4 Reasons a Stimulus Deal Could Come in August, and 4 Reasons It Might Not

Author: Maurie Backman | August 05, 2020

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Is resolution days away? Or months?

Millions of Americans are struggling as the COVID-19 outbreak continues to pose a threat and the nation grapples with a recession. As such, lawmakers have been trying to work out a second relief package to follow late March's CARES Act. In fact, last week Republicans introduced the HEALS Act -- their attempt at a new stimulus deal. But so far it's yet to be passed.

All of this therefore begs the question: Will we get resolution on a second stimulus package in August? Or will we all need to sit tight and wait much longer? Here are four reasons why an answer could come in August, and four reasons why that may not happen.

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1. We need to pump money into the economy now

Though it's clear that our economy is in bad shape, last week it was revealed that U.S. gross domestic product (GDP) -- which is considered the broadest measure of economic activity -- declined at an annual rate of 32.9% in 2020's second quarter. That's more than drastic; it represents our economy's worst drop ever. As such, it's clear that Americans need a relief package that will enable them to pump more money into the economy as quickly as possible.

ALSO READ: This Is the Biggest Hurdle to a Second Stimulus Check

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COVID test being administered at a drive-up facility.

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2. The COVID-19 outbreak has worsened

When the COVID-19 outbreak exploded in March and April, the hope was that warm weather would help the situation improve. But clearly that didn't happen. Rather, the outbreak intensified over the summer, with record numbers of cases reported in July. With the situation being as dire as it is, many states have been forced to halt or even roll back their reopening plans, which makes an immediate relief deal all the more important.

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Blank unemployment claim form.

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3. Boosted unemployment has already run out

The CARES Act allowed workers on unemployment to collect a $600 weekly boost on top of their regular benefit. That boost allowed many jobless Americans to replace their lost wages in full and keep up with their bills. But that $600 boost expired on July 31, and if lawmakers don't act quickly on a second relief package, those who are out of work are apt to land in a very dire financial situation.

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4. Small businesses are still struggling

The COVID-19 pandemic has already forced more than 100,000 small businesses to close permanently, and many of those companies that haven't yet shut down have been kept afloat by Paycheck Protection Program loans. But for many businesses those loans have already run out, and so lawmakers need to act quickly to prevent more widespread closures.

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1. Lawmakers can't come to an agreement

Though it's clear that Americans need immediate relief in light of the pandemic and recession, lawmakers are still duking out the terms of a second relief package, and so far they haven't made a lot of progress. It seems as though the greatest sticking point is boosted unemployment. Republican lawmakers have proposed replacing the $600 weekly boost with a $200 boost, but Democratic lawmakers insist that the $600 needs to be upheld to avoid widespread economic disaster.

ALSO READ: 7 Things to Know About the Senate Stimulus Proposal

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Woman grocery shopping in a surgical mask.

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2. COVID-19 cases are starting to plateau

Though things are still looking dire as far as the COVID-19 outbreak goes, cases have started to plateau in a number of states. Lawmakers may see this as a sign that they can take their time hammering out a relief package.

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Relief check being held in front of U.S. flag.

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3. Americans have already waited months for a stimulus check

Many Americans received their stimulus money under the CARES Act back in April, and at this point have been waiting over three months for a second payment. Lawmakers might argue that at this point, it almost doesn't matter whether the public gets a second round of checks in August versus later on in the year. Either way, that money will play a pivotal role in stimulating the economy, and they may not be motivated to send it out right away.

ALSO READ: Here's How to Calculate Your Next Stimulus Payout

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Empty desk with microphone.

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4. The Senate will recess again after August 7

Perhaps the biggest possible reason we won't see a second stimulus deal in August is that the Senate is scheduled to recess after August 7, and it's not due back in session until September 8. As such, lawmakers really don't have a lot of time left to work out a relief package, which means there's a good chance Americans will have no choice but to hang tight until September, or possibly even beyond.

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