Congressional leaders on Sundayon a $900 billion economic relief package that includes $600 direct payments 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. Dependents will be receiving $600 this time, rather than $500.
A $908 billion bipartisan proposal 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 could include another round of payments of $600 for individuals, according to analysts with investment bank Raymond James.
That’s 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 senators, including Bernie Sanders of Vermont, have insisted that any new relief bill include another round of checks worth $1,200 for low- and middle-income Americans. Sanders, who is joined by Josh Hawley, a Republican senator from Missouri, pledged to force a vote on the proposal before lawmakers adjourn for the year on December 18.
Hawley said on Wednesday that the potential for a round of checks, even at $600 per adult, was a “good movement in the right direction.” But, he added, “I think it needs to be $1,200.”
Negotiations had continued. An eleventh-hour proposal by a Republican lawmaker had stalled negotiations as Friday morning. Senate Majority Whip John Thune highlighted a suggestion by Senator Pat Toomey to wind down the Federal Reserve’s emergency lending programs.
Punting on state and local aid
The current negotiations are based on a $908 billion proposal from a bipartisan coalition of senators. But because that package included $160 billion in aid for struggling, which Republicans objected to, as well as a liability shield for businesses, which 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.
Instead, the first bill would consist of a $748 billion measure, expected to include additional funding for the popular Paycheck Protection Program and unemployment insurance, among other programs.
Holding off on $160 billion in funding for state and local governments may be the key to finding support for another round of stimulus payments, Raymond James said.
“The cost of the CARES Act direct payments was approximately $300 billion; cutting the checks in half would come in at $150 billion,” the analysts wrote. “Swapping the $150 billion in direct payments for the $160 billion in state and local aid would create an overall bill in the $900 billion range that is being reported.”
Emergency jobless benefits could be halved
The $748 billion measure would help millions of jobless workers by adding 16 weeks to the unemployment programs that are now set to expire at the end of December. The Pandemic Unemployment Compensation (PUC), which had provided $600 a week to jobless workers until it expired in July, would be renewed with weekly benefits of $300. The plan would also extend a federal eviction moratorium by an extra month, through the end of January.
“This package is far from perfect — there are major omissions, including a cut in PUC from $600 to $300 and no continuation of paid leave,” said Andrew Stettner, an expert on unemployment with The Century Foundation, a left-leaning think tank. “Nonetheless, the proposal represents a strong down payment of assistance for unemployed workers and the entire economy.”
House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell and other congressional leaders spoke on December 15 to discuss the relief package and a broader government spending bill, with Treasury Secretary Steven Mnuchin calling in, according to Pelosi’s spokesman on Twitter.
“The Speaker and Secretary Mnuchin spoke at Noon by phone for 1 hour, 7 minutes and discussed the latest on COVID and Omni talks. The Secretary will join the Four Corners leadership meeting today at 4 p.m. by phone,” Pelosi spokesman Drew Hammill wrote on Twitter.
Splitting the bill may boost the likelihood of extending jobless benefits before year-end, Heights Securities said in a research note. Analysts said there’s a “nearly categorical 80% that Congress will enact at least a moderate sized ($400-750B) stimulus before the week is over.”
The politically fraught debate over additional stimulus funding is leaving millions of households hanging in the dark about what, if any, aid they might receive over the next few weeks. For many people, the financial picture is dimming as winter approaches and coronavirus cases reach new daily highs.
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 $1,200 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. 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, “Whether PPP, whether the stimulus checks, one by one they have dried up and nothing else has been put in its place.”
December 26 “feels like a ticking time bomb,” Bonin added, referring to the date when unemployment aid is set to expire for. “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.
“Nearly two in five impacted consumers say they really need a future stimulus check and don’t know how they will get by without,” the credit reporting agency found.