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The Unemployment
Four reasons why a second stimulus check is still possible

Four reasons why a second stimulus check is still possible

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It seems that the proposals for direct payments are finished, but not completely; these data prove it.

With Republican stimulus legislation buried in the Senate Thursday, the chances of a new economic package being considered in Congress before the November elections are minimal, according to experts.

The Republican proposal was dropped by the Democrats, among other things, because it did not provide funds for a second round of checks and neither did it provide funds for the states.

However, despite the delays, the multiple measures on the table and the bumpy negotiation process, there are at least four reasons why new payments to individuals and families still make sense.

Limited unemployment assistance

The main one is that although the unemployment rate has dropped, the labor market is far from stabilizing.

The latest Department of Labor statistics released this week show that as of September 5, 884,000 people applied for unemployment insurance for the first time, the same number as the previous week. This is not counting the nearly 839,000 applications for special pandemic insurance (PUA) established under the CARES Act.

This very issue could be one that leads legislators to sit down again to discuss a new package.

The reality, at the moment, is that states are just beginning to send the extra $300 a week in aid provided by Donald Trump’s executive order redirecting FEMA funds to these purposes. Millions of unemployed were receiving, under the CARES Act, $600 a week through July. But they have had to wait more than a month to start receiving additional funds that would only last for a few weeks or until the Federal Emergency Management Agency’s funds run out.

While this group continues to struggle to make ends meet and fulfill basic obligations.

Essential expenses

Several surveys have confirmed that most recipients of the stimulus check used the money immediately for basic expenses such as food and rent, among others.

For example, a June Census Bureau survey (Household Pulse Survey) found that 80% of participants indicated that they used the aid to buy food; while 77.9% disbursed the money for rent, mortgage, and other utilities, such as gas, electricity, cable, internet, and phone bills.

The results of another study released this week by the Bureau of Labor Statistics confirm that 59% of Americans used the check to cover daily food expenses and pay bills.

Support from Both Parties

Another variable that supports new stimulus checks is that most Republicans and Democrats support the proposal.

A recent Gallup poll confirmed that seven out of 10 Americans (70%) favor the government sending out new economic impact payments like those that began to be distributed in April under the CARES Act.

If the results are divided between Democrats and Republicans, 82% of the former favor the distribution of more checks; while in the case of the latter, the figure is 64%.

In addition, legislation has been introduced in both the Senate and the House of Representatives that includes new payments; “Heroes Act” for the Democrats and “Heals Act” for the Republicans.

President Donald Trump has also spoken in favor of new checks.

Easier to process

Another point that supports the possibility of a second stimulus check is that in view of the deadlock in Congress – administratively speaking – these payments are easier to process compared to others under programs such as the one established by executive order by the president for unemployment payments.

Checks are processed directly by the Department of the Treasury in coordination with the Internal Revenue Service (IRS) without the intervention of state offices.

Natalie Foster, co-chair of the Economic Security Project, this week highlighted the benefits of the checks compared to other grants.

“Direct checks are the most effective and fastest way to support American families,” she said. “In the past six months, we received a payment of $1,200, which is not enough,” she added.

In addition, the IRS has already identified the flaws in the distribution process that have delayed some payments, so – in the event of a second round – the expectation is that the agencies will process the funds with less inconvenience.

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