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As we are getting close to the Senate beginning negotiations for another stimulus package, we are hearing more details about a potential second round of stimulus checks.
One of the most encouraging signals is now coming from President Trump. When he was asked about a second round of stimulus checks by reporters during a visit to a factory in Michigan, he stated:
“I think there will be a second payment to help Americans move on. We will give them money towards the end of the outbreak. Right now we are focusing on reopening the country.”
This is very encouraging considering that one of the last times that he was asked about another round of checks, he sort of punted and instead reiterated his interest for payroll tax cuts.
This statement comes at a time when Treasury Secretary Steven Mnuchin stated there is a “strong likelihood” that another COVID-19 relief bill will be needed while emphasizing patience for the process.
“We are going to step back for a few weeks and think clearly how we need to spend more money and if we need to do that. We’re going to carefully review the situation and I think that there is a strong likelihood we will need another bill, we just have $3 trillion we’re pumping into the economy,” said Mnuchin.
So it’s really starting to sound like a second payment is going to happen but that it could be a bit delayed.
The soonest I could see a second round coming out would be toward the beginning of July based on how long it took for prior payments to come out.
But based on some of the language from people like the president it sounds like they may be targeting a timeframe closer to the end of the outbreak. When exactly the “end of the outbreak” will be is anybody’s guess but I take it to mean that this could extend the timeline way out into the fall or perhaps even beyond.
That’s not a stretch considering that many Americans won’t even receive their first payments until August or September.
Original post 5/15/20
Despite surveys clearly showing that Americans will need more support from the government over the next few months, there’s been a lot of back-and-forth over whether or not the government will be willing to send out another round of stimulus checks.
From the get go, it’s been pretty clear that another package containing a second round of direct payments would pass the House of Representatives which is controlled by Democrats.
Those Democrats are set to vote on the $3 trillion stimulus package today and we should know something very soon although it won’t really come as a surprise if and when it is approved. The record-setting package not only contains a provision for more stimulus checks but also for some of the following:
- Extending the $600 per week unemployment benefits in CARES 2 through January
- Nearly $1 trillion in aid to state and local governments
- Hazard pay for some essential workers
- Expanding coronavirus testing, contract tracing and treatment
- Enhancing tax credits for employers to keep workers on their payroll
- Providing full COBRA subsidies for those who lost their employer-provided health care coverage
- Additional money for the U.S. Postal Service
- $175 billion in support to help renters and homeowners make monthly rent, mortgage and utility payments.
Getting that package passed through the Senate and approved by the White House a.k.a. the president is a different matter.
Over one month ago, we heard Trump quoted as saying that they are seriously considering another round of direct payments. That made a lot of people optimistic that the second round could be on the way in the near future.
But then only a couple of weeks after that quote, President Trump was asked again if he was in favor of a second round of stimulus checks.
Instead of reiterating that he is considering another round of checks, he kind of punted on the issue and instead talked about how he was in favor of payroll tax cuts which have been a major point of consideration for the GOP.
That statement, along with other statements from GOP leaders, really brought down the optimism for another round of stimulus checks.
However, according to a new anonymous source that spoke to CNBC yesterday, it looks like the White House will likely support another round of stimulus checks.
The White House did not explicitly state this support in an official statement but they did release the following:
“As President Trump has said, we are going to ensure that we take care of all Americans so that we emerge from this challenge healthy, stronger, and with economic prosperity, which is why the White House is focused on pro-growth, middle class tax and regulatory relief.”
So that official statement is very vague and you can’t read too much into it but if the source from CNBC is legitimate, then I think it is highly likely that the president is potentially on board with another round of checks.
His support may not be everything but it could help persuade some Republicans in the Senate to get on board which may be necessary for this bill to pass.
I think it’s pretty clear that as the HEROS Act is currently drafted, it’s not going to pass the Senate. At least one member of the Republican-controlled Senate has described the bill as dead on arrival. So things are not exactly looking very promising.
But as for a second round of payments, it’s starting to look like support for the second round of checks will be stronger than initially expected.
One of the lingering questions though is if the GOP decides to get on board with more checks, will this new criteria for stimulus checks be passed or will the GOP and/or White House insist that the same criteria used for the first round of funding be used?
I think Democrats knew that the plans for payments of something like $2,000 for six months or longer were simply too extreme to be considered by the GOP. But by offering a more modest amount and by tweaking with the eligibility, they probably felt like these measures stood a better chance of getting approved.
The bulk of the eligibility requirements are still the same. The new round allows for the same payments of $1,200 for individuals or $2,400 for married couples who filed jointly.
But it would also add $1,200 per dependent instead of the $500 in the first package.
In addition, there are several other key differences between the bills that expand eligibility to more dependents and also prevent people being excluded such as those who owe child support.
Some of those new eligibility additions might be problematic for some in the GOP party.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.