- Republicans are worried about the costs of sending out more stimulus checks.
- Even some Democrats question the strategy.
- Still, the possibility of more cash payments isn't dead.
The $1,200 cash payments sent out as part of the CARES Act are likely already long gone for many Americans struggling amid the pandemic. Now, Republicans and Democrats are trying to figure out the best ways to deliver more help as jobless levels soar and other relief measures dry up. The Federal Reserve estimates the unemployment rate could spill over 30%.
House Democrats passed a $3 trillion stimulus bill earlier this month that would have given $1,200 to each American who earned less than $75,000 a year.
President Donald Trump quickly called the legislation "dead on arrival." Senate Majority Leader Mitch McConnell, R-Ky., has called for a "pause" in new relief funding. As a result, one writer for Forbes put the chances of another round of direct payments to Americans at around "0%."
"I think many Republicans are realizing that 'stimulus' checks are poorly targeted and not stimulative," said Adam Mitchel, a senior policy analyst at the Heritage Foundation. The checks go to people who are still employed and don't need the money, and aren't always spent in a way that adds steam to the economy, Mitchel said.
In the first stimulus package "there seemed to be a willingness to try just about anything and at any cost," he said. "Now that the initial frenzy has past, those initial ideas are being refined and thought through more clearly."
Instead of another round of stimulus checks, Republicans have rallied behind a proposal to cut payroll taxes. Although such a move would leave some Americans with bigger paychecks, critics point out that it would fail to help those out of work and hardest hit by the downturn.
Meanwhile, even some Democrats have voiced reservations about sending out another round of checks, saying that beefing up unemployment benefits would deliver more meaningful relief.
Still, the possibility of more cash payments isn't dead.
There are reports of support within the White House for another round of the checks. And Trump said earlier this month that he'd be "helping people out" and "getting some money for them." Republicans — some of whom have agreed that another stimulus bill needs to be passed soon — are likely to be influenced by the president's statements.
"Certainly the president's priorities are an important part of the negotiation process," Mitchel said.
Larry Harris, a finance professor at the University of Southern California Marshall School of Business, agreed, saying he expects there will be another round of stimulus checks in the end. "Trump will remain influential, as he and his loyalists appear to exercise substantial power over Republican funding," he said.
And the fact that we're in an election year could bode well for cash-strapped Americans, he said. "[Trump] believes, as many others do, that a strong economy will help his reelection efforts," Harris said. "These observations suggest that he will call for more stimulus checks."
The suddenness and depth of this financial crisis necessitates unemployment benefits and cash payments, said Felicia Wong, president and CEO of the Roosevelt Institute, a New York-based think tank. The unemployment system varies across states and many agencies are short on staff and funds. Indeed, there have been stories of people waiting more than eight weeks for the checks.
"The stimulus checks reach more people, more quickly," Wong said. She also pointed out that behind the oft-repeated sound bites, the policy has more bipartisan support than one might expect.
A majority of GOP respondents, 53%, said they approve of more money going directly to Americans, according to a CNBC/Change Research poll of 3,500 people this month.
That public support is likely to find more reflection in Congress as the economic fallout of the pandemic continues, Harris said.
"Stimulus checks will be increasingly attractive to politicians when it becomes apparent that many unemployed people will be losing their houses or going hungry if they do not get direct relief," he said.
Is your first stimulus check long gone? How would you put another check to use? Email me at Annie.Nova@Nbcuni.com