The Federal Reserve raised the benchmark interest rate by half a percentage point, its most aggressive move to counter 4-decade high inflation. On the other end, states continue to come up with additional measures, including stimulus checks, to help ease the burden of inflation on lower-income people.
The Federal Reserve chairman, Jerome Powell, made an unusual direct address to the American people when he noted that the low earners were facing directly the burden of inflation. He reiterated the administration’s support for the people and said that they are strongly committed to restoring the stability of essential commodities and gasoline.
This move could mean a basic hike in bank rates in the months ahead. The central bank has also indicated that it will begin to reduce asset holding on its balance sheet of $9T. Investors have heavily relied on the Fed as an active partner to ensure the better functioning of markets, but the surge in inflation has made tightening necessary.
The Fed chairman said that the American economy was strong enough and well-placed to handle tighter monetary policy. He added that he foresees a softer landing for the economy despite the tightening of monetary policy.
States Move-In Strongly With Stimulus Check Support For Low Earners
Meanwhile, states have moved in strongly to counter the effect of high inflation on residents through multiple measures. While around a dozen states have initiated legislative measures to send relief payments to people, there are other supplementary measures, some already running and some proposed, to help residents out of the present rut.
Along with the proposed gas and transit cards for residents, California is also running a State Disability Insurance program run by the state’s Employment Development Department. It pays residents 55% of what they make at work owing to a non-work-related injury or illness. Such SDI stimulus checks may continue for up to a year.
These stimulus checks are also for people who might need to take paid family leave to care for sick relatives or a new child. These payments are for a brief period of up to 8 weeks.
People who are sick due to COVID-19 or are caring for a family member sick due to the virus will qualify for PFL or SDI benefits.
To be eligible for the SDI, residents must have California SDI tax deducted from their wages. They are nominal and come to around 1.1% of wages. Thus, a part of the income residents stands to lose will be replaced when they cannot work for one of the above reasons.
Most California employees are automatically covered under this State Plan. Some employers even instead offer private Voluntary Plans that provide coverage that is equal to SDI State Plan. They also have one other feature not present in state plans.
Residents who are business owners or self-employed can pay to get elective coverage. It only provides benefits for 39 weeks instead of a full year.
Pennsylvanians Could Receive Another $2,000 Stimulus Check From ARPA
Residents of Pennsylvania could receive an extra $2,000 stimulus check through the Opportunity Program worth $500M funded by the American Rescue Plan Act. Governor Tom Wolf reiterated that Pennsylvanians should not be forced to choose between groceries or utilities, gas or childcare. He said that the state has the means and opportunity to ensure that low earners do not end up struggling and would strive to ensure their success.
The Governor said that he has asked the General Assembly of the state to unite across the political divide to make this plan a success. He said that when every resident of the state succeeds, the commonwealth succeeds. He said that the state needs to immediately take the money out of its pockets in support of the residents of the state.
Pennsylvania has a reserve of Federal funds of $2B under the ARPA scheme. But action has to be taken before the end of next year or the funds will revert to the federal government. Senate and House Democratic leaders have expressed their commitment to support the program and implement it soon.
Under this program, households with an income of $80,000 and below will receive a one-off stimulus check worth $2,000.
Families who were most affected by the COVID-19 pandemic will receive support under the PA Opportunity Program initiated by the Governor. It will provide a boost even as the economy struggles to recover and unemployment numbers reveal a steady decline.
Representative Maureen Madden said that the program would be a boost for low-earning residents. She said that inflation continues to plague the economy even as it records a steady recovery and unemployment numbers continue to slide. The higher living costs impeding the steady recovery of working-class individuals and families, the lifeblood of the community.
The proposal worth $1.7B includes $225M to support small businesses, $204 as stimulus checks for property tax relief, and $325 towards the health care system. A further $450M has been set aside to invest in the preservation, conservation, and revitalization of the communities in Pennsylvania.
$200 Gas Tax Stimulus Check For North Carolina Drivers
North Carolina’s Democratic lawmakers have proposed a gas stimulus check and are trying to convince their Republican colleagues to support the plan. But Republicans are more interested in long-term tax cut measures instead of a one-time measure.
Senate Bill 897 introduced by the Democrats plans to dedicate $1.3 B out of the budget surplus of $4B that the state collected over the past year. The proposal is to give residents of North Carolina aged above 18 as of 31 March this year and who hold a state driver’s license to receive a tax rebate worth $200.
Supports have also proposed a future expansion of the stimulus check to include young residents but without hurting the bottom line of the budgeting process in North Carolina. If the proposal is approved, the stimulus check would come either as a debit card or a paper check.
The average gasoline price in North Carolina was $4.49 on 4 June while the national average stood at $4.82 a gallon. Gas prices have witnessed a rise of 55% in a span of one year and are just short of double over 2020 rates.