers and the entire economy.”

House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell and other congressional leaders will speak on December 15 to discuss the relief package and an a broader government spending bill, with Treasury Secretary Steven Mnuchin calling in, according to Pelosi’s spokesman on Twitter.

“The Speaker and Secretary Mnuchin spoke at Noon by phone for 1 hour, 7 minutes and discussed the latest on COVID and Omni talks. The Secretary will join the Four Corners leadership meeting today at 4 p.m. by phone,” Pelosi spokesman Drew Hammill wrote on Twitter. 

Splitting the bill may boost the likelihood of extending jobless benefits before year-end, Heights Securities said in a research note. Analysts said there’s a “nearly categorical 80% that Congress will enact at least a moderate sized ($400-750B) stimulus before the week is over.”

Some senators, including Bernie Sanders of Vermont, are insisting that any new relief bill include another round of checks worth $1,200 for low- and middle-income Americans — the same amount offered under the $2 trillion Coronavirus Aid, Relief and Economic Security Act this spring. Sanders, who is joined by Josh Hawley, a Republican senator from Missouri, pledged to force a vote on the proposal before lawmakers adjourn for the year on December 18.

“What I don’t understand is that at a time when, in many ways, the crisis is worse today than it was in March, why we are not responding accordingly,” Sanders said on December 10 in a Senate floor speech. “Again, we must make certain that every working family in this country receives a $1,200 direct payment, plus $500 for their kids.”

The politically fraught debate over additional stimulus funding is leaving millions of households in the dark about what, if any, aid they might receive over the next few weeks. For many people, the financial picture is dimming as winter approaches and coronavirus cases reach new daily highs. 

At the end of November, more consumers said they were feeling a financial impact from the COVID-19 crisis, reaching almost 6 in 10 people and representing the second consecutive monthly increase of hardship, according to a new survey from TransUnion. Job growth around the U.S. also slowed sharply in November, raising concerns the economic recovery is losing steam.

Some consumers, meanwhile, say they need far more than another one-time payment of $1,200 to help them survive until the coronavirus vaccine is widely available next year.

“Our [COVID-19] numbers are bigger than ever and the scale of this pandemic is almost limitless, but the aid is not,” restaurant owner Stephanie Bonin told CBS MoneyWatch. She has a Change.org petition calling for Congress to provide people with $2,000 a month, which has received nearly 2 million signatures. 

She added, “Whether PPP, whether the stimulus checks, one by one they have dried up and nothing else has been put in its place.” 

December 26 “feels like a ticking time bomb,” Bonin added, referring to the date when unemployment aid is set to expire for 12 million jobless workers. “None of it is enough — whether it’s $600, or a one time $1,200 check — none of it is enough to answer the need out there.”

Good news, bad news

The Treasury Department’s stimulus plan, which is backed by the White House, offers both good and bad news for cash-strapped Americans, according to Height Securities analyst Hunter Hammond. On the one hand, it suggests the Trump administration is willing to discuss a larger stimulus package, but it also muddies the waters for earlier negotiations on the bipartisan $908 billion plan. It also heightens “the push for direct payments,” Hammond wrote in a research note. 

“We expect all sides will continue to negotiate and make offers, but investors should not expect a final deal (if one is reached) until the end of the week,” he added. 

Lawmakers are likely to agree on funding for supplemental unemployment aid, which will expire on December 26 for some 12 million jobless workers, Hammond said.

In the meantime, Congress remains deadlocked over the inclusion of provisions on state and local funding, sought by Democrats, and COVID-19 liability protections Senate Majority Leader Mitch McConnell has prioritized. Those issues remained a stumbling block heading into the weekend of December 12, creating more uncertainty about the prospects for a stimulus deal.

Mnuchin said his offer includes funding for state and local governments as well as the liability shield, which would shield businesses, schools and other organizations from lawsuits charging them with failing to protect people from the virus.

But Mnuchin’s offer would also cut unemployment aid from the $180 billion proposed by the bipartisan bill to $40 billion, according to a joint statement from Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer. Cutting jobless aid “is unacceptable,” they said on December 8.

In the meantime, millions of U.S. families are struggling to pay their bills, and layoffs remain historically high. Among consumers who have been affected by the pandemic, about 8 in 10 are concerned about their ability to pay their bills — with half saying they’re worried about affording their rent or mortgage, according to TransUnion. 

“Nearly two in five impacted consumers say they really need a future stimulus check and don’t know how they will get by without,” the credit reporting agency found.

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