Fourth Stimulus Check: Latest Developments Indicate More Indirect Stimulus

Stimulus Check
Stimulus Check

The demands for a fourth stimulus check haven’t died down as more Democratic lawmakers speak up for additional direct economic support for Americans. An online petition by Americans in support of extra stimulus payments has received more than 2.2 million signatures. And even as President Biden debates over the fresh plans for the infrastructure and families, hope floats for a fourth stimulus check.

President Biden continues to be preoccupied with pushing through the American Jobs Plan, his plans for overhauling the American infrastructure. If successful it could rival in magnitude the interstate highways plan decades earlier. It would create millions of jobs and help build the infrastructure, such as roads and bridges, tackle climate change and shore up the education system, the telecom and internet infrastructure, and boost services like elderly care.

The 4th Stimulus Check: Progress So Far

The American Rescue Plan signed in March this year included three direct stimulus support including the up to $1,400 Economic Impact Plan, the Child Tax Rebate, and the extended Federal unemployment benefits.

A couple of stimulus bills are awaiting approval of both the Houses, the American Jobs, and the American Families Plan. But neither plans have included any proposal for any direct stimulus checks as of now.

But an increasing number of Democratic lawmakers are pitching for including a stimulus check that has to be immediate to help Americans tide over the economic downturn that continues to hurt the poor and middle-class Americans.

stimulus check
stimulus check

More Lawmakers Pitch In For Additional Stimulus

10 progressive Democrats including Senators Bernie Sanders and Elizabeth Warren have requested President Biden to add regular stimulus checks to any new stimulus proposals.

They have urged the President to include an automatic extension of unemployment insurance linked to economic conditions and more direct stimulus payments in the Build Back Better economic plan. 21 more Democratic lawmakers also pitched in a few weeks later.

And as recently as May 17, House Ways and Means Committee members have moved for additional stimulus checks. They have commented on the continuing poverty plaguing Americans and noted that a majority of Americans continue to depend on the stimulus check for essentials including food, mortgage and rent, utilities, and paying off high-interest loans.

The Latest Stimulus Plan In 2021

The American Rescue Plan includes 3 direct stimulus payments. The third stimulus check of up to $1,400, officially named the Economic Impact Payment is the biggest and has given more than $388 billion starting March 2021. The payments will continue through December 2021.

The Child Tax Credit is giving $3,600 max per child to families. The payment will be partially given as monthly checks starting July. The rest will be settled as part of the 2021 tax returns filed next year.

An extended federal unemployment contribution worth $300 per week and assistance to freelancers and gig workers was extended till September 6, 2021. But some states are opting out of this scheme.

President Biden’s American Families Plan

Stimulus Checks
Stimulus Checks

The proposed American Families Plan could be more focussed in its approach and target sections of the society that are in more immediate need of stimulus support.

It includes additional plans like the proposal to turn the child tax credit into a permanent one. President Biden has already proposed expanding the CTC to 2025. Several Senators including Senator Mitt Romney, Utah, support his proposal and say that such a move would free millions of families with children from the clutches of poverty.

The minimum wages have stagnated and have even gone down after adjusting against inflation. Many lawmakers continue to try to increase the minimum wages from the present low of $7.25 an hour. They have proposed a minimum of $15. Senators Kyrsten Sinema and Mitt Romney have supported the hike, though some have said that $11 at this stage could be acceptable.

The Picture Remain Grim

Across the nation, around 16 million people continue to receive jobless assistance in various forms. The unemployment level continues to stand at 6.1%, way above the pre-pandemic levels of 3.5%. food services and hospitality continue to suffer the most.

The $1,400 stimulus check is not expected to last long for most Americans. Food and housing costs continue to be at the top along with savings. It indicates that Americans continue to remain skeptical of immediate recovery in the economy.

A Brookings Institute report has revealed that the hike to $15 per hour could give financial independence to 37% of American households.

Extending unemployment benefits beyond September 2021 is another idea that some Democratic lawmakers have proposed. But with several states cutting down on the unemployment support, even Democratic members have backtracked on going ahead with the proposal beyond September 6.

Congress will also be approached to invest around $400 billion in expanding the affordable community-based support for aged Americans and citizens with disabilities. The proposal has targeted low-wage workers across industries, a disproportionate of whom are colored women. 

There has been a perceptible improvement in recent weeks starting with a surge in hiring. But millions continue to hurt due to reduced income. Many are unable to tap into aid programs. Only 4 out of 10 jobless workers benefit from unemployment aid. Many jobless workers do not apply for aid due to the long waiting process while many think that they do not qualify. Americans continue to live paycheck to paycheck.

Only a third of Americans believe the rescue plan will help them directly. It indicates that households continue to hold out hopes of more direct stimulus checks to see them through the immediate future.

As of now, the only immediate hope of direct stimulus for American families continues to be the child tax credit, at least for 2021. But with more savings, deficit spending, the successful vaccination program, the infrastructure boom, and the general euphoria surrounding the end of the pandemic could fuel an economic boom that could last till 2023 predicts Jamie Dimon, JPMorgan Chase CEO.

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