Millions of households continue to struggle with finances due to rising prices and the post-pandemic recession. the year 2022 saw inflation rates jump manifold to break 4-decade-old records. In the absence of federal stimulus check support, millions of low and moderate-income individuals and families struggled to match their income with the relentless increase in prices.
This unrelenting trend continues to assail them to this day. The main reason is that earnings in 2022 have been negative for most Americans, and the rise in wages, though substantial by normal standards. The 8% and above rise in inflation has been way above the rise in wages which has stayed at around 3.5% average.
Households have thus been forced into cutting back on essentials. There has been a substantial rise in wages for products and services across the spectrum. Right from gasoline to groceries, there has been a record increase in prices that has reached levels unseen in the past four decades.
The inflation rate has remained above the 8% mark consistently through 2022 and has even reached the 9.1% mark in June, the last time this happened was in 1981.
Since the pandemic struck in the first quarter of 2020, the US federal administration has passed multiple bills that paved the way for three stimulus checks, and other measures covering the whole of 2020 and 2021.
The first two stimulus checks that were passed in 2020 were at the peak of the pandemic. But the third stimulus check, under the American Rescue Plan Act signed by President Biden, came at a much easier time for Americans. People had been somewhat relieved by the amount from the two stimulus checks and were able to rest easier after receiving up to $1,800 each for the combined two stimulus checks.
The third stimulus check on the other hand brought in $1,400 plus other support measures that lasted them all of 2022. The expanded Child Tax Credit stimulus check was a part of the Rescue Plan. It was the most successful of the non-general stimulus checks as it brought millions of children out of the clutches of persistent poverty.
Renewed Interest Around The Chances Of A Fourth Stimulus Check Post The Midterms
President Biden’s historic American Rescue Plan Act changed the way stimulus checks are perceived and allocated in the US. While there is little doubt that people are a shade better off than they were at the height of the pandemic, there are millions who have been forced into desperate measures. People have cut back on expenses or picked up two shifts of work to sustain their families.
An all-around increase in prices has led to people struggling with expenses. It has forced parents to skip meals or save on medicines, which could prove detrimental for the elderly.
President Joe Biden made a significant tweet at the end of 2022. He spoke about pushing through historic legislation that would lead to the creation of well-paid jobs. He ended his address with the words that he was looking forward to even more progress in 2023. This has led to speculation that another round of stimulus checks could be on the cards.
President Biden said that there was much that needed to be done and the administration has worked towards lowering costs for families including lower cost of gasoline which has seen a marked easing of costs at the end of the third quarter.
While the stimulus checks do not bring in riches for beneficiaries, for several families, it was the only source of income. It helped them put food on the table, and helped prevent homelessness. It was also the only time that families could give regular meals to their children and the rate of child poverty was the lowest in decades.
But other administration officials have discounted the immediate possibility of any stimulus checks from the federal government in 2023.
The hurdles in the way of further stimulus checks in 2023 are daunting. Not only is the House no longer under the control of the Democrats, but the Senate also continues to be split almost right down the middle. A couple of disruptive Democrats can derail any moves to bring in more stimulus checks.
It happened in 2021 when Democratic Senators Joe Manchin and Krysten Sinema derails the whole process to extend the expanded Child Tax Credit stimulus check through 2025.
It will take more than mere wishing by President Joe Biden to change the situation on the ground. Trump continues to exercise a great degree of control over the Republican Party. This is despite the chances of the former president facing criminal charges for trying to scuttle the 2020 presidential election.
State Stimulus Checks Continue Into 2023
It was the intervention of the states that enabled residents to receive some form of inflation relief payments. But the money that they received was partially due to the Rescue Plan funds under ARPA that President Joe Biden signed immediately after coming to power in January 2021.
The funds given to states and other local bodies had a certain degree of independence and states could spend the money as they saw fit. And most of it went towards supporting residents through inflation relief checks.
California was one of the few states that have dipped into their resources. The Golden State has a huge budget surplus that is close to a hundred billion dollars. It used part of the funds to send out the Middle-Class tax rebate to residents.
Residents who have a joint Adjusted Gross Income of 1$150,000 or less will get the highest amount of $1,050 if they include dependents. Individual break up for this tier is $350 for each filer plus another $350 for a dependent. The highest amount of AGI that is allowed under this scheme is $250,000 for individual filers and $500,000 for married couples filing jointly.
All income is the Adjusted Gross Income for California for 2020. Residents who failed to file their returns by October 15, 2021, will not receive the stimulus check. the stimulus check amount decreases with the rise in each income tier.
The California Middle-Class Tax Rebate is expected to continue through January 2023.
