The covid-19 epidemic is reaching its two-year anniversary, and the United States has passed another somber milestone, with 900,000 deaths. Despite expectations that a fourth stimulus check may be on the way, the federal government has shown little interest in providing more direct payments to American taxpayers.
There has been no evidence of a new package aimed to offer a fourth direct payment after Democrats failed to pass their landmark Build Back Better and “voting rights” legislation. Some lawmakers, on the other hand, have pushed vehemently in support of extending the expanded child tax credit for another year, a proposal rejected by moderate Democratic Senator Joe Manchin.
Alexandria Ocasio-Cortez, a New York congresswoman, sharply chastised Senator Kirsten Sinema, a moderate Democrat, for refusing to vote for Build Back Better. Last week, Ocasio-Cortez called on Senate Majority Leader Chuck Schumer to “make life as miserable as possible” for Sinema. “In fact, he should continue to make their life as unpleasant as possible, treating them like they do, say, inhabitants of public housing.” On Twitter, Ocasio-Cortez remarked, “Or parents who rely on CTC [Child Tax Credit].”
Child Tax Credit deadline is December 31st
The IRS transferred the first of six monthly cash payments into the bank accounts of parents who qualify for the Child Tax Credit in July, providing another type of stimulus relief to certain families (CTC).
According to an examination of Census data by the left-leaning advocacy organization Economic Security Project, families got an average of $423 in their first CTC payment. Eligible families received up to $1,800 in cash from July to December, with the funds distributed in six equal payments throughout the six months. The assistance was provided as part of President Joe Biden’s American Rescue Plan, which includes an enlarged CTC.
Families that met the criteria got $300 per month for each kid under the age of six and $250 for children aged six to seventeen. The additional money would go toward child care, back-to-school materials, and other necessities, according to many families who talked with CBS MoneyWatch. While progressives and some Democrats pressed Congress to keep the increased CTC in place, it looks to be on hold for the time being. This implies that no CTC payments will be made in January or afterward.
Savings and emergency funds
According to recent research from the Federal Reserve Bank of New York, respondents who have received the three rounds of stimulus payments have reported they are utilizing the majority of the cash to pay down debt or put money in savings. This might imply that individuals are utilizing the money to pay off debts accumulated during the epidemic as well as build up an emergency reserve in case of a future disaster. According to analysts, the three waves of stimulus funds saved millions of Americans from suffering.
According to a May review of Census data by the University of Michigan, when the stimulus has failed, such as last autumn when Congress was stuck on another round of help, suffering grew “markedly” in November and December. According to Kelly of JPMorgan Funds, the CTC’s elimination might create further headwinds for families and the economy. “These payments averaged nearly $15 billion each month, according to the IRS, and their abrupt cancellation might restrict previously soaring spending on food and other household staples,” Kelly wrote.
Is a fourth stimulus check likely?
According to Wall Street experts, don’t hold your breath. For one thing, the Biden administration has emphasized infrastructure expenditure as a way to boost economic development, wagering that spending on roads, railways, and other direct investments will help people go back to work and continue the recovery.
Second, analysts have blamed relief initiatives such as the three rounds of stimulus cheques for inflating the economy. Because they had more money in their wallets, Americans increased their spending on items like furniture, vehicles, and technology. According to experts, this, along with the supply-chain bottleneck, resulted in dramatically increased inflation.
According to Brad McMillan, a chief investment officer of Commonwealth Financial Network, without further stimulus initiatives on the horizon, inflation is projected to decline in 2022. In a December report, he remarked that “one driver of inflation has been an expansion of demand fuelled by fiscal stimulus.” “However, that stimulus is now over.” “Yes, we will continue to confront inflation and supply issues,” he said, “but they are decreasing and will continue to do so.”
What’s On The Table, Exactly? For Some, a ‘Fourth Stimulus Check’
In 2022, taxpayers may get economic’ stimulus payments’ in two ways. This year, parents of children born in the calendar year 2021 may be eligible for an extra $1,400 in direct government payment. Parents must earn no more than $75,000 per year to be eligible for the payout. If the combined income of a married couple filing jointly is less than $150,000, they are eligible.
Parents who got monthly child tax credit payments last year could expect a lump sum payment for the remaining six months of child tax credit payments, which will be given through the American Rescue Plan. Parents must submit their 2021 taxes this tax season in order to get the money.
Will California want a $1,100 stimulus package?
Some state lawmakers are pressing for direct payments made out of their budgets now that more stimulus cheques are basically off the table. Following the announcement of a projected $45.7 billion budget surplus in January, one state senator proposed that the excess be used to give each taxpayer $1,125, or $4,500 for a family of four. “If each grain of rice is worth $100,000, California’s $45 billion surplus represents tax revenue that has been under-collected by this amount,” stated State Senator Brian Jones.
Continuing to live paycheck to paycheck
While direct help to families was offered through stimulus checks and the now-expired Child Tax Credit, “most government aid programmes miss the goal, and only reach a fraction of the intended users,” according to Greg Nasif, political director of Humanity Forward.
“They hardly functioned even before the pandemic,” he said, “and they provide parents a full-time job overcoming bureaucratic impediments.” In his opinion, the greatest option for assisting suffering families is to provide “quick, efficient, direct monetary support.”