Personal Finance

Trump wants second stimulus checks to be more than $1,200. Experts question whether that's the right relief

Key Points
  • President Donald Trump said in a recent interview that he wants the second stimulus checks to be more than $1,200.
  • The maximum sum is one area Democrats and Republicans are discussing as they battle over how much money to provide Americans.
  • Experts question whether raising the total amount of the one-time checks would be effective.
U.S. President Donald Trump delivers a speech during a tour of the Double Eagle Energy Oil Rig in Midland, Texas, July 29, 2020.
Carlos Barria | Reuters

Lawmakers on both sides of the aisle are talking about sending a second batch of $1,200 stimulus checks to millions of Americans.

And now President Donald Trump is upping the ante, calling for the government to cut checks for more than that $1,200 figure.

"I'd like to see it be very high because I love the people," Trump said Wednesday. "I want the people to get it."

The president did not elaborate on how much higher he wanted the checks to be.

More from Personal Finance:
$600 unemployment boost almost over. For some, aid will fall by 93%
Americans more worried about Social Security amid pandemic
A third of small-business owners tapped personal funds to stay afloat

Trump's comments come after Senate Republicans introduced the HEALS Act earlier this week, their targeted $1 trillion plan for shoring up the U.S. economy. House Democrats in May passed their own bill, the HEROES Act, which would cost about $3 trillion.

VIDEO2:3502:35
Congress fails to agree on another Covid-19 stimulus deal—Here's what lawmakers are saying

Both parties are now working to come to a consensus on issues where they are divided, particularly unemployment insurance. The extra $600 per week in federal unemployment benefits expires this month. Lawmakers are at odds over how much extra help they want to provide to jobless Americans going forward.

The second stimulus checks would include up to $1,200 for individuals or $2,400 per married couple, plus $500 for dependents, according to the Republicans' HEALS Act. This time, however, the definition of dependents would be expanded to include adults. Last time, those payments were limited to children under age 17.

Both sides of the aisle apparently have come closer to an agreement on the second stimulus checks. Both bills call for sending up to $1,200 to individuals under similar terms to the first checks in their legislative proposals.

But a group of Republican senators on Thursday unveiled a new proposal calling for $1,000 stimulus checks for both adults and children with valid Social Security numbers. A family of four would stand to receive $4,000.

The government appropriated a total of approximately $300 billion toward the CARES Act stimulus checks. So far, the government has deployed about $260 billion of that money, the Treasury Department has said.

"If you increase the value of the checks, it would certainly increase the total cost," said Adam Michel, senior policy analyst at the Heritage Foundation, a conservative think tank. "If you're still going to stick to a $1 trillion target, you would have to reduce things elsewhere."

VIDEO0:4300:43
$200 per week extension of jobless benefits fails in the Senate

The payments may not provide the intended boost to the American economy because many people aren't spending because they're afraid to leave their houses amid the coronavirus pandemic, not necessarily because they don't have the resources, he said.

"This idea that these checks have been termed stimulus checks doesn't mean that they're actually stimulative in any way," Michel said.

Chuck Marr, senior director of federal tax policy at the Center on Budget and Policy Priorities, a nonpartisan think tank, said he thinks Trump's comments are "perplexing" in light of the proposals from both Democrats and Republicans.

Other forms of financial aid should come first, Marr said, including expanded unemployment benefits for people without jobs, eviction protections for those in danger of losing their homes and nutrition assistance for those with limited access to food.

"These are all very targeted, very important proposals that need to be in there first," Marr said. 

Stimulus payments would be helpful, he said, though they are somewhat broader in terms of whom they would help.

VIDEO3:2003:20
The average investor should be doing this during the coronavirus economic crisis