Recurring Stimulus Payments?
Although the IRS has issued more than 169 million payments in the third round of direct stimulus aid, some lawmakers are pushing for a fourth round of stimulus aid that would effectively send recurring payments until the pandemic ends.
The first round of stimulus payments was in March 2020, issued under the Coronavirus Aid Relief and Economic Security Act (CARES Act) and delivered $1,200 to eligible adults and $500 for eligible dependents.
The second round of stimulus payments was in December 2020, issued under a December relief measure. This relief came in the form of $600 payments per eligible person.
The third round of stimulus payments was in March of 2021, issued under the American Rescue Plan. This payment was $1,400 per eligible person. Due to delays, more than 2 million people received the third round of stimulus payments in July.
Despite these measures, millions of Americans remain in financial distress and almost one-quarter of Americans are struggling to pay their household expenses, according to census survey data that polled people during the last two weeks of August (1).
Unemployment rates still stand at 5.2%, which are higher than the pre-pandemic level of 3.5%. Although businesses are hiring, there are still approximately 5.3 million fewer people on payroll today than before the pandemic.
9.1 million people lost enhanced unemployment benefits on Labor Day, which is when the federal benefits expired (2). This wipes out approximately $5 billion in weekly benefits that had been flowing to unemployed workers, many of whom used this aid to pay for groceries, rent, and other essentials. Many states had ended their unemployment extension earlier than planned.
2.8 million people have signed a Change.org petition (3) calling on lawmakers to pass legislation for recurring $2,000 monthly payments. Some lawmakers have picked up on the idea. Twenty-one senators, all Democrats, signed a letter on March 30 to President Biden in support of recurring stimulus payments. This letter has pointed out the obvious thought that the $1,400 payment sent out by the IRS will not hold people over for long.
Meanwhile, some states are creating their own forms of stimulus payments (4). The Golden State Stimulus (5) from California will provide $600 for low- and middle-income residents who have filed their 2020 taxes. Florida and parts of Texas have authorized bonuses for teachers to help offset the impact of the pandemic.
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