Senate Majority Leader Mitch McConnell (R-Ky.) appeared to open the door yesterday to including some direct payments to Americans in a future coronavirus relief bill, The Hill reported. Asked if funding for individuals like the stimulus checks included in a March package would be in the next piece of legislation, which would be the fifth in response to COVID-19, McConnell said they "could well" be. "I think the people that have been hit the hardest are people who make about $40,000 or less. Many of them work in the hospitality industry. .... That could well be a part of it," McConnell said. Congress included a $1,200 one-time payment for individuals making up to $75,000 per year in the $2.2 trillion March coronavirus stimulus package. The amount a person could receive then decreased until it hit a salary ceiling of $99,000 per year, where the direct payment was phased out altogether. The Trump administration has pushed for a second round of the direct payments to be included in the next coronavirus relief package taken up by Congress. House Democrats passed a nearly $3 trillion bill in May that included a $1,200 check for individuals, similar to the March bill, but that legislation is not expected to be taken up by the GOP-controlled Senate. President Trump said late last month that he supports another round of stimulus checks. But GOP lawmakers have been wary, believing that the payments don't directly stimulate the economy and went to individuals who have not been impacted financially by the spread of the coronavirus. Read more.
In related news, direct cash payments can improve financial security, boost consumer spending and may speed up the recovery, according to a letter from a group of economists calling on U.S. policymakers to keep providing direct cash payments to Americans until the economy is stronger, Reuters reported. The stimulus payments should be issued automatically, based on certain economic indicators such as the unemployment rate, until there is enough evidence that the economy is recovering, the group of mostly left-leaning economists said in an open letter organized by the Economic Security Project and The Justice Collaborative. “The first round of economic impact payments were a lifeline that helped some get by for a few weeks,” the economists wrote. “Even after businesses start to re-open and jobs begin to come back, there will be significant economic fallout, and demand will continue to lag if people don’t have money to spend.” The stimulus payments issued in April under the $2.3 trillion CARES Act helped lift spending for lower income households faster than higher income households, with much of the cash going to essentials, according to an analysis by Harvard University’s Opportunity Insights. The $600 supplement Congress added to weekly unemployment benefits are set to expire at the end of the month, leaving jobless Americans at risk of facing a cash cliff while jobs are still scarce. Read more.
