Will there be a fourth stimulus check? Biden’s first address to Congress may offer clues for Americans

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Jessica Menton, USA TODAY
Published 1:46 p.m. ET April 28, 2021 | Updated 2:42 p.m. ET April 28, 2021

If your income dropped this past year, you may be eligible for another round of stimulus checks after you file your 2020 taxes.

USA TODAY

Democratic lawmakers in both chambers of Congress are clamoring for a fourth round of stimulus checks to help Americans who are still struggling financially during the coronavirus pandemic.

Such a move could lift more than 7 million people out of poverty, according to a recent analysis from the Urban-Brookings Tax Policy Center, a nonpartisan think tank. 

This comes as President Joe Biden is set to deliver his first address to a joint session of Congress on Wednesday evening, just before he marks his 100th day in office. Americans will be looking to his speech for clues about future Economic Impact Payments. 

Labor market and tax experts, however, don’t anticipate that there will be additional stimulus checks in the next relief package as the economy continues to recover from last year’s coronavirus-induced recession and the job market improves. 

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Even so, roughly two-thirds of Americans say the latest $1,400 check won’t last them three months, according to a recent Bankrate survey.

Democrats are also pushing Biden to extend other stimulus measures, including the duration of unemployment benefits and a child tax credit payment program.

Republicans have cited concerns over the fast-growing budget deficit as they debate more coronavirus-aid spending. Many of them also argued against the inclusion of the weekly $300 unemployment boost in the latest stimulus package passed in March, dubbed the American Rescue Plan, saying that the amount was too large and discouraged Americans from returning to work.

Although job growth is expected to build in the coming months thanks to vaccinations and another round of stimulus via Biden’s “Build Back Better” proposal, economists say that it may take several years for the labor market to heal. So far, the economy has recouped 13.9 million, or 62%, of the 22.4 million jobs lost in the pandemic recession.

“We need to look at the economy as a whole regarding whether there needs to be another round of direct payments,” says Elaine Maag, a principal research associate in the Urban-Brookings Tax Policy Center at the Urban Institute. “Are we recovered? Are people still hurting? There’s some evidence that we’re not out of the woods yet.”

 (Photo: Getty Images)

COVID aid could lift 7M out of poverty

The third round of Economic Impact Payments from Biden’s American Rescue Plan could reduce the number of people in poverty by 11.4 million, the Urban-Brookings Tax Policy Center says in its analysis. 

Another round of payments could lift an additional 6.6 to 7.3 million people out of poverty, depending on whether the payment is restricted to citizens or made available to everyone, the group added.

“There is a question in front of Congress about whether we should do anything else with additional stimulus payments,” Maag says. “The bottom line is that we could further reduce poverty and could provide additional assistance with another round of these broad payments that smaller or more target measures just can’t do.” 

“Are we recovered? Are people still hurting? There’s some evidence that we’re not out of the woods yet.”

Elaine Maag, a principal research associate in the Urban-Brookings Tax Policy Center at the Urban Institute

The third round of $1,400 payments is being distributed by the Internal Revenue Service. So far, 163 million payments have been disbursed since mid-March. 

The first round of payments amounted to $1,200, which were disbursed through the Coronavirus Aid Relief and Economic Security Act last spring. Then came $600 in aid in a December relief measure called the Consolidated Appropriations Act; Finally, millions of people received $1,400 under the American Rescue Plan signed in March by Biden.

A call for recurring stimulus checks

Biden’s “Build Back Better” proposal includes last month’s American Rescue Plan, along with the upcoming American Jobs Plan and the American Families Plan. Combined, the American Jobs and American Families Plan would cost about $4 trillion.

The $2 trillion American Jobs Plan aims to rebuild the nation’s aging infrastructure, support electric vehicles and clean energy and boost access to caregivers and their pay.

The American Families Plan, which would come in around $1.8 trillion, is expected to include investments in child care, paid family leave and education, paid for by a combination of tax increases on high-income earners.

Some lawmakers have urged Biden to include more stimulus payments in the first part of his package via the infrastructure spending bill. In late March, a group of Democratic senators pushed for recurring stimulus checks and an automatic extension to unemployment benefits as provisions in the package.

“We urge you to include recurring direct payments and automatic unemployment insurance extensions tied to economic conditions in your ‘Build Back Better’ long-term economic plan,” 21 senators wrote in a letter to Biden. 

“This crisis is far from over, and families deserve certainty that they can put food on the table and keep a roof over their heads,” they added.

The effort was led by Sen. Ron Wyden, D-Ore., who chairs the Senate Finance Committee.

It also included Senate Budget Committee Chair Bernie Sanders, I-VT, along with Senators Elizabeth Warren, D-MA, and Cory Booker, D-NJ.

The Senators didn’t include a dollar amount on the recurring stimulus checks.

Child Tax Credit expansion

House Democrats are pushing for the White House to make permanent a child tax credit program that would provide $250 or $300 monthly checks to low- and moderate-income families, depending on the child’s age.

The child tax credit was raised to $3,600 per child under age 6 and $3,000 for children between 6 and 17. Previously, the amount was $2,000 and families with little or no tax obligations weren’t eligible for the program.

The White House announced Wednesday that the Biden administration would seek to extend the measure through 2025.

The American Rescue Plan focused additional resources on children by boosting the child tax credit, with the largest increases going to the lowest-income families with children. It reduced poverty more for children than any other age group, cutting it by more than half from 13.7% to 6.5%, according to the Urban-Brookings Tax Policy Center. 

Unemployment provisions

Democrats have urged Biden to propose a permanent expansion of jobless benefits. In March, Congress had extended a weekly $300 supplement until early September.

In a letter to the White House in April, nearly 40 Democrats said Biden should propose boosting the amount of unemployment payments, extending the duration of the weekly benefit, expanding the pool of eligible workers and implementing a system that would more closely tie the payments to economic conditions, according to The Wall Street Journal. 

The American Rescue Plan extended two temporary federal programs until Sept. 6: the Pandemic Unemployment Assistance program, which provides aid to self-employed, temporary workers and gig workers; and the Pandemic Emergency Unemployment Compensation program, which provides an additional 13 weeks of benefits beyond the typical 26 weeks that states provide to jobless workers.

Instead of another round of broad checks, lawmakers should focus on extending unemployment benefits and the child tax credit because they could provide “longer-run fixes” for American households, according to Heidi Shierholz, an economist at the liberal Economic Policy Institute.

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