Supplemental Security Income stimulus checks worth $841 will go out to millions of citizens within July 2022. The 2022 federal benefit stimulus check is $841 for individuals and $1,261 for couples. The exact amount though may vary depending on the income and living arrangements of the beneficiaries.
Many SSI beneficiaries may also qualify for Social Security benefits and also food assistance under the Supplemental Nutrition Assistance Program (SNAP). Both Social Security and SSI are administered through the SSA, whereas SNAP gets funds from the dept. of agriculture and food and nutrition services. The latter is administered at the state level.
Around 8M citizens will receive the benefits. It is expected to help handicapped people of all ages, including children. The $841 check is the maximum that an individual can gain, and it could be as low as $621. There has been a 509% increase in COLA (cost of living adjustment).
The SSI stimulus check is linked to the monthly income and decreases with an increase in income declared. Individuals are allowed only $2,000 in assets, while for couples the figure is $300.
Stimulus Checks Benefitted Citizens At A Crucial Juncture
The stimulus check proved a big boon for Americans hit hard by the economic downturn during the long period of the pandemic. It helped in several tangible ways, including reducing poverty by a big margin and keeping the low and moderate-income earners afloat throughout the lockdown period and after.
Around 11.7M people were helped out of acute poverty thanks to the successive stimulus check starting in March 2020. The US poverty rate subsequently fell to a low of 9.1% from a high of 11.8% in January 2020. The 2021 rate of poverty fell even more to 7.7% thanks to the generous third check, the Economic Impact Payment under the American Rescue Plan Act signed by President Biden in March 2021.
The figures clearly demonstrate that the nation saw a dramatic drop in poverty thanks to the successive stimulus checks. It was also instrumental in helping the economy recover in a record period in the last two quarters of 2021, which saw record growth in the economy.
But Stimulus Checks May Have Contributed To Inflation
While the stimulus check payments undoubtedly helped a large section of the population, they may have played a role in the record inflation rate that has been affecting rates in 2022. The inflation rate began rising in the last quarter of 2021 and stoked higher prices of gas, essential items, and utilities.
Though other factors played a major part in the high inflation rate, including the war raging in Europe and the global supply chain gridlock, the difference between the inflation rate in America and Europe suggests that the stimulus check may have contributed at least partially to it.
A recent study by San Francisco Federal Reserve researchers suggests that inflation contributed around 3% to the rise in inflation by the end of 2021, reaching its highest point since 1981.
American Struggle As The Stimulus Checks Dry Up
Americans have been hit hard as a consequence of the inflation, especially as they have no more stimulus check support to look forward to. But back in 2021, economists had sounded a warning about the third stimulus check, especially the extent of the stimulus check. They warned that it could potentially overheat the brittle economy and lead to an environment ripe for inflation.
Many economists believe that the check played a key role in generating excessive demands as citizens had ready cash in hand and were free of credit card debt to a large extent thanks to the successive stimulus checks.
People began spending more on goods than on services and this spurred inflation to a great extent. The boost in demand for goods was enormous after the third stimulus check amount reached Americans.
But Federal Reserve officials also realized that putting too little into the US economy was a far greater danger than pumping in too much. It shows that they were wary of inflation, but were not prepared for the extent of it.
Politicizing The Stimulus Check Complicated Matters
Americans received around $2000 individually within a span of 3-4 months through the last two checks. The decision on the amount though was more political than backed by sane economic considerations.
The CARES Act received near-unanimous dual-party support in March 2020. But the period of his transition was marked by several political decisions. At the end of his term, a desperate Trump struggling to survive for another term, pushed for an extra $2,000 stimulus check which was blocked in the Senate by the Republicans, worried at the size of the amount.
Ultimately the amount of the second stimulus check was pared down to a more modest $600. But ground support for a bigger stimulus check remained alive among the population.
With the Democrats gaining control of the government, they moved towards a bigger stimulus check as the Georgia run-offs approached. The win of both the seats by the Democrats encouraged Biden to go for the $1,400 stimulus check to match the total of $2,000.
President Biden Felt He Would Be Committing A Mistake By Pumping Too Little Money Into The Economy As In 2009
The political compulsion pushed Biden to pass the larger amount though ideally, the third stimulus check should have been much smaller at that stage. But Biden had already committed himself to a $1,400 third check. People were promised a $2,000 stimulus check and as the incoming president, he had either to ensure that the two checks added up to $2,000, or it would have been a loss of face for the new president.
Most policymakers underestimated or ignored the threat posed by rising a large stimulus check to high inflation rates. Biden did not want to repeat the previous mistake in 2009 he oversaw as a vice-president of putting too little money in the hands of citizens.
The US had slipped into a deep recession after the crash of 2008. The reluctance of Congress to pump in more money was blamed then for the crash. It was a long and tough climb then out of the recession and Biden did not want that to happen.
Pumping in more money directly into the economy through the stimulus checks seemed a sane option both politically and economically at that juncture. But a year after that decision, the situation turned to haunt the President before the midterms in November. 2022.