With the country in a recession and unemployment rates still above 10%, millions of Americans are struggling financially and looking to Washington, D.C., for assistance. Unfortunately, they won't get it anytime soon.
Although lawmakers from both sides of the aisle have indicated they are in favor of a second coronavirus-related stimulus payment, months of negotiation have yet to lead to compromise legislation that will gain majority support.
Unfortunately, while it seemed all but certain that lawmakers would pass another coronavirus relief bill before July 31 (when expanded unemployment benefits ran out for millions of Americans), that deadline has come and gone. Now those hoping for more COVID-19 money will probably have to wait until mid-September at the earliest -- and there's a good chance no funds will ever come.
Here's why.
Image source: Getty Images.
The Senate's schedule is a major obstacle
Before Americans will see a second stimulus check, lawmakers have to come to an agreement on a coronavirus relief bill, and it would need to pass the House and Senate, then be signed into law by President Donald Trump.
Unfortunately, the Senate went into recess for the month of August and is not expected to return until Sept. 8. Although there is a chance that lawmakers could be called back early if an agreement can be reached, negotiations weren't fruitful even when everyone was in D.C. together. Now, they'd have to come to a deal while spread across the country, be confident enough in its passage that coming back to D.C. early would be worth it, and get bipartisan support for resuming legislative business ahead of schedule.
All of that is unlikely -- and even if they somehow managed to accomplish it, it would still take time for the IRS to process the payments and send out the money. While the agency would likely be able to act faster this time around because the mechanisms are in place to send payments, mid-September is likely the earliest timeframe when more COVID-19-related financial relief could start coming.
And with lawmakers now considering a "skinny" relief bill that doesn't include a second COVID-19 payment, it seems they've mostly given up on the idea of agreeing on a big compromise solution that would get more money into most people's pockets.
Since more stimulus money may not be coming, here's what you should do now
Sadly, even when lawmakers return from recess, it's far from guaranteed they'll provide a second direct payment even as Americans struggle to cope with a coronavirus-driven recession.
There's disagreement on key points, including expanded unemployment benefits and aid to states, and these issues won't be easy to resolve. There are also just over two months until the general election, which means there are plenty of other priorities for those in the House and Senate.
Since there's a really good chance you won't see any more government aid, you'll need to get serious about managing the 2020 recession without further federal help. This could mean:
- Exploring all benefits available to you: Unemployment benefits, Supplemental Nutrition Assistance Program (SNAP) benefits, Medicaid, and other sources of state and federal aid should still be accessible to those who have been left without a job and with limited household income.
- Making budget cuts: Whether you're currently employed or not, living on a smaller budget is smart during a recession. Reducing your spending will allow you to shore up your emergency fund or free up cash for investing. It can also make it easier to live on unemployment if you lose your job.
- Reviewing your asset allocation and investment strategy: Another market crash is possible due to spiking coronavirus cases. You want to make sure you aren't overexposed to volatile stocks and that you're confident in your holdings, so you won't panic sell and lock in losses during a market correction.
By taking the necessary steps to stabilize your own financial situation -- even without stimulus money -- you can ensure that the coronavirus doesn't have a devastating long-term impact on your financial future.
