Could There Be Another Stimulus Package? What You Need to Know
As the country slowly begins to reopen after the economic shutdown resulting from the coronavirus global pandemic, the death toll has continued to rise and is on track to top 150,000 deaths. The unemployment rate is also on an upward track, with nearly 13.3% of Americans unemployed. The increase may lead to a rise in poverty, since more people are out of work and struggling to survive. It is with this and other economic difficulties in mind that the US government is looking at putting out another stimulus package, similar to the CARES (Coronavirus Aid, Relief, and Economic Security) Act which was signed into law at the end of March 2020.
While many had hoped the first round of these $1,200 stimulus checks would help Americans make it through the worst of the shutdown, the pandemic has continued to wreak havoc on the global economy longer than anyone initially suspected that it would. Now the debate has turned to whether or not a second stimulus package is necessary, and if so, what exactly it should entail.
Could A Second Check Help?
The goal of a second stimulus check would, of course, be similar to the first: helping businesses and individuals to get through the worst of the economic downturn caused by the coronavirus. With increasing levels of unemployment and the prospect of one of the worst recessions in decades continuing for some time, Americans are continuing to express growing concern for the global economic slowdown. Plans for a second stimulus package are continuing to take shape slowly, with most of the concern pertaining to how and where exactly to distribute the funds.
Ideas for a Potential Stimulus Package
There have been a few ideas tossed around in the White House about potential inclusions in a new stimulus package. The president has been openly supportive of a second round of stimulus checks, and White House trade adviser Peter Navarro has tweeted that the president is hoping to obtain $2 trillion for the next stimulus package. Some possibilities that have been mentioned for the next stimulus package include reducing unemployment payments for the second half of the year to $250 or $300 per week rather than the current enhanced benefits of $600 a week (expiring July 31st). Republicans believe that reducing unemployment payments could motivate Americans to start finding work if they lost their jobs during the pandemic. The president is also looking at payroll tax cuts and potential tax breaks for those travelling domestically in the next year, hopefully to encourage increased domestic tourism.
The Heroes Act
While the first foray into a second stimulus package passed the House of Representatives on May 15 of this year, it has not yet passed the Senate and is therefore not yet law. Many doubt it will pass at all, as both the White House and Senate majority leader Mitch McConnell have essentially dismissed it outright, but it can at least provide a glimpse into some of the ideas that politicians have proposed for the second stimulus package. The bill at least partially seeks wide-ranging benefits for those living in the US who do not have American citizenship. Like the first stimulus bill, the Heroes Act proposes a $1,200 stimulus check for every American, with limits based on adjusted gross income (AGI). Those making less than $75,000 a year according to their 2019 (or 2018) tax return would receive the full $1,200, with the amount decreasing incrementally as your AGI rises.
Unlike the first stimulus bill, the second stimulus package proposes $1,200 for each dependent (the first capped dependents at up to three children, $500 each). Under the Heroes Act, dependents include children over the age of 17, college students, disabled relatives, and even taxpayers’ parents. The maximum stimulus payment for a household would be $6,000, with five family members at $1,200 apiece, decreasing as your AGI rises. Despite what many Republicans would prefer, the Heroes Act proposes keeping the enhanced unemployment benefits in place until January of next year. It also would allow non-US citizens who file tax returns and otherwise comply with federal law to qualify for a stimulus payment, something that was not a part of the original stimulus bill.
Republican Proposals
Republican leaders have proposed that the second stimulus bill be more narrow in scope at nearly $1 trillion (as opposed to the $2 trillion for the CARES Act and $3 trillion proposed by the Heroes Act). Senate majority leader Mitch McConnell has proposed that such a bill include provisions to help protect physicians and businesses from liability related to coronavirus lawsuits and provide assistance to health care organizations and small businesses. The president also appears to support a potential tax credit of up to $4,000, a so-called “Explore America” tax credit designed to help stimulate the particularly hard-hit tourism industry in the US.
It remains to be seen what a second stimulus package will actually contain, but the odds are high that there will be something on the table soon.
