Estimated costs of stimulus checks reveal how realistic second round will be

Even though the $2,000 a month recurring stimulus check proposal was not included in the recent HEROES Act proposal passed by the House of Representatives, it’s still getting some support among certain Democrats in Congress.

For example, last week Senator Harris accepted a Change.org petition (signed by 1.2 million) who supported the monthly check proposal, and Senator Harris stated she wanted to get other members of Congress on board.

But a recent analysis shows why that proposal is probably not realistic. And I think the numbers also put into perspective why an additional round of stimulus checks is realistic.

First, let’s take a look at the numbers for the first round of stimulus checks.

These are known as the CARES Act stimulus checks. They provided $1,200 for individuals along with an additional $500 for qualifying dependents. You are probably very familiar with them by now.

According to the the Institute On Taxation And Economic Policy (ITEP), this cost $268 billion and the average household received $1,670.

But what about the recurring $2,000 stimulus checks? Just how expensive would they be?

If those payments went out over a span of 10 months, they would cost close to $5.7 trillion with the average household receiving $35,180.

That is really an astronomical difference in price tag. In fact, the recurring stimulus checks would be almost twice as expensive as the initial proposed package of the HEROES Act.

Even if they only did the $2,000 a month proposal over one full month the cost would still be very high at $568 billion.

As far as the cost of the proposed second round of stimulus checks….

The Joint Committee on Taxation estimated that the HEROES Act stimulus check proposal would cost $413 billion. 

So an additional round of checks would still be very pricey but compared to recurring stimulus checks, it’s not so bad.

I don’t think there’s any way that a Republican controlled Senate would pass a $5.7 trillion stimulus package. (Most of us knew that the $2,000 a month checks were a pipe dream but I think these numbers just reiterate that.)

The $413 billion HEROS Act stimulus proposal seems more realistic, although it still is almost $150 billion more expensive than the CARES Act. 

That increase in price is due to the expanded eligibility for the second round of checks. Basically, more dependents will get checks and fewer people will be ineligible based on things like back child support owed.

I would not be surprised if Republicans require changes to the eligibility in order for a second round of checks to pass so that the price tag is closer to the first round of checks. But at least we know that the estimated cost of an additional round of checks is not exactly astronomical like recurring checks would be.

H/T

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