Personal Finance

Economists are calling for more stimulus checks. Here's where assistance plans stand

Share
Key Points
  • As Washington lawmakers look to restart talks for more coronavirus relief, one group of economists is saying more stimulus checks should be part of the deal.
  • House Democrats have pushed for more one-time payments. But Senate Republicans have cut that money out of their most recent bill.
  • More stimulus checks could help "get families and the economy back on track," a group of more than 125 economists wrote in an open letter. Here's what we know about where that aid stands.
VIDEO1:3201:32
Economists beg Congress for a second round of stimulus checks

For Americans who have had a tough year financially amid Covid-19, a second set of $1,200 stimulus checks would provide some much welcome relief.

But lawmakers on Capitol Hill still need to work out their differences before they can approve another coronavirus stimulus package that will trigger those payments.

Now, a group of more than 125 economists including Jason Furman, a former top economic advisor to President Barack Obama, is calling for more direct cash payments to American families to help them weather the economic effects of the Covid-19 pandemic.

The initiative was organized by the Economic Security Project, an advocate of guaranteed income.

More from Personal Finance:
Unemployment is falling. Long-term unemployment is ballooning
What Biden's student loan forgiveness plan would mean
They lived paycheck to paycheck. Then the pandemic hit

"We urge policymakers to use all the tools at their disposal to revitalize the economy, including direct cash payments, which are one of the quickest, most equitable and most effective ways to get families and the economy back on track," the economists state in an open letter.

In addition, the economists call stimulus checks an "essential tool" for preventing poverty from increasing more. They also cite research from the Urban Institute, which found that two additional stimulus checks could help keep about 14 million people out of poverty.

An additional round of stimulus checks should coincide with more aid including unemployment, state and local aid, more Supplemental Nutrition Assistance Program (SNAP) benefits and childcare funding, the economists said.

The federal government sent out approximately 160 million stimulus checks starting in April. The payments, which were authorized by Congress through the CARES Act, included up to $1,200 per individual, $2,400 per married couple and $500 per child under 17.

VIDEO1:3901:39
More than 100 economists call for new round of stimulus checks for Americans

Full payments went to individuals with adjusted gross income of up to $75,000 and to married couples who file taxes jointly with up to $150,000 in income. Payments were reduced for those with incomes above those thresholds, and phased out completely at $99,000 for individuals and $198,000 for married couples who file jointly.

Washington lawmakers have been negotiating for months on a new coronavirus stimulus deal.

At times, another set of stimulus checks has seemed like a sure thing. At other times, those payments have seemed less likely, amid efforts to keep the total cost of the prospective aid package down.

Here's how those negotiations have evolved to where we are now.

May 15: House passes HEROES Act

In May, the House of Representatives passed a bill called the HEROES Act that called for more than $3 trillion in spending. The legislation included additional $1,200 stimulus checks.

This time, dependent checks would be raised to $1,200, for a maximum of $6,000 per family. The legislation also sought to expand eligibility for dependents over age 17 and for people who do not hold U.S. citizen or resident alien status.

July 9: Capping eligibility at $40,000 in income?

Speaker of the House Nancy Pelosi and Senate Majority Leader Mitch McConnell.
Reuters

Senate Majority Leader Mitch McConnell, R-Ky., said he would consider capping eligibility for a second stimulus check at $40,000 in income.

In response, Treasury Secretary Steven Mnuchin told CNBC, "We do support another round of economic impact payments. … The level and criteria we'll be discussing with the Senate."

July 27: Senate GOP introduce bill with $1,200 checks

McConnell introduces a package of proposals, called the HEALS Act, that includes a second round of stimulus payments.

The proposal calls for payments similar to the first round, with $1,200 per individual or $2,400 per married couple, plus $500 per dependent. This time, however, dependents over 17 would be eligible for the money.

In an interview, President Donald Trump said he wants the second stimulus payments to be more than $1,200.

July 30: GOP senators propose $1,000 stimulus checks

A group of Republican senators introduce a bill that calls for $1,000 stimulus checks for both adults and children. Under the proposal, a family of four could receive $4,000.

This time, all adult dependents would be eligible.

Leaders behind the bill were Sens. Bill Cassidy, R-La.; Steve Daines, R-Mont.; Mitt Romney, R-Utah; and Marco Rubio, R-Fla.

Aug. 13: Congress breaks without passing stimulus

Sarah Silbiger | Bloomberg | Getty Images

Approval of a coronavirus stimulus bill looks to be weeks away as congressional leaders decamp to their home districts.

While Capitol Hill leaders couldn't reach an agreement on other issues, one thing they seemed to agree on was those $1,200 checks. But the impasse would dash the Treasury Department's hopes of getting more one-time payments to Americans in August.

Trump tweets his frustration, saying, "Democrats are holding this up!"

Sept. 10: Senate Republicans fail to move small-aid bill

A Republican bill including about $500 billion in new aid fails to get the necessary votes to pass the Senate.

The proposal included enhanced unemployment benefits and more aid to small businesses. Notably, another round of stimulus checks was not in the bill.

Sept. 16: Trump says Democrats hold up payments

President Trump tweets that the Democrats are "heartless" and "don't want to give stimulus payments to people who desperately need the money."

Sept. 30: Both parties still want more $1,200 checks

Second $1,200 stimulus checks that are "similar" to the first payments will be in the next coronavirus stimulus package, Mnuchin said in an interview.

Though both parties are in favor of sending more direct payments, other issues continue to drag on negotiations.

Oct. 1: House Dems pass updated stimulus bill

House Democrats revise and pass an updated HEROES Act, bringing the total cost down by about $1 trillion in a bid to appeal to Republicans.

The proposal includes $1,200 stimulus checks, but with more generous terms than the first set. Dependents of all ages would be eligible for $500 payments.

Individuals with Taxpayer Identification Numbers also would qualify for checks, a change from the first payments, which required valid Social Security numbers.

Oct. 7: Trump seeks stand-alone legislation to send $1,200 checks

U.S. President Donald Trump speaks about prescription drug prices during an appearance in the Brady Press Briefing Room at the White House in Washington, U.S., November 20, 2020.
Carlos Barria | Reuters

As negotiations fail to move forward, Trump proposes stand-alone legislation on areas lawmakers agree on.

That would include a bill for $1,200 checks. While Capitol Hill leaders generally agree on the idea of more one-time payments, they would have to find a compromise on other terms, such as whether to expand eligibility beyond U.S. citizens and resident aliens.

Trump's proposal marks a reversal of the president's call to discontinue stimulus negotiations until after the election. The idea of stand-alone legislation is rejected by Democrats.

Oct. 12: Negotiations at 'impasse'

The White House has come up with an offer for a bigger stimulus bill, per Trump's wishes.

The package includes stimulus checks of $1,200 per adult and $1,000 per child. It also includes $400 per week in enhanced federal unemployment insurance through the third week of January.

House Speaker Nancy Pelosi, D-Calif., said negotiations remain at an impasse until the White House agrees to address certain issues, namely Covid-19 testing, tracing and treatment.

Oct. 21: $500 billion GOP Senate bill fails

Senate Republicans put forward a $500 billion to provide aid to Americans in certain areas, including $300 enhanced weekly federal unemployment benefits, more Paycheck Protection Program loans for small businesses and liability protections for businesses.

But the bill failed to get the 60 votes needed to pass the chamber.

Meanwhile, Pelosi and Mnuchin continued to hold discussions for a broader aid package. But the goal to have a deal in place by the end of the week did not pan out.

Oct. 26: White House backs 'targeted assistance'

VIDEO4:0104:01
White House economic advisor Kudlow: Stimulus talks have slowed, but not ended

"The talks have certainly slowed down, but they're not ending," Larry Kudlow, director of the National Economic Council, told CNBC.

Additional aid is needed with regard to enhanced unemployment assistance, PPP small-business loans, and aid to schools and airlines, Kudlow said. He did not mention second stimulus checks.

"There are specific targeted areas," Kudlow said. "We don't need a gigantic ideological political bill here.

"What we need is some targeted assistance," he added. "... That would be a great help."

Nov. 7: Joe Biden declared president-elect

It was a close presidential race, but Democratic presidential candidate Joe Biden was eventually declared the winner.

Though Biden won't formally take on the role until Jan. 20, experts say his leadership could influence stimulus talks now.

The president elect said he supports House Democrats' HEROES Act, which includes a second round of $1,200 checks. The stimulus plan outlined in his campaign platform also calls for more one-time payments as required.

Nov. 17: Lawmakers push to resume stimulus talks

House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., sent a letter to Senate Majority Leader Mitch McConnell, R-Ky., urging him to resume conversations around the next relief package.

"It is essential that this bill have sufficient funding and delivers meaningful relief to the many Americans who are suffering," Pelosi and Schumer wrote.

McConnell has pushed for the Senate to complete a small $500 billion bill that does not include stimulus checks. It remains to be seen whether he is willing to compromise to include more aid. The stimulus checks sent through the CARES Act amounted to more than $270 billion.