Lawmakers are running out of time to pass another coronavirus relief package before Congress adjourns for the holidays. A major point of contention is whether the U.S. will offer Americans another round of stimulus checks, the direct cash payments that helped millions of households weather the economic crunch caused by pandemic.
A $908 billion bipartisan proposal would leave out stimulus payments, focusing instead on providing jobless workers with an additional $300 in weekly unemployment aid. On December 8, Treasury Secretary Steven Mnuchin also proposed athat would provide stimulus checks worth $600 per person, although it would cut back on unemployment aid, according to the Wall Street Journal.
A Treasury Department spokesperson didn’t immediately respond to a request for comment.
Some senators, including Bernie Sanders of Vermont, are insisting that any new relief bill include another round of checks worth $1,200 for low- and middle-income Americans — the same amount offered under the $2 trillion Coronavirus Aid, Relief and Economic Security Act this spring.
“What I don’t understand is that at a time when, in many ways, the crisis is worse today than it was in March, why we are not responding accordingly,” Sanders said on December 10 in a Senate floor speech. “Again, we must make certain that every working family in this country receives a $1,200 direct payment, plus $500 for their kids.”
The politically fraught debate over additional stimulus funding is leaving millions of households in the dark about what aid, if any, they might receive over the next few weeks. For many people, the financial picture is dimming as winter approaches and coronavirus cases reach new daily highs.
At the end of November, more consumers said they were feeling a financial impact from the COVID-19 crisis, reaching almost 6 in 10 people and representing the second consecutive monthly increase of hardship, according to a new survey from TransUnion. Job growth around the U.S. also, raising concerns the economic recovery is losing steam.
Some consumers, meanwhile, say they need far more than another one-time payment of $1,200 to help them survive until the coronavirus vaccine is widely available next year.
“Our [COVID-19] numbers are bigger than ever and the scale of this pandemic is almost limitless, but the aid is not,” restaurant owner Stephanie Bonin told CBS MoneyWatch. She has a Change.org petition calling for Congress to provide people with $2,000 a month, which has received nearly 2 million signatures.
She added, “Whether PPP, whether the stimulus checks, one by one they have dried up and nothing else has been put in its place.”
December 26 “feels like a ticking time bomb,” Bonin added, referring to the date when unemployment aid is set to expire for. “None of it is enough — whether it’s $600, or a one time $1,200 check — none of it is enough to answer the need out there.”
Good news, bad news
The Treasury Department’s stimulus plan, which is backed by the White House, offers both good and bad news for cash-strapped Americans, according to Height Securities analyst Hunter Hammond. On the one hand, it suggests the Trump administration is willing to discuss a larger stimulus package, but it also muddies the waters for earlier negotiations on the bipartisan $908 billion plan. It also heightens “the push for direct payments,” Hammond wrote in a research note.
“We expect all sides will continue to negotiate and make offers, but investors should not expect a final deal (if one is reached) until the end of the week,” he added.
Lawmakers are likely to agree on funding for supplemental unemployment aid, which will expire on December 26 for some 12 million jobless workers, Hammond said.
In the meantime, Congress remains deadlocked over the inclusion of provisions on state and local funding, sought by Democrats, and COVID-19 liability protections Senate Majority Leader Mitch McConnell has prioritized.
Mnuchin said his offer includes funding for state and local governments as well as the liability shield, which would shield businesses, schools and other organizations from lawsuits charging them with failing to protect people from the virus.
But Mnuchin’s offer would also cut unemployment aid from the $180 billion proposed by the bipartisan bill to $40 billion, according to a joint statement from Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer. Cutting jobless aid “is unacceptable,” they said on December 8.
In the meantime, millions of U.S. families are struggling to pay their bills and layoffs. Among consumers who have been affected by the pandemic, about 8 in 10 are concerned about their ability to pay their bills – with half saying they’re worried about affording their rent or mortgage, according to TransUnion.
“Nearly two in five impacted consumers say they really need a future stimulus check and don’t know how they will get by without,” the credit reporting agency found.