Stimulus Update: 4 Reasons Americans May Need More Stimulus Money in 2022
- Lawmakers still haven't found a way forward for the enhanced Child Tax Credit in 2022.
- With the tax credit payments ending, millions of Americans can use the help of another stimulus payment.
- Other issues, like inflation and the recent uptick in COVID-19 cases, have made it even harder for Americans to make ends meet.
Millions of Americans could use the help of another stimulus payment in 2022. Here are four reasons why that is.
Throughout 2021, millions of households were given a significant income boost by the monthly Child Tax Credit checks they received as part of President Joe Biden's American Rescue Plan. As these monthly $300 to $350 max per-child payments landed in bank accounts and mailboxes across the nation, they helped parents stretch budgets a lot further than they otherwise could have. In fact, many of the recipients were able to fill pantries, pay for daycare, and cover other essential bills, due in large part to the tax credit money.
But while these monthly payments were a huge help for low- to moderate-income families, these extra benefits were allowed to expire recently. And, while there was once hope that the enhanced benefit program would be renewed for another year, lawmakers were unable to find a way forward for the tax credit expansion.
That doesn't mean that there isn't a need for more financial help, though. There are plenty of reasons that people across the nation could use an extra boost from more stimulus money. Here are four reasons why Americans may need more stimulus money in 2022.
1. Skyrocketing inflation
Rapid inflation has been causing issues for the U.S. economy since mid-2021, and it has only gotten worse since that time. As of mid-January, the inflation rate had climbed to a whopping 7% -- the highest it had been in 39 years.
What that means for Americans is that everything -- gas, food, shelter, and everything in between -- now costs a lot more than it did just one year ago. Groceries now cost 6.3% more than they did at this time last year -- the biggest grocery price hike since October 2008.
With inflation this rampant, and no signs of it stopping anytime soon, most people's paychecks aren't stretching nearly as far as they once did. Couple that with the rapidly increasing cost of housing in nearly every market, and it's a recipe for disaster for low- to moderate-income households.
In other words, millions of households could use another financial boost from a stimulus payment, if only to help combat some of the quickly rising costs of consumer goods. After all, the last three stimulus checks had a pretty significant impact on households in need, and that was well before rapidly increasing inflation made everything more expensive.
2. Rising unemployment claims
Unemployment rates had been low for the last few months, but that recently changed. As of the week of Jan. 25, newly filed unemployment claims increased by about 55,000 -- jumping to 286,000 from 231,000 the week prior.
That's a pretty significant increase in unemployment claims -- and while it's hard to know for sure if it will continue over time, the reality is that it's at least somewhat likely. The pandemic has had a huge resurgence across the nation as omicron cases have exploded. If that trend continues, it's likely that unemployment rates will tick upward for a while.
If higher rates of unemployment continue, it's likely that a lot more Americans will be strapped for cash. And there are likely to be more people out of work due to isolation and quarantines, too, which will further exacerbate the issue.
Plus, there are no more federal unemployment boosts to fall back on at this point, which could make things even harder for many Americans. As such, another round of stimulus money would come in handy to help those hit hardest by the pandemic.
3. The raging pandemic
Last fall, it appeared, at least on paper, that we may finally be getting the COVID-19 pandemic under control. Numbers were dropping, vaccine rates were rising, and restrictions were starting to loosen. That had a pretty positive impact on the economy.
But that all changed when omicron took hold across the globe. The rapidly spreading strain of COVID has upended what many of us expected 2022 to look like, and there are still tons of unanswered questions about how and where this will all end.
There are also plenty of unanswered questions about how this new surge in cases will affect the economy. We're already seeing empty shelves, supply shortages, and other issues -- all of which feels very familiar at this point. As such, lots of people and businesses could use more financial relief, and that will likely be true for some time in the near future.
4. Monthly Child Tax Credit payments have ended
From July to December 2021, the monthly payments from the enhanced Child Tax Credit had a huge impact on families in need. Millions of children were lifted out of poverty. Food insecurity rates dropped significantly. And parents were able to continue working due to the extra financial boosts they received each month.
But lawmakers allowed those extra benefits to lapse recently -- despite the numerous positive impacts the monthly payments had on millions of households. There is still hope they may find some way forward with the expanded Child Tax Credit for 2022, but until and unless that happens, millions of families could use a financial boost from another stimulus payment from the federal government.
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