It’s no secret that this years’ most sought after stocking stuffer is cash! As seen with the first stimulus checks, Americans spent in record numbers. Many say they’ll spend again this holiday season if the government provides a second round of $1,200 COVID-19 relief payments. Better known as, “stimulus checks.
Earlier this week, over 100 economists wrote an open letter calling for more direct payments to help families cope with the pandemic. But the question remains, “can Washington come to an agreement on this in time for Christmas?
Congressional leaders, all say they’d like to see a new aid bill come together quickly. But as usual, the parties are far from settling on the terms of such a bill.
“Congress must now do a Covid Relief Bill,” Trump tweeted earlier this month. “Needs Democrats support. Make it big and focused. Get it done!”
Follow the Money
A recent Franklin Templeton-Gallup survey found 16% of Americans plan to spend more on holiday gifts this year — but that jumps to 22% if the government comes through with more $1,200 relief payments.
Meanwhile, 37% are planning to spend less this holiday season, but that drops to 30% if consumers receive second stimulus checks.
Treasury Secretary Steve Mnuchin recently said that Republicans want to sit down soon with members of the opposing party to draft a bill “for the people that really need it.” Mnuchin negotiated nearly nonstop with House Speaker Nancy Pelosi before the election, but they couldn’t reach a deal.
The White House’s previous proposals called for more stimulus checks. Aid measures supported by Democrats also have included additional direct payments to Americans.
The scores of economists who signed Monday’s letter say stimulus checks “are one of the quickest, most equitable and most effective ways to get families and the economy back on track.”
Timing for a 2nd Check
It was back in May when the IRS started distributing stimulus checks for Americans. A survey from the U.S. Bureau of Labor Statistics found that nearly 60% of Americans used their first stimulus checks to pay for basic expenses like groceries and utilities.
Others invested the cash or found other, unspecified use for the cash. Those may have included buying affordable life insurance; sales of life insurance policies have surged this year in the shadow of the pandemic.
Republicans and Democrats have disagreed on many issues regarding the next aid package. The primary disagreement is size. Democrats believe the government should spend at least $2.2 trillion, while Republicans favor one far lower at around $500 billion.
The president-elect is pushing for a quick deal to keep the pandemic recession from worsening, though he has said Republicans may be more willing to compromise after Jan. 20, 2021.
If an agreement can come through quickly after Congress’ Thanksgiving break — and if it includes new direct payments — Americans could begin receiving money by late December, and just in time for Christmas. This is based on how fast the cash started flowing the first time.
Should negotiations fail again, a deal might have to wait for the new Congress and the new administration in January. And that means, no stimulus checks before February – perhaps making for a sweeter Valentine’s day? Stay tuned.