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Stimulus Update: Another Check and “ Plus ” Payments Coming
If your income has fallen in the past year, you may be eligible for another round of stimulus checks after you file your 2020 taxes.
Staff Video, USA TODAY
Democratic lawmakers in both houses of Congress are calling for a fourth round of stimulus checks to help Americans who are still struggling financially during the coronavirus pandemic.
Such a move could lift more than 7 million people out of poverty, according to a recent analysis by the Urban-Brookings Tax Policy Center, a non-partisan think tank.
It comes as President Joe Biden is set to deliver his first speech in a joint session of Congress on Wednesday night, just before he marks his 100th day in office. Americans will be looking in his speech for clues about future economic impact payments.
Labor market and tax experts, however, do not predict that there will be any additional stimulus checks in the next relief plan as the economy continues to recover from the coronavirus-induced recession of the last year and the labor market is improving.
When will the additional payments be received ?: Over 730,000 catch-up stimulus checks sent to Americans in last batch
Why is it taking so long to get tax refunds this year ?: Some take the IRS 6-8 weeks in 2021
Even so, about two-thirds of Americans say the last check for $ 1,400 won’t last three months, according to a recent Bankrate survey.
Democrats are also pushing Biden to expand other stimulus measures, including the duration of unemployment benefits and a child tax credit payment program.
Republicans have raised concerns about the rapidly growing budget deficit as they debate more spending on coronavirus aid. Many of them also opposed the inclusion of the $ 300 weekly unemployment hike in the latest stimulus package passed in March, dubbed the American Rescue Plan, saying the amount was too large and discouraged Americans from returning. at work.
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While job growth is expected to strengthen in the coming months thanks to vaccinations and another round of stimulus through Biden’s “Build Back Better” proposal, economists believe it may take several. years for the labor market to heal. So far, the economy has recovered 13.9 million, or 62%, of the 22.4 million jobs lost in the pandemic recession.
“We need to look at the economy as a whole to see if there needs to be another round of direct payments,” says Elaine Maag, senior research associate at the Urban-Brookings Tax Policy Center at the Urban Institute. “Are we well? Are people still in pain? There is evidence that we are not out of the woods yet.
COVID aid could lift 7 million people out of poverty
The third round of economic impact payments from Biden’s US bailout could reduce the number of people living in poverty by 11.4 million, the Urban-Brookings tax policy center says in its analysis.
Housing instability and food insecurity remain financial problems for many Americans, economists say.
Another round of payments could lift an additional 6.6 to 7.3 million people out of poverty, depending on whether the payment is limited to citizens or made available to all, according to the Urban-Brookings Center for Fiscal Policy.
“There is a question before Congress as to whether we should be doing anything else with additional stimulus payments,” Maag said. “The bottom line is that we could further reduce poverty and provide additional help with another round of these general payments that smaller or more targeted measures simply cannot do.”
The third set of payments of $ 1,400 is distributed by the Internal Revenue Service. To date, 163 million payments have been disbursed since mid-March.
The first round of payments was $ 1,200, which was disbursed under the Coronavirus Aid Relief and Economic Security Act last spring. Then came $ 600 in aid for a December relief measure called the Consolidated Appropriations Act; Finally, millions of people received $ 1,400 as part of the US bailout package signed in March by Biden.
A call for recurring stimulus checks
Biden’s “Build Back Better” proposal includes last month’s US bailout, as well as the upcoming US Jobs Plan and the US Family Plan. Together, the American plan for jobs and American families would cost an estimated $ 4 trillion.
The US $ 2 trillion jobs plan aims to rebuild the country’s aging infrastructure, support electric vehicles and clean energy, and improve access to caregivers and their wages. To fund the infrastructure plan, the White House has proposed raising the corporate tax rate from 21% to 28%.
The U.S. plan for families, which is said to cost around $ 1.8 trillion, is expected to include investments in child care, paid family leave and education, paid for by a combination of wage tax increases to high income.
Biden is calling on Congress to raise taxes on wealthy Americans for the first time in nearly a decade to help fund his plan to bring relief to families and reshape the US economy. That would almost double the capital gains tax to 39.6% for people who earn more than $ 1 million a year. The current rate is 20%.
Some lawmakers have urged Biden to include more stimulus payments in the first part of his package via the infrastructure spending bill. At the end of March, a group of Democratic senators lobbied for recurring stimulus checks and an automatic extension of unemployment benefits as provisions of the package.
“We urge you to include recurring direct payments and automatic extensions of unemployment insurance linked to economic conditions in your long-term ‘Rebuild Better’ economic plan,” 21 senators wrote in a letter to Biden.
“This crisis is far from over and families deserve to be assured that they can put food on the table and keep a roof over their heads,” they added.
The effort was led by Sen. Ron Wyden, D-Ore., Who chairs the Senate Finance Committee.
It also included Senate Budget Committee Chairman Bernie Sanders, I-VT, as well as Senators Elizabeth Warren, D-MA, and Cory Booker, D-NJ.
Senators did not include a dollar amount on recurring stimulus checks. Separately, some Democratic lawmakers in January pushed for monthly payments of $ 2,000 until the pandemic was over.
Expansion of the Child Tax Credit
House Democrats are pushing the White House to make permanent a child tax credit program that would provide monthly checks of $ 250 or $ 300 to low- and middle-income families, depending on the child’s age .
The child tax credit has been increased to $ 3,600 per child under 6 and to $ 3,000 for children 6 to 17. Previously, the amount was $ 2,000 and families with little or no tax liability were not eligible for the program.
The White House announced on Wednesday that the Biden administration would seek to extend the credit until 2025 and make it fully repayable, although it has not responded to calls from Democrats to make it permanent.
The American Rescue Plan focused additional resources on children by increasing the Child Tax Credit, with the largest increases going to low-income families with children. It reduced child poverty more than any other age group, cutting it by more than half from 13.7% to 6.5%, according to the Urban-Brookings Center for Tax Policy.
Unemployment provisions
Democrats urged Biden to propose a permanent extension of jobless benefits. In March, Congress extended a weekly supplement of $ 300 until early September.
In a letter to the White House in April, nearly 40 Democrats said Biden should offer to increase the amount of unemployment benefits, extend the duration of the weekly allowance, expand the pool of eligible workers and implement a system that would tie payments on economic terms more tightly, according to the Wall Street Journal.
The American Rescue Plan extended two temporary federal programs until September 6: the Pandemic Unemployment Assistance Program, which provides assistance to self-employed, temporary workers and construction workers; and the Pandemic Unemployment Emergency Compensation Program, which provides an additional 13 weeks of benefits beyond the usual 26 weeks states provide to unemployed workers.
Instead of another round of general checks, lawmakers should focus on extending unemployment benefits and the child tax credit, as they could provide “longer-term solutions” to American households, according to Heidi Shierholz, economist at the Liberal Institute for Economic Policy.
The White House said Wednesday that Biden would “work with Congress to automatically adjust the length and amount of unemployment insurance benefits unemployed people receive based on economic conditions.”
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