I hope you have not planned to spend the proposed second round of incentive payments. As each week passes in this long summer, the chances of receiving those payments become increasingly questionable.
As a frequent writer on this particular subject, I must admit to being as confused on this issue as anyone else. Back on July 10, I wrote in this space that Congress had no choice but to pass another stimulus bill. The CARS Act – which included a $ 600 per week federal unemployment subsidy, plus the original round of personal incentive payments of $ 1,200 – was scheduled to expire on July 31. Meanwhile, Election Day (3 November) was not a far-off, over-the-horizon event.
With the HEROES Act passed by the Democratic House already sitting in the Senate for nearly two months, the passage of a new – if stripped down – version of that bill seemed certain by the end of the month. It seemed that this was political suicide.
But I was wrong – or at least I’ve been so far. July 31 has come and gone, and no new act is moving ahead of Congress, either related to the second round of incentive payments or the expansion of federal unemployment benefits.
The missed call is upon me, as well as other writers, political analysts and mixed astrologers, who inevitably see the passage of the second bill. But Stimulus Round Two is completely on Congress from here.
At this point at least, this result is now so uncertain that it is time to ponder the possibility that it may not occur at all.
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Reasons for passing another Stimulus bill are as strong as ever
This is where the plot thickens. None of the conditions removing the first stimulus package or the second round generated interaction have disappeared.
Despite a steady improvement in the number of new claims for unemployment since the peak in April, the job market began to cool in July. In the most recent figures released for the week ending August 15, the number of new claims of unemployment rose unexpectedly to 1.1 million, from 963,000 the previous week. Clearly the unemployment situation is in crisis.
The current level of new claims is an average of over 250,000 four times per week before the epidemic closes. And the number of people dependent on government benefits related to unemployment continues to grow.
“28 million,” reports Forbes staff writer, Sarah Hansen. According to the Labor Department, “how many people are receiving some form of government unemployment benefit. This number is unchanged from two weeks ago.”
Despite statistical evidence of an improvement in the unemployment situation since the peak of the epidemic, it is clear that we are not out of the woods yet – or even close.
With the still lingering effects of the Kovid-19 economic collapse, many millions of American families are facing the threat of foreclosure or eviction.
While it is true that millions of American households are prohibited from holding their hostages, it is not necessarily a free card out of prison. Payments not made during the forbearance are added to the principal balance of a mortgage. This means that homeowners will have more arrears on mortgage after mortgage than before. This not only ends the day of raking, but it also works to reduce the equity of the house.
Many homes have been celebrating since the crisis began in March. And as Kovid-19 cases continue to increase in many Sunbelt states, the situation is increasingly complex. Forbearance has not cured the Kovid-19 housing crisis, but mostly replaced it at a future date.
But the situation is even more clear for tenants.
“Although White House economic adviser Larry Kudlow hinted at an extension, the expiration of the provision allowed landlords to issue eviction notices, although they did not expel people from their homes for at least 30 days. “Forbes wrote in late July, contributor Niall McCarthy. “Combined with cuts in unemployment payments, this is likely to create the perfect storm for US rentals. An analysis by global advisory firm Stout Rius Ross estimates that more than 40% of rented homes in the US are going to experience rent shortages during the Kovid-19 crisis, evicting just over 12 million in the next four months. Is facing About 17 million are likely to be affected during the epidemic. “
A crisis among renters can trigger a domino effect. Even though the White House succeeds in extending sanctions against tenants filing eviction notices, small landowners will be at increased risk of losing those properties to foreclosure or simply due to ongoing financial losses.
Kovid-19 cases are spreading rapidly in some states
Since Kovid-19 is the source of the current economic crisis, it continues to spread a clear concern for economic recovery.
Thus far, the virus has proved to be both unpredictable and inconsistent. Overall the number of new infections has decreased in recent weeks, but the pattern is uneven. According to CDC data, large sunbelt states, particularly California, Texas and Florida, are witnessing a large number of new infections. Meanwhile, other states, where the virus was implicated, are now seeing at least moderate growth in new cases. This includes New York, New Jersey, and Massachusetts, the former epic of Kovid-19 in the US.
It is reasonable to conclude that by the time Kovid-19 completely retracts, the US economy remains weak. Congress may not be able to ward off the virus but increases unemployment benefits and issuing new incentive payments will at least reduce the economic impact.
Half measure in Presidential Executive Order
To its credit, the Trump White House stepped in when the Senate failed to take action on expanding the provisions of the CARS Act. The president signed an executive order on August 8, increasing federal unemployment benefits to $ 400 per week. But on closer analysis, it is not as generous as the promised benefit.
“Last week, after failing to secure an incentive deal, President Donald Trump issued an executive order that provided $ 400 a week in supplemental unemployment benefits,” reported Zach Freedman, a Forbes contributor. “However, the $ 400 benefit was contingent on states financing 25%, or $ 100. Later, the US Labor Department stated that states could apply their current state unemployment benefit to a 25% share, which effectively Reduced the weekly unemployment benefit to $ 300 instead of $ 400. To date, no state government has agreed to supplement the $ 100. “
translation: The federal unemployment expansion is just $ 300, and only begins to take effect by August 29. This means that not only did previous benefit recipients see their weekly checks cut in half, but they stayed with no federal benefits for several weeks.
And the very promising $ 1,200 incentive payment? They are not part of the executive order of the President. No Senate approval, no incentive check for such incentive payment scheme!
Is it time to fulfill the expectation of another round of Stimulus payments?
The most immediate concern is that the US Senate has postponed the August holiday. They are not scheduled to return until September 8 after Labor Day. This means that not only has the 31st of July arrived and gone without passing the new Incentive Act, but apparently it will happen on 31 August.
In combination with the upcoming November elections, there seems to be little incentive in the Senate to act on a new stimulus package, or at least to do it quickly – despite economic pressures by millions of Americans.
One theory is that members of the Senate will return with more motivation after recess than before. But it is equally possible that we will see an impasse on issues that have been tying the new bill in that chamber since May.
It is now possible that weeks may turn into months, with a new stimulus package passed, with checks issued before Election Day.
or not. After all, the Senate has surprised many by failing to act at this point.
None of this explicitly declares that the second round of incentive payments or federal unemployment benefits will not extend. But it is to highlight that indecision has pulled back for the most time in July, as the car act ended and went away.
The point is, planning for the receipt of a second stimulus check is premature.
At this point, no incentive check will be issued in August. There is a slight chance that they will go out in September. More likely, a bill will be passed sometime in September, checks will be issued in October. Whether the time immediately before the election – willful or accidental – will be the subject of future debate.
One fact seems fairly certain: If the second stimulus package was not passed and the check was issued in October, the next best hope would be 2021.
But when this happens, do not hold your breath.