Will There Be A Second Stimulus Check?

Remember the second stimulus check?
It might never happen.

This is the one subject that has Americans glued to the news:

  • subreddit dedicated to discussions about stimulus checks has over 25,000 members.
  • And a Google search of “Second Stimulus Check” returns 190 million results.

The “skinny” deal’s total package of $650 billion was a noticeable mark down from the $1 trillion HEALS Act Republicans proposed in July and about a fifth of the $3.4 trillion HEROES Act the House of Representatives passed on May 15.

Both the Heroes Act passed by House Democrats and the HEALS Act introduced by Senate Republicans include a $1,200 Economic Impact Payment (EIP). President Trump favours stimulus payments.

The IRS could send payments quickly. When and if another stimulus check happens, Treasury Secretary Steven Mnuchin has said it would take about a week to orchestrate the first payments. “I can get out 50 million payments really quickly. A lot of it into people’s direct accounts,” he said.

There were no second stimulus checks in August. There’s still chance they will go out in September (or what is left of it). Maybe a bill will be passed in September, with checks issued in October

One reasonable fact still remains: if a second stimulus package isn’t passed in September, with checks issued in October, our next best hope will be 2021.

Since the recent hearing with Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, what is the current talk about stimulus?

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Pandemic Eviction

U.S. Representatives Derek Kilmer (WA-06) and Don Beyer (VA-08), Vice Chair and House leader of Congress’ Joint Economic Committee, introduced the Worker Relief and Security Act. The legislation would automatically continue and provide for additional enhanced emergency unemployment benefits for the duration of the public health emergency and ensuing economic crisis until conditions return closer to pre-crisis levels.

30 million unemployed workers face a drastic cut in income. The gap in unemployment benefits will inflict anguish on millions of American families, many of whom will have extreme difficulty paying for food and housing, and do serious damage to the economy.

The Worker Relief and Security Act would:

  • A worker who exhausts their traditional unemployment compensation benefits (funded by the state) will be able to receive additional unemployment benefits fully financed by the federal government without limit until 26 weeks after the end of extreme social distancing.
  • A worker receiving Pandemic Unemployment Assistance (PUA) benefits for those who do not qualify for traditional UI will also not face limits on the number of weeks they can draw benefits until 26 weeks after the end of the Public Health Emergency.
  • Workers receiving the extra $600 in weekly benefits will continue to receive it until 30 days after the end of the President’s emergency declaration, after which it will begin to phase down over 13 weeks.

“Crushing levels of unemployment are likely to linger even as some businesses start to open, and workers who lose their jobs need unemployment benefits until the job market gets close to pre-crisis levels. Extending unemployment benefits will bolster the economy and protect millions of households from financial ruin and serious hardship,” said former Secretary of the Treasury Jack Lew

“If we are committed to doing whatever it takes to ensure the economic dignity and security of our workers and families during this nearly unprecedented crisis, the single most important policy may be an extension of a robust unemployment benefit that is tied not to an arbitrary date, but to when our job market and public health response is strong enough to let tens of millions safely return to work. Ensuring that all workers who are jobless, or facing reduced hours due to the crisis, have a benefit that helps them pay their bills, stay in their homes, and support themselves and their families must be our first priority both in terms of our values and economic common sense” stated National Economic Advisor to President Obama and President Clinton, Gene Sperling

“Rather than pretending we know exactly what will happen in our economic future, the legislation smartly makes support and assistance contingent on what actually happens. This approach is long overdue” Jason Furman, Chair of President Obama’s Council of Economic Advisers said: “Expanded and extended unemployment insurance is the most important economic response to the crisis we are in today. It is critical that it continue as long as it is needed”

“With the economy in crisis, it is absolutely crucial that we build a better safety net for marginalized and low-income households. The Worker Relief and Security Act provides strongly-targeted support for the millions of families that have been impacted by COVID-19 and, most importantly, requires that support to continue until the economy recovers” Senior Advisor at Employ America Arnab Datta

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Standalone Unemployment Assistance Enough?

How far can these checks go for those out of a job?

More than 1 million Texans have applied for unemployment. Amber Bradshaw is among them.

She and the team she manages at a furniture store were furloughed late April. She expects to get $521 per week on unemployment, plus $600 per week in federal pandemic benefits.

Enough to cover her bills? “For me it is, and for my staff it will be also,” Bradshaw said.

Benefits vary widely, says Michele Evermore at the National Employment Law Project. “You see anything from $213 on average in Mississippi, to $555 in Massachusetts,” Evermore said.

The average nationwide is $370. Add that to the pandemic benefits and it totals $970, about the same as the average weekly pay of Americans nationwide.

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Trump’s Eviction Executive Order

President Donald Trump signed an executive order on Aug 8 that addressed eviction policy.

An eviction moratorium for properties linked to federal housing financing was included in the CARES Act, a major coronavirus relief bill. The moratorium expired in late July.

Trump’s executive order doesn’t extend the moratorium. Instead, it takes a softer approach by telling executive branch officials to think about possible solutions to evictions during the coronavirus pandemic and its related economic downturn.

As of Aug. 24, tens of millions of renters who were protected from eviction are no longer shielded against losing their homes for being late on rent payments.

Making matters worse, the weekly federal unemployment bonus of up to $400 that President Donald Trump ordered in August hasn’t yet kicked in, leaving nearly half of all US renters at risk of eviction in the coming months, according to an analysis by Statista.

Without new or renewed protections or financial safeguards like expanded unemployment or a second round of stimulus checks, as many as 40 million people could be displaced from their homes over the next year, according to the Aspen Institute — all during the worst economic recession since the Great Depression.

The order instructs the U.S. Treasury Department and the Department of Housing and Urban Development (HUD) to identify funds that could potentially be used to help renters and homeowners who can’t make their housing payments because of the coronavirus.

In the meantime, renters can still be evicted and homeowners may still lose their homes. Over 30% of U.S. households had outstanding housing payments at the beginning of August, a recent survey from rental website Apartment List found.

Congress has allowed many of the financial provisions from the CARES Act to expire, including the federal eviction moratorium, as it struggles to reach a new deal.

Over 30 million people are out of work and about 19 to 23 million renters are at risk of eviction by October, according to the Covid-19 Eviction Defense Project, a coalition of economic researchers and legal experts.

When President Donald Trump signed an executive order on August 8 to shield tenants from the threat of eviction, he said it would “solve that problem largely, hopefully completely.”

It won’t work

Not only this action would fail to halt evictions, it wouldn’t do much of anything to immediately help the 20 million or so Americans who face the loss of their homes in the next few months amid the coronavirus crisis

“It’s nothing but a political ploy,” said House Financial Services Chair Maxine Waters (D-Calif.), who dismissed the “so-called executive order” as a stunt designed to deflect criticism from the president. “It means nothing.”

The order will “mislead renters into believing that they are protected when they are not,” National Low Income Housing Coalition President and CEO Diane Yentel said in a statement. “This executive order is reckless and harmful, offering false hope and risking increased confusion and chaos at a time when renters need assurance that they will not be kicked out of their homes during a pandemic,” she added.

Negotiations to renew both measures as part of the next relief package have broken down. The expiration of those benefits means somewhere between 19 million and 23 million people — about one in five renters in the U.S. — will be at risk of eviction by the end of next month, according to an analysis by the Aspen Institute.

Trump, questioned at his Tuesday 11th August press conference about the prospect of mass evictions, said, “We are not allowing that to happen.” “We are stopping evictions,” he added, referring to the executive order.

The House has passed two bills that would provide $100 billion to help tenants pay their rent, but the Senate has not moved on either piece of legislation.

$300 Enhanced Weekly Unemployment Benefits

According to a new memo from FEMA (Federal Emergency Management Agency), the $300 enhanced weekly unemployment benefits will not be available until late August. Unemployed Americans have been waiting for supplemental weekly unemployment benefits since the $600 a week enhanced unemployment benefits expired in late July.

When will unemployment benefits start?
There is not a universal date that supplemental unemployment benefits will begin in your state. According to that FEMA memo, the U.S. Labor Department estimates an average of three weeks from August 8, 2020, which implies an average start date of August 29, 2020. For reference, Trump signed the presidential memorandum on unemployment benefits on August 8, 2020

First come, first served?
While these weekly unemployment benefits, will be federal benefits, each state must apply for a grant to receive the funding. FEMA says that “approved grant applicants will receive an initial obligation of three weeks of needed funding.” After this period, additional disbursements will be made on a weekly basis.

How long will these benefits last?
These unemployment benefits are limited. These federal unemployment benefits will be available until the earlier of:

  • FEMA spends $44 billion from the Disaster Relief Fund (DRF); or
  • The total unobligated balance of the DRF decreases to $25 billion; or
  • Congress passes legislation for supplemental federal unemployment benefits, or December 27, 2020.

Am I eligible to receive these benefits?
To qualify, you must be eligible to receive at least $100 of weekly unemployment benefits from August 1, 2020, from an existing unemployment program such as state unemployment or other pandemic unemployment compensation programs.

Are these unemployment benefits the only available?
No. You can still collect traditional unemployment benefits through the state where you last worked.

Will the second stimulus check include unemployment benefits?
Congress has yet to reach second a stimulus deal and is not expected to consider the next stimulus bill until at least September when members officially return from summer recess.

Some will be left out.
Largely low-wage and part-time workers — the ones who most need the extra help, experts said. It also appears some self-employed, gig and other workers may not get the relief in some states like Alaska.

Employer Assistance Coordination Act

Lets go over the details:

  • A bill to improve coordination between the Paycheck Protection Program (PPP) and Employee Retention Tax Credit.
  • Under the Employer Assistance Coordination Act, an eligible small employer that received PPP assistance could use that funding to cover 8 weeks of payroll and other expenses.
  • After exhausting their PPP assistance, hardest-hit employers could claim the 50-percent ERTC for the first $10,000 in wages and health plan costs for each employee.
  • This bill is sponsored by Sen. Margaret “Maggie” Hassan, the junior senator from New Hampshire. Democrat.
  • It was introduced on July 22nd 2020.

This Act may be cited as the Employer Assistance Coordination Act and it is supported by:
• U.S. Chamber of Commerce
• National Federation of Independent Businesses

Not Yet Introduced

Senate Republicans are pushing to vote next week on a revised coronavirus relief bill.

A pared-down coronavirus relief package has not been introduced yet by the Senate, but Senate Republican Conference Chairman John Barrasso (R-Wyo.) says it’s coming next week.

“We have a focused, targeted solution that we hope that the House would pass and the House would agree to,” Barrasso told PBS NewsHour early Tuesday morning. The bill will reportedly include aid for schools and unemployed workers.

The bill can’t be voted on until the Senate Republican conference approves the vote. Barrasso said the conference will have a call with the White House Tuesday morning to discuss details of the bill and potential vote.

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Flashback: American Workers, Families, and Employers Assistance Act

July 20: Senate Finance Committee Chairman Chuck Grassley (R-IA) officially proposed the next stimulus bill, the American Workers, Families, and Employers Assistance Act, which includes a $1,200 stimulus check for individuals who earn up to $75,000.

Sounds familiar?

It’s because this is the same limit as the stimulus checks provided under the original CARES Act, passed in March that provided a $600 weekly federal unemployment benefit in addition to state unemployment benefits.

This new bill is broken into five titles that cover a wide range of emergency relief acts, including:

  • Expanded Federal Unemployment Benefits
  • Stimulus Checks & Job Creation
  • Healthcare Related Provisions
  • Additional Flexibility And Accountability For Coronavirus Relief Fund Payments And State Tax Certainty For Employees And Employers
  • and more

This new proposal will replace the federal unemployment benefit with a lower weekly rate.

  • Recipients would receive $600 per week ending on or before July 31, 2020
  • Then they would receive $200 per week through October 5th,
  • Starting in October, this payment would be replaced with a payment (up to $500) that, when combined with the state UI payment, would replace 70 percent of lost wages through December 31, 2020.

Some related bills:
S.3638 Coronavirus Relief Fund Flexibility Act
This bill allows Coronavirus Relief Fund payments to be used to replace state, tribal, or local government revenue shortfalls resulting from COVID-19 (i.e., coronavirus disease 2019) during the period from March 1-December 31, 2020.

H.R.7615 To provide a payroll tax credit for certain expenses associated with protecting employees from COVID-19. This bill allows employers a payroll tax credit for 50% of the sum of qualified employee protection expenses, qualified workplace reconfiguration expenses, and qualified workplace technology expenses paid for each calendar quarter.