Stimulus Check Update: Will Americans See More Financial Aid Before The Election?
(CBSNewYork) -- In recent weeks, the hope of relief for the unemployed and struggling workers had grown increasingly faint. The first stimulus package is now a distant memory. President Trump's Lost Wages Assistance program is running out of money. And the economy continues to struggle through its worst crisis in generations.
But last week brought a renewed sense that a divided Congress could put together some sort of plan. That optimism came in the form of the "March to Common Ground" COVID Stimulus framework, issued by 25 Democrats and 25 Republicans calling themselves the Problem Solvers Caucus. The package seeks to tackle key areas of need, ranging from unemployment assistance to direct assistance for individuals and families. (Translation: additional jobless payments and the second round of stimulus checks.) It would also address school and childcare, along with testing and healthcare and aid to states and localities.
The framework would run for six months and include a system of boosters and reducers that would increase or decrease relief depending on the pandemic's severity. The plan could cost $1.5 to $2 trillion.
President Trump has voiced his support for a larger stimulus plan than Republicans have previously supported. Speaker of the House Nancy Pelosi is planning to keep the House in session until a deal can be reached. It's now, as it was before, a matter of agreeing on how much money should be spent. Can the deadlock be broken?
In general, Democrats hope to spend more, and Republicans less. In terms of a stimulus check, that could mean up to $1,200 per person ($2,400 for married couples) if your adjusted gross income is less than $99,000 per year ($198,000 per year). Democrats propose including another $1,200 per dependent for up to three dependents. Republicans want to limit the dependent payout to $500.
According to Giacomo Santangelo, who teaches economics at Fordham University and the Stillman School of Business at Seton Hall University, "if we believe that stimulus works and we want it to be as wide as possible, we don't want to limit it to just a small group of people. We want it to go to as many people as possible."
In terms of additional unemployment payments, on top of what individual states provide, Democrats are aiming to match the weekly $600 previously provided in the CARES Act. Republicans want to halve that to $300. The Problem Solvers proposal, mentioned previously, splits the difference at $450 per week for eight weeks, and up to $600 after that (though not more than someone's previous wage).
"You basically have two kinds of unemployment going on," says Santangelo. "The kind where employers told people to go home right now, but once things bounce back, I'm going to hire you back. And there are those kinds of employees where the economy said that your services are no longer necessary. When the economy comes back, they're not coming back. They're not getting those jobs back."
"So the money that's going out is going to do two things," says Santangelo. "It's going to tide people over who are waiting for their jobs to come back. But it's also extending aid for people who are never going to get their jobs back."
At this point in time, many if not most of those jobs fall in the second category.
The election is November 3rd, which doesn't leave a lot of time to work out a deal and then implement it. The House is scheduled to go on a break from October 2 until after the election but is prepared to stay in session. The Senate is set to break on October 9 also until after the election but could stay and vote if the House gives them a package.
There's always a chance that Congress passes a series of smaller bills, rather than one comprehensive bill. President Trump could also go the executive action route once again. Regardless of the method, the important thing is to keep the economy going.
"If consumption can be aided by putting money in hand, then you put money in hand," says Santangelo. "It is the whole purpose of a social safety net, like social security, like unemployment, like Medicaid. That there is a need. We don't want consumption to stop."