The U.S. economy has been reeling since the COVID-19 outbreak spurred a recession unlike any the country has experienced before. With an unemployment rate of over 10% and ongoing restrictions limiting businesses' ability to open, it's clear that the public is desperate for relief.
And the frustrating part? Democratic and Republican lawmakers are both on board with sending out a follow-up round of stimulus checks to follow the round the CARES Act allowed for, yet there's been zero movement in getting that money out.
In May, Democrats proposed the HEROES Act, which included, among other provisions, a $1,200 stimulus check per eligible adult, plus $1,200 per eligible dependent with a maximum of three dependents per household. Meanwhile, Republicans' HEALS Act, which was introduced in July, calls for $1,200 per adult plus $500 per dependent -- and that includes dependents aged 17 and over who were not eligible for an initial stimulus check under the CARES Act.
All told, Democratic and Republican lawmakers largely see eye to eye when it comes to a second stimulus check. But unfortunately, until they come to terms on a complete relief package, those stimulus payments are effectively stalled. And that puts a lot of households in a very unfortunate financial position.
When will a second stimulus check go out?
Last week, lawmakers convened to hash out a stimulus deal that both Democrats and Republicans could agree on -- and they failed miserably. Specifically, both sides need to find a middle ground to move stimulus discussions forward and get a relief plan signed into law, but they can't seem to come to terms on the cost of that plan. Democrats are looking to spend over $3 trillion with the HEROES Act. Republicans' HEALS Act, by contrast, has just a $1 trillion price tag attached to it ("just" being a relative term, of course).
Then there's the issue of boosted unemployment. Democrats want to see the $600 weekly boost that jobless workers were receiving up until the end of July extended through the end of the year. Republicans, meanwhile, want to boost unemployment by just $200 a week in the near term so that jobless workers are incentivized to return to a paid position once that opportunity arises.
These sticking points are thwarting progress on a second relief deal, and until we have such a deal in place, that follow-up round of stimulus checks can't go out. Clearly, that's not great news, but what is encouraging is the fact that the IRS already has a system in place for sending out stimulus payments quickly, so once lawmakers come to an agreement, eligible recipients may see their money within three weeks.
But seeing as how we're already a third of the way into August with no official deal in sight, hopes of getting that much-needed cash prior to Labor Day are rapidly being dashed. And if negotiations continue to drag on, there's a chance the public won't see any stimulus money before October. That's bad news for the millions of Americans who are struggling to pay their living expenses during the pandemic, and it's bad news for an economy that's desperate for a cash infusion.