Stimulus Update: As Living Costs Rise, Americans Struggle in the Absence of Aid
- Rampant inflation and soaring gas prices are squeezing cash-strapped consumers.
- Many people are still holding out hope for more stimulus aid.
It's getting harder and harder to keep up without a financial lifeline.
For many months now, consumers have been grappling with sky-high living costs as a result of rampant inflation. And new data shows that higher prices may be here to stay for a while.
In February, the Consumer Price Index, which measures fluctuations in the cost of consumer goods, rose 7.9% on an annual basis. That represents the index's largest annual jump in over 40 years. And not shockingly, higher grocery, shelter, and gas costs were all contributing factors to February's higher number.
And speaking of gas costs, tensions overseas aren't helping matters in that regard. Earlier this week, the average cost of a gallon of gas reached $4.17, marking a $0.50 increase from the week prior. And now, experts warn that gas prices could get as high as $4.50 a gallon by May.
All of this has a lot of consumers wondering whether lawmakers will step up and make some type of aid available to those who are struggling. Last year, Americans were privy to a generous stimulus check and monthly Child Tax Credit payments. But should we expect to see similar aid come down the pike in 2022?
Consumers may need to brace for tough times
When the American Rescue Plan was signed into law in March of 2021, the U.S. economy was still in pretty dire shape and unemployment was still rampant. A year later, the general economic picture is looking much more positive, despite soaring inflation. Unemployment is down, jobs are up, and wages have been growing -- albeit at a slower rate than inflation.
All told, based on current economic conditions, it's hard to make a case for another broad round of stimulus checks. And so that's not something Americans should anticipate.
On the other hand, lawmakers are still invested in extending the boosted Child Tax Credit for 2022. Last year, the maximum value of the credit rose from $2,000 in 2020 to $3,000 for children aged 6 to 17, and $3,600 for children under age 6.
Just as importantly, half of the Child Tax Credit was paid in monthly installments that hit bank accounts between July and December. This year, those monthly payments have been off the table thus far. But a revival of those payments isn't something Americans should rush to write off.
Lawmakers need to find a way to compromise on the boosted credit to convince naysayers to get on board with it. That could mean introducing stricter income limits for eligibility or introducing a work requirement -- something that didn't dictate eligibility in 2021.
Taking these steps might whittle down the number of people who are eligible for the boosted credit. But it might also serve the important purpose of putting extra money into the hands of Americans at a time when they need it the most.
The Build Back Better plan, which included legislation in support of a boosted Child Tax Credit for 2022, is pretty much dead in the water. But lawmakers can still seek to negotiate individual components of Biden's massive spending bill, including the credit, in an effort to make that financial lifeline available.
There's a good chance rampant inflation will be with us for quite some time. And while it's difficult to make the case for another round of stimulus checks, it's not as difficult to argue that parents of children should continue to receive the support they were privy to last year.
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