As the coronavirus pandemic continues to weigh on the world economy, lawmakers are working out ideas for another round of stimulus measures, including a second stimulus check, meant to help both businesses and households.
Americans are clamoring for more help: Three-quarters of 2020 swing-state voters are supportive of "sustained" direct economic impact payments, or stimulus checks, according to a recent poll conducted by CNBC and Change Research, while 84% of Americans overall want a second stimulus, a WalletHub survey found in April.
That's because 30% of Americans have experienced a drop in income since the beginning of the pandemic, a Bankrate survey released Wednesday found. The pain is mostly concentrated among younger people, who have the least wealth. Almost 20% have less in savings than they did before the crisis, and 16% have more debt.
Another survey, released in late April by Country Financial, is even bleaker. According to those findings, 49% of Americans say their level of financial security has worsened since the pandemic began, 61% say the pandemic has affected their ability to save and invest, and almost 40% say it's affected their ability to pay their bills.
These types of numbers are "shocking," says Greg McBride, chief financial analyst at Bankrate. "Realistically, the unemployment rate is over 20% and that doesn't even count those who've had their hours reduced." McBride says that millions of Americans are in dire financial need and it's good news that more plans are coming together in Congress.
The latest proposal, released on Tuesday by Democrats in the House of Representatives, is a 1,800-page bill called The HEROES Act that amounts to roughly $3 trillion in relief.
Here are some of the critical elements of the HEROES Act that pertain to individuals and households:
- Another round of economic impact payments of $1,200 per person and up to $6,000 for a household
- An extension of the $600-per-week federal unemployment insurance benefit through January (it's currently set to expire in July)
- About $200 billion for hazard pay for essential workers who face heightened health risks during the crisis
- $175 billion in rent, mortgage, and utility assistance
- Subsidies and a special Affordable Care Act enrollment period to people who lose their employer-sponsored health coverage
- More money for the Supplemental Nutrition Assistance Program, including a 15% increase in the maximum benefit
Video by Jason Armesto
There is a lot more, too, including $75 billion for expanded testing and contact tracing, $875 billion for state and local governments, money to shore up election safety, and even relief for the U.S. Postal Service.
But possibly the most important elements of the bill for struggling households are additional economic impact payments designed to offer direct help, an extension of beefed-up unemployment benefits, and assistance for housing payments.
The HEROES Act is, in effect, the opening round in a negotiation. Understanding that, the Democrats threw everything they wanted into the bill, aware that various pieces would have to be negotiated away as they worked with Republicans to hammer out a finished piece of legislation.
So far, Republicans aren't enthused. Rep. Kevin McCarthy, a Republican and the House Minority Leader, tweeted soon after the proposal's unveiling that it has "no chance of becoming law" and is a "waste of taxpayer time."
McCarthy's sentiment is being echoed by his colleagues. Michael Zona, a spokesman for Republican Senator Chuck Grassley, told NBC News that the proposal wouldn't be able to pass both chambers. The bill is "DOA [dead on arrival] in the Senate," Zona said.
Video by David Fang
Various Republicans are voicing concerns about the cost of this and previous stimulus packages. White House economic adviser Larry Kudlow announced on May 8 that the administration would not be entertaining the idea of more stimulus payments before June. And Senate Majority Leader Mitch McConnell said Wednesday that he doesn't feel there's urgent need to pass more stimulus legislation right now.
While it's unlikely that the bill in its current form will pass, that's not to say that some elements won't make it through. It's become increasingly clear that the initial $1,200 economic impact payment wasn't enough for most Americans and that Congress may need to do more. The question is what and, of course, when.
Late Thursday, the White House signaled that perhaps it would support the idea of more stimulus payments after all.
That would be good news for people who are struggling, McBride says. "The first round of [stimulus] checks were sorely needed, but the consensus is that it wasn't going to last people very long," he says. "There are households in definite need, and will be for some time to come."
Federal Reserve Chair Jerome H. Powell made a similar point on Wednesday when he said the economy could suffer "lasting damage" from the pandemic and the Federal government may need to offer more help. "Additional fiscal support could be costly," he said at a Peterson Institute for International Economics virtual event, "but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery."
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