As vaccines ramp up and the economy reopens, many individuals and families may be eager to see this side effect of the Covid-19 pandemic continue: government stimulus checks.
A recent poll from Data for Progress found 65% of Americans are in favor of payments of $2,000 per month for the duration of the pandemic.
Some political leaders agree.
On Tuesday, a group of Democratic senators, led by Sen. Ron Wyden, D-Ore., sent a letter to President Joe Biden calling for additional stimulus checks.
“We urge you to include recurring direct payments and automatic unemployment insurance extensions tied to economic conditions in your Build Back Better long-term economic plan,” the leaders wrote.
When tied together, the direct payments can help those who do not qualify for unemployment insurance, and who have suffered a loss in income, the leaders said. The money would also help keep families out of poverty while stimulating the economy.
Americans would welcome the relief, the letter said, citing the Data for Progress poll. It also pointed out than 150 economists have also called for “automatic triggers” for stimulus checks to stabilize the economy.
The U.S. government has issued three direct payments to Americans since the Covid-19 pandemic began. That included up to $1,200 per individual through the CARES Act authorized by Congress one year ago, followed by payments of $600 per person that were approved in December. Now, the government is in the process of sending out $1,400 payments.
Will there be a fourth stimulus check?
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Even as those $1,400 stimulus checks land, talk has begun over whether or not there could be a fourth round of direct payments.
If more checks were authorized, the income criteria to qualify for them would likely be stricter than the first three rounds, where the money also went to people who did not really need it, according to R.A. Farrokhnia, professor at Columbia Business School.
“‘One check fits all’ is perhaps not the best approach,” Farrokhnia said.
There are three things to watch that will help determine whether or not more direct payments will be coming, according to Pete Earle, economist at the American Institute for Economic Research.
That includes how yields on Treasury bonds, which help fund the payments, and interest rates perform; public perception of Biden’s policies; and the 2022 mid-term elections.
On Capitol Hill, other aid will likely take priority, according to Ed Mills, Washington policy analyst at Raymond James.
“I think it’s unlikely at this time” a fourth round of stimulus checks will happen, Mills said.
Biden promised on Monday that 90% of adults will be eligible for vaccination by April 19, paving the way for the U.S. economy to fully reopen.
“D.C. has largely started to pivot towards the recovery and an infrastructure bill,” Mills said.
Yet other forms of coronavirus aid may continue for some families.
That includes a new enhanced child tax credit poised to include monthly payments of up to $300 per child up to age 6, or $250 per child for those ages 6 to 17.
If this social infrastructure piece is implemented, we will see the greatest social programmatic changes in this country in 50 years.
Washington policy analyst at Raymond James
While those monthly payments are expected to begin in July, the IRS recently said it may have to delay that start date.
Once the payments do kick in, it could add between $500 to $600 to monthly budgets for a family of four, Mills said.
The enhanced child tax credit, which will amount to $3,600 total per child under age 6 and $3,000 per child 6 to 17 for married couples with less than $150,000 in income, is currently in place for one year only.
“The fight really is to see if that gets extended beyond this year,” Mills said.
More unemployment insurance aid could also be on the agenda this year, he said. Currently, extra federal unemployment benefits of $300 per week continue until Sept. 6.
Social safety net expansion already underway
Signs calling for more relief, a second Paycheck Protection Program and more as part of a campaign by Goldman Sachs supporting small businesses near the U.S. Capitol on Jan. 5, 2021.
BRENDAN SMIALOWSKI | AFP | Getty Images
Even without more stimulus checks, experts say the money deployed to individuals and families during Covid-19 has amounted to a new experiment with government aid.
“There’s a view out there that these ongoing payments, especially to the extent that now there are whispers about ongoing payments in perpetuity, they sort of represent a stealth implementation of UBI or universal basic income,” Earle said.
Because some people lost jobs or businesses overnight, they are more aware of the potential need for some kind of guaranteed income from the government, according to Earle. Some politicians also agree.
The concept dates from President Franklin D. Roosevelt’s New Deal policy of the 1930s, which included a right to housing, jobs and income, though it did not specifically include UBI, Earle said.
Notably, Social Security was one of the programs established under the New Deal.
A second major expansion of the social safety net came in the 1960’s with the creation of Medicare, and a third wave of change may already be underway, according to Mills.
Its origins started when President Barack Obama signed the Affordable Care Act into law. Now, it could continue with a more permanent expansion of the child tax credit and the federal tools used to help Americans through economic emergencies.
“If this social infrastructure piece is implemented, we will see the greatest social programmatic changes in this country in 50 years,” Mill said.