Stimulus Update Today: In the third round of direct stimulus aid, the IRS has delivered more than 169 million payments, with more than 2 million taxpayers receiving $1,400 checks in July.
However, some politicians are pushing for the fourth round of stimulus Update Today funding, which would be delivered in instalments until the pandemic is over.
So far, the federal response to the economic crisis caused by the coronavirus pandemic has paid out $3,200 to eligible adults: $1,200 in March 2020 under the Coronavirus Aid Relief and Economic Security Act; $600 in December relief; and $1,400 in March under President Joe Biden’s American Rescue Plan.
Despite this aid, millions of Americans remain in financial trouble, and the Delta variant’s spread is causing additional economic challenges.
Stimulus Update Today to new Census survey
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According to new Census survey data collected over the last two weeks of August, nearly one-quarter of Americans struggled to pay their household costs in the preceding week.
The unemployment rate is at 5.2 percent, which is still higher than the 3.5 percent pre-pandemic figure. Despite the fact that businesses are hiring, there are still 5.3 million fewer individuals on payrolls today than there were before the pandemic.
Economists are concerned about the spread of the Delta variety, with Oxford Economics recently lowering its global economic growth prediction for 2021 to 5.9% from 6.4 percent.
In the paper, Ben May, director of global macro research at Oxford Economics, stated, “Uncertainty and reluctance may eventually contribute to a more slow-burning recovery from here than our baseline predicts.”
The Problem 9.1 million Americans Lost
Simultaneously, 9.1 million Americans lost enhanced unemployment benefits when the federal payments expired on Labor Day.
This will result in the loss of almost $5 billion in weekly benefits that had been flowing to unemployed employees, aid that had helped them pay for groceries, rent, and other necessities.
In short, the last round of $1,400 checks is long gone for many people, even while other federal stimulus Update Today programs wind down – a topic that is on many Americans’ minds as they continue to battle with joblessness and a sluggish labor market.
Indeed, more than 2.8 million individuals have signed a Change.org petition calling on politicians to adopt legislation requiring recurring $2,000 monthly payments, which was initiated last year.
The concept has been taken up by a few legislators. Twenty-one senators, all Democrats, wrote a letter to Vice President Joe Biden on March 30 in support of periodic stimulus payments, arguing that the IRS’s $1,400 payment won’t last long.
“Nearly six out of ten consumers say the $1,400 installments contained in the bailout agreement will last them fewer than three months,” the senators stated in their letter.
In the meanwhile, some states are enacting their own 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 endeavor. To assist in counterbalancing the burden of the pandemic, Florida and parts of Texas have authorized bonuses for teachers.
The senators’ letter does not specify the size of the payments they want, but a previous initiative by Democratic lawmakers in January called for $2,000 monthly payouts until the pandemic is over. The American Rescue Plan, on the other hand, set aside $1,400 for each qualifying adult and dependant.
Deposits for the Child Tax Credit are due on July 15.
On July 15, the IRS transferred the first of six monthly cash payments into the bank accounts of parents who qualify for the Child Tax Credit, providing another type of stimulus relief to some families (CTC).
According to an examination of Census data by the left-leaning advocacy group Economic Security Project, families got an average of $423 in their first CTC payment.
Eligible families will get up to $1,800 in cash from July to December, with the funds distributed in equal payments over the six months. The assistance is provided as part of President Joe Biden’s American Rescue Plan, which includes an expanded CTC.
Families who meet the criteria will get $300 per month for each kid under the age of six and $250 for children aged six to seventeen. The extra money would go toward child care, back-to-school materials, and other necessities, according to many families who spoke with CBS MoneyWatch.
If Mr. Biden’s American Families Plan goes forward, families may get a bigger tax benefit in the future.
The Child Tax Credit would be expanded through 2025 under that plan, giving families an additional four years of larger tax savings for their children.
Savings and emergency funds
According to a recent analysis from the Federal Reserve Bank of New York, respondents who have received the three rounds of stimulus payments have reported they are using the majority of the funds to pay down debt or put money in savings.
This could indicate that people are utilizing the money to pay off debts accumulated during the pandemic as well as build up an emergency reserve in case of a future disaster.
According to Bankrate.com, nearly 7 out of 10 Americans who have received, or felt they would soon receive, a third payment said it is critical for their short-term finances.
According to the personal finance firm, this is down from approximately 8 in 10 people in March 2020, when the epidemic caused widespread unemployment, but the overall share of people who require further assistance remains elevated more than a year later.
According to the survey, around one-third of participants claimed the stimulus money would help them for less than a month.
According to analysts, the three waves of stimulus Update Today 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 fall when Congress was stuck on another round of help, suffering increased “markedly” in November and December.
Continuing to live paycheck to paycheck
Some of the world’s most prominent economists have advocated for more direct aid to Americans. Last year, more than 150 economists signed a statement arguing for “periodic direct stimulus payments, lasting until the economy recovers,” including former Obama administration economist Jason Furman.
Despite the fact that the economy is improving, millions of people continue to live in poverty and are unable to access government assistance, according to Nasif. According to a March survey by economist Eliza Forsythe, only 4 out of 10 jobless people received unemployment benefits.
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.
“You’ll hear news about how the economy is improving, but many Americans are still living paycheck to paycheck, and government assistance programs haven’t been able to help them,” said Greg Nasif, political director of Humanity Forward.
Is a fourth stimulus Update today check likely?
According to Wall Street analysts, don’t hold your breath. Raymond James analyst Ed Mills told CNBC, “I think it’s improbable at this point.” The Biden administration is focusing on advancing its infrastructure plan, which would change the economy by repairing old schools, roads, and airports, as well as investing in projects ranging from affordable housing to the internet.
According to Stifel’s Brian Gardner in an August 11 research note, the idea, which the White House claims will be funded by raising the corporate tax rate from 21% to 28%, will undoubtedly consume Congress this fall.
“The fall is shaping up to be a hectic time in Washington,” he noted, “as Congress seeks to finish two infrastructure packages (one of which involves tax hikes), approve annual budget bills, and raise the debt ceiling.”
Headwinds in the Delta?
At the same time, as the Delta variety expands across the country, the economic recovery is meeting obstacles. COVID-19 infections are on the rise in some jurisdictions with poor vaccination rates, which may discourage people from working in restaurants or other industries that require public exposure.
According to recent research, Texas’ failure to control the COVID-19 outbreak has resulted in roughly 72,000 job losses and a $13 billion annual drop in output. Fear of catching COVID-19 is also driving to employment losses in Texas, according to the report, as workers choose to stay at home or are forced to stay at home to care for sick family members.
Meanwhile, on September 6, federal pandemic unemployment benefits expired, signaling the end of creative programs that provided jobless assistance to gig workers, part-time workers, and others who don’t normally qualify for unemployment benefits. According to experts, this could exacerbate the difficulty for many families.
“This cliff jeopardizes our economic recovery progress by draining consumer spending from the economy, putting millions of workers at risk of long-term suffering,” Century Foundation senior fellow Andrew Stettner said in a statement.