What’s the latest on a second stimulus check?
Here’s what you need to know – and how it can affect you.
Is there a second stimulus check?
Approximately 88 million Americans have received a stimulus check as part of the $2 trillion financial stimulus package known as the CARES Act. Tens of millions of Americans are still waiting to receive their stimulus check over the coming weeks and months. There are already rumors about what the next stimulus check will look like. Will it be a one-time check? Will it be a monthly check? Will there even be another stimulus check? Future stimulus packages come at a time when the Congressional Budget Office projects that the federal budget deficit will be $3.7 trillion and unemployment will average 14% in the second quarter this year. A second stimulus “check” may come in one or more forms, and it may not be limited to an actual check. Here are the latest proposals and what it means for your wallet.
Second Stimulus Check
Both parties in Congress and President Donald Trump have hinted at a potential second stimulus check. An early proposal would have issued two, one-time stimulus checks of $1,000 each. However, the $1,000 stimulus check proposal became the $1,200 check proposal under the CARES Act. If there is a second stimulus check, a one-time stimulus check is more likely than a monthly stimulus check. Two members of Congress, Rep. Tim Ryan (D-OH) and Rep. Ro Khanna (D-CA), introduced the Emergency Money for the People Act, which proposes to give Americans $2,000 a month for at least six months. Despite what you may have heard, there is not a $2,000 a month stimulus check yet. This is only a legislative proposal – and although multiple congressional representatives and Sen. Bernie Sanders (I-VT) support the legislation – it’s not law.
This might not put money directly in your pocket, but Trump and Speaker of the House of Representatives Nancy Pelosi (D-CA) both have indicated their support to upgrade the nation’s infrastructure. This could include roads, bridges, tunnels, waterways and broadband. In addition to immediate job creation, an infrastructure plan could provide long-term stability once the economy reopens and wide-scale travel and transportation resume.
Fiscal Support For States and Local Governments
The economic effects of COVID-19 have impacted the entire country, but many states and cities especially are hurting economically. Public leaders from New York to California and in between have requested more federal funding, including for essential healthcare needs, educational services, transit systems, small business support and other priorities. Senate Majority Leader Mitch McConnell (R-KY) has suggested that some states consider filing for bankruptcy.
Payroll Tax Cuts
Sen. Josh Hawley (R-MO) proposed the Getting America Back To Work Act to limit job losses, which would provide a refundable payroll tax rebate that would cover 80% of employer payroll costs up to median wages for all companies impacted by COVID-19. The payroll tax credit would apply to employees who were laid off and then subsequently rehired by their former employers. This plan could be a potential win-win for both employees (in the form of a higher paycheck) and employers (who can save on payroll taxes). However, if you’re unemployed or retired, you wouldn’t directly benefit.
No Mortgage and Free Rent
Through the Rent and Mortgage Cancellation Act, Rep. Ilhan Omar (D-MN) has proposed nationwide cancellation of residential rents and mortgage payments through the duration of the Coronavirus pandemic. Omar has called for full forgiveness of rent and mortgage payments for your primary residence, no accumulation of debt and no adverse impact to your credit score for a period of one year. Under the proposal, the federal government would bear the cost of all residential mortgage and rental payments.
Student Loan Forgiveness
House and Senate Democrats and presidential candidates made a big push this year for student loan forgiveness. Former Vice President Joe Biden has called for student loan forgiveness as part of his $750 billion student loans plan. Members of Congress called for student loan forgiveness in the House and Senate as well. Given the multiple student loan benefits in the CARES Act – including suspension of federal student loan payments, 0% interest rate on federal student loans, and no federal student loan debt collection – it’s less likely that student loan forgiveness would be included in the next stimulus bill.
There are multiple other stimulus ideas, including, among others, extending unemployment insurance, providing hazard pay to frontline workers and increasing food aid.