(CBS Detroit) — Many are already asking about a fourth stimulus check. The latest round of economic relief has already been distributed to most eligible Americans. As of last week, the total number reached about 130 million payments of up to $1,400 per person. That adds up to about $335 billion of the $422 billion allotted in the $1.9 trillion American Rescue Plan Act. Paper checks and EIP cards continue to arrive in the mail everyday.
These relief payments are part of a broad effort to cushion COVID’s economic impact on households and support the economy while it recovers from the pandemic. The stimulus package also extends unemployment benefits, strengthens the child tax credit, and much more. The recent round of stimulus checks follows the $1,200 payments at the pandemic’s outset and the $600 payments in early January. But some politicians feel that this latest effort, on top of previous efforts, still won’t be enough.
Who Supports A Fourth Stimulus Check?
Last week a group of Democratic Senators, including Ron Wyden of Oregon, Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont, sent a letter to President Joe Biden requesting “recurring direct payments and automatic unemployment insurance extensions tied to economic conditions.”
As the Senators reasoned in their letter, “this crisis is far from over, and families deserve certainty that they can put food on the table and keep a roof over their heads. Families should not be at the mercy of constantly-shifting legislative timelines and ad hoc solutions.”
An earlier letter to President Biden and Vice President Kamala Harris from 53 Representatives, led by Ilhan Omar of Minnesota, staked out a similar position. “Recurring direct payments until the economy recovers will help ensure that people can meet their basic needs, provide racially equitable solutions, and shorten the length of the recession.”
A majority of Americans also favor recurring relief payments. According to a January poll from the Data For Progress, nearly two-thirds of all voters support $2,000 monthly payments to all Americans for the length of the pandemic. Supporters include a majority of Independents and Republicans. Many economists are also onboard. A 2020 open letter from experts in the field argued “direct cash payments are an essential tool that will boost economic security, drive consumer spending, hasten the recovery, and promote certainty at all levels of government and the economy – for as long as necessary.”
Why A Fourth Stimulus Check Is Unlikely
All of this voiced support keeps the possibility of another round of stimulus checks — or recurring stimulus checks — alive. It doesn’t make them likely, however. And there are a number of reasons why.
Vaccinations are progressing nicely, with three different options available to the public. The President recently stated that 90 percent of American adults will be eligible by the middle of April. Actually putting needles in arms takes longer, though most states have lowered the necessary age to qualify. The administration is well on its way to reaching its revised goal of administering 200 million doses in its first 100 days. Americans have received over 165 million doses, with 32 percent of the population having received at least one dose and 18.5 percent completely vaccinated. Vaccination numbers continue to increase at a rate of close to three million doses per day.
With vaccinations steadily rising, the economy is showing signs of recovery as well. Unemployment remains higher than during non-pandemic times. Approximately 719,000 people initially applied for unemployment insurance in the last full week of March, slightly up from the previous week. (A typical pre-pandemic week saw about 250,000 new unemployment applications.) But the average over four weeks is the lowest its been in over a year. Consumer confidence continues to climb, reaching its highest level since the start of the pandemic. Close to 41 percent of consumers also see business conditions improving over the next six months, up over 10 percent from the month before.
Consumer spending drives two-thirds of the country’s economy. And the third stimulus check has increased people’s spending power and likely boosted their optimism in the future. The ongoing vaccinations, which will eventually allow hard-hit parts of the economy to safely reopen, certainly help. All that additional spending, along with the release of pent-up demand, should lead to more jobs as companies hire to address consumer needs. With the economy opened up, a fourth round of stimulus checks becomes less necessary.
The American Rescue Plan Act passed along party lines. Republicans were not interested in spending anywhere close to $1.9 trillion, though some did support the third round of stimulus checks. They termed the package a “blue state bailout,” claiming it went well beyond the scope of COVID and would increase the deficit, leading to inflation.
The Democrats used a process called reconciliation to pass the bill in the Senate without Republican support. That allows budget-related matters to proceed with a simple majority rather than the filibuster-proof 60 votes. Given the rules, generally only one reconciliation bill can pass per fiscal year. But the fiscal year ends in October. So another stimulus package could be brought forward in the fall and, in theory, pushed through with reconciliation. Otherwise, it would need at least 10 Republican votes, along with every Democratic vote.
But the Biden administration has other priorities. One of its biggest is passing the recently introduced infrastructure plan, which also faces Republican opposition. The American Jobs Plan was unveiled last week. Worth $2 trillion, it aims to rebuild roads, repair bridges, do away with lead pipes, modernize the country’s electric grid and much more. It does not include another stimulus check. Republicans oppose the plan, in part, for its reliance on higher corporate taxes.
The American Family Plan is due to be announced in a few weeks. What it will contain has not been announced, though it could cost another $1 to $2 trillion. According to the administration, funding would come from higher taxes on wealthy individuals. Republicans will likely also oppose these tax increases.
Plenty of negotiating and possible paring down seems inevitable before either plan comes to a vote. And Biden will face an uphill battle attracting 10 votes in the Senate in both cases. As a result, Democrats may very well be anticipating the need for another round of reconciliation to push through a signature piece of legislation. The odds of them using it to pass a fourth stimulus check instead are low.
What Other Aid Is Coming?
While a fourth stimulus check is unlikely, more direct payments to Americans have already been signed into law. The American Rescue Plan Act includes an improved Child Tax Credit and extended unemployment benefits.
Under the revised Child Tax Credit, the Internal Revenue Service (IRS) will pay out $3,600 per year for each child up to five years old and $3,000 per year for each child ages six through 17. Payments will be issued automatically on a periodic basis from July to December of 2021, with the remainder issued when the recipient files their 2021 taxes. (Many expect that “periodic” will actually mean monthly or possibly quarterly, but the IRS still has to determine that.) The benefit will not depend on the recipient’s current tax burden. In other words, qualifying families will receive the full amount, regardless of how much — or little — they owe in taxes. Payments will start to phase out beyond a $75,000 annual income for individuals and beyond $150,000 for married couples. The more generous credit will apply only for 2021, though Democrats will probably look to extend it.
The American Rescue Plan Act also extended the weekly federal unemployment insurance bonus of $300 through Labor Day. Recipients with household incomes below $150,000 will not have to pay taxes on the first $10,200 in unemployment benefits. Those eligible for Pandemic Emergency Unemployment Compensation (PEUC), which covers people who have used up their state benefits, and Pandemic Unemployment Assistance (PUA), which covers freelancers and gig workers, will also see their benefits extended through early September. PEUC runs out after 53 weeks. PUA expires after 79 weeks.
The far-reaching American Jobs Plan includes some elements not traditionally associated with infrastructure. Those range from $213 billion earmarked for affordable housing to $100 billion set aside for workforce development among underserved groups. The plan also looks to increase pay for caregivers who tend to the elderly and disabled. Each of these efforts would mean more money for those affected. On a broader scale, the plan also has the potential to create many jobs across a wide swath of the economy. The additional money in people’s pockets is still hypothetical, of course. The plan must still find its way through Congress.