The pandemic has caused serious financial difficulties for individuals and small businesses alike. The nation-wide lockdowns and social distancing measures led to a huge amount of small business closures, employee layoffs, and furloughs. While the economy is picking up pace again, many are still struggling due to the financial impact that the pandemic has already caused. Here's what you need to know about the potential for a fourth stimulus check and why some lawmakers are pushing for this.
The US Economy Is Improving Thanks to Past Relief Packages
The current unemployment rate is 6.1%, which is still significantly higher than the pre-pandemic rate of 3.5%. Some 16 million Americans are currently receiving jobless assistance in some form or another. At the same time, employers are having great difficulty filling job openings.
To date, qualifying Americans have received a total of $3,200. $1,400 came from the American Rescue Plan in March 2021, $600 in December 2020, and $1,200 in March 2020 as part of the Coronavirus Aid Relief and Economic Security (CARES) Act. There has been discussion of another stimulus bill, but so far nothing concrete.
Some Lawmakers are Pushing for a Fourth — and Fifth — Stimulus Check
As Congress reconvenes after the Memorial Day break, progress towards a fourth stimulus bill may pick up. Nearly 167 million payments, up to $1,400, were processed in the last round of stimulus checks, but many lawmakers are pushing for an additional check. Pressure on the Biden Administration to act will likely continue to rise.
A recent letter signed by seven members of the House Ways and Means Committee, which makes budget recommendations, claim that direct payments and unemployment insurance "are among the most effective forms of relief."
They state that poverty began to rise again once the CARES Act checks ran out and cited that two-thirds of adults stated the third stimulus check was critically important for them. Many spent their check on monthly expenses such as rent, utilities, mortgage payments, and food.
The seven members argued that a fourth and a fifth stimulus check will keep 12 million more people out of poverty, caused by the pandemic. The lawmakers did not propose an amount for future stimulus checks, but they mentioned the last $1,400 check, possibly hinting at that amount again.
Another twenty-one senators, all of whom are Democrats, signed another petition asking the Biden administration to continue unemployment benefits and direct payments to Americans.
Research Shows Stimulus Checks Work — And Are Still Needed
Those in favor of more checks point to the current need. UC Berkeley warned that millions of renters, who owe a collective $20 billion in back rent, could lose their homes as the eviction moratorium is set to expire on June 30th.
A study by the University of Michigan highlights some of the positive impacts of the last two stimulus checks. They found that from December 2020 to April 2021, adverse mental health symptoms fell by 20%, financial instability dropped by 45%, and food insufficiency fell by over 40%.
The study concluded, "reported hardships drops sharply...immediately following both the COVID-19 relief bill passed in late December 2020 and ARPA passed in early March 2021...particularly true for adults with children."
Many Americans have been using the stimulus checks to pay for other items that are not considered essential, but still necessary. Clothing, car repairs, and affordable life insurance fall into this category.
A Majority of Americans Also Support Fourth Stimulus Checks
Progressive lawmakers are not the only ones calling for extra stimulus checks. Right now there is a petition at change.org calling for $1,000 payments for kids and $2,000 payments for adults "immediately and continuing regularly for the duration of the crisis." The petition is currently signed by 2.3 million people.
Those who object to another round (or two) of stimulus checks state that they will not be beneficial to the country and ask, how much will be enough? Payments may help people in the short term, they argue, but it will not stir up the economy, which will end the financial crisis people are in.
Others argue that putting more money into the economy will create high inflation, which will not only dampen the already struggling economy, but disproportionately hurt those who are already suffering financially. It will also lead to a higher national debt which will have serious long term implications.
Others point to the fact that businesses are already having a difficult time finding workers. Flooding the economy with more money and extended unemployment insurance, may incentivize people to stay home, instead of finding a job.
Pete Kyle, the Charles E. Smith Chair Professor of Finance at the University of Maryland’s Robert H. Smith School of Business told CBS News, that overstimulating the economy "poses catastrophic risks."
President Biden has not formally announced one way or the other concerning additional stimulus checks, although it has not been ruled out. Press Secretary Jen Paski said on Thursday, "The President is certainly open to a range of ideas" in response to the idea of a forth check. It seems to leave the option of an additional stimulus on the table.
Americans may soon find out if a fourth check is in their future, or not.