Congressional leaders on Sundayon a $900 billion economic relief package that includes to Americans and $300 in enhanced unemployment for the next 10 weeks, House Speaker Nancy Speaker and Senate Minority Leader Chuck Schumer said.
The $600 checks will only go out to individuals making less than $75,000 a year or couples making less than $150,000. Similar to the CARES Act, individuals making between $75,000 and $100,000 will receive gradually smaller payments while individuals making $100,000 or more will not receive a stimulus check.
Dependent children will be receiving $600 this time, rather than $500.
The deal was based on a $908 billion bipartisan proposal, which initially left out so-called stimulus checks, focusing instead on providing jobless workers with an additional $300 in weekly unemployment aid. But a last-minute addition to the package enabled another round of payments — even though the $600 checks represent half of the $1,200 payments distributed to about 160 million Americans under the $2 trillion Coronavirus Aid, Relief and Economic Security, or CARES, Act this spring.
Some people said the $600 payments would be far too low, with former Secretary of Labor Robert Reich writing on Twitter that the package comes at a time when COVID-19 infections and deaths are far higher than in the spring.
Some senators, including Bernie Sanders of Vermont, had insisted that any new relief bill include another round of checks worth $1,200 for low- and middle-income Americans. Some economists echoed some of Sanders’ concerns, noting that while the $900 billion package was better than nothing, it fell far short of the funding needed to get families and the economy on stronger footing.
More funding may be necessary after President-Elect Joe Biden is inaugurated in January, noted Oxford Economics’ Gregory Daco on December 21.
“The reality of an alarming health situation, softening labor market and weakening demand as Biden takes office next month will prompt calls for further fiscal stimulus,” he noted.
Punting on state and local aid
The latest deal is based on a $908 billion proposal from a bipartisan coalition of senators. But because that package included $160 billion in aid for struggling, which many Republicans objected to, as well as a liability shield for businesses, which many Democrats opposed, the group split the proposal into two bills — essentially carving out the controversial issues into a smaller, separate package that can be argued over at another time.
Holding off on $160 billion in funding for state and local governments was key to finding support for another round of stimulus payments, according to analysts at Raymond James. The $600 per-person checks will cost about $166 billion, according to the summary released by lawmakers.
Jobless benefits: $300 per week
The $900 billion measure will help millions of jobless workers by adding 11 weeks to the unemployment programs that are now set to expire by the end of December. The Pandemic Unemployment Compensation (PUC), which had provided $600 a week to jobless workers until it expired in July, will be renewed with weekly benefits of $300.
The plan also extends a federal eviction moratorium by an extra month, through the end of January.
But some experts said the measure may not go far enough to tide jobless workers over until vaccines are widely available, which is likely to occur in mid-2021.
“This short duration, and limited aid, means that the stimulus bill won’t give jobless workers a cushion until a point closer to when the vaccine can roll out and people can go back to their shuttered occupations,” said Andrew Stettner, an expert on unemployment with the left-leaning Century Foundation, said in an email statement on December 21.
At the end of November, more consumers said they were feeling a financial impact from the COVID-19 crisis, reaching almost 6 in 10 people and representing the second consecutive monthly increase of hardship, according to a survey from TransUnion. Job growth around the U.S. also , raising concerns the economic recovery is losing steam.
“Ticking time bomb”
Some consumers, meanwhile, say they need far more than another one-time payment of $600 to help them survive until the coronavirus vaccine is more widely available next year.
“Our [COVID-19] numbers are bigger than ever and the scale of this pandemic is almost limitless, but the aid is not,” restaurant owner Stephanie Bonin told CBS MoneyWatch before the deal was reached. She has a Change.org petition calling for Congress to provide people with $2,000 a month, which has received nearly 2 million signatures.
She added, “None of it is enough — whether it’s $600, or a one time $1,200 check — none of it is enough to answer the need out there.”
In the meantime, millions of U.S. families are struggling to pay their bills, and layoffs. Among consumers who have been affected by the pandemic, about 8 in 10 are concerned about their ability to pay their bills — with half saying they’re worried about affording their rent or mortgage, according to the TransUnion survey.
Many jobless workers are already struggling after extra jobless benefits were cut from $600 a week to zero in August, the Century Foundation’s Stettner noted.
“The savings of jobless workers have been largely or completely depleted since then, and the limited aid in this package is unlikely to be enough for them to rebuild,” Stettner said. “Congress has given itself little choice but to immediately get to work on the next economic stimulus package as soon as President-elect Biden takes office.”
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