Coronavirus stimulus check 2 update: where Congress stands

0

Many people are constantly looking for an update on coronavirus stimulus check number 2. Congress still hasn’t passed a phase four stimulus package, and little progress has been made on it despite the House’s passing of one. There is a ray of hope as far as an update on coronavirus stimulus check number 2, however.

Get The Full Seth Klarman Series in PDF

Get the entire 10-part series on Seth Klarman in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q1 2020 hedge fund letters, conferences and more

Coronavirus stimulus check number 2 update: what's the holdup?

The House of Representatives passed a stimulus package that would provide checks of up to $1,200 per adult and $1,200 per dependent, but the Senate hasn't done anything with it yet. The good news is that Senate Majority Leader Mitch McConnell now says Congress will "probably" have to pass a phase four coronavirus stimulus package to deal with the fallout from the pandemic.

Q2 Hedge Funds Resource Page Now LIVE!!! Lives, Conferences, Slides And More [UPDATED 7/3 17:55 EST]

Q2 Hedge Funds Resource PageSimply click the menu below to perform sorting functions. This page was just created on 7/1/2020 we will be updating it on a very frequent basis over the next three months (usually at LEAST daily), please come back or bookmark the page. As always we REALLY really appreciate legal letters and tips on hedge funds Read More


The fact that this statement comes from the leader of the Senate is particularly good news because it could mean there will be some movement on the phase four stimulus package passed by the House. However, the Republican-run Senate may have no plans to pass the Democrat-led House's bill.

Instead, the Senate may work on its own stimulus package so that more of the things Republicans want are included in it. If the Senate does look at the House's bill, it may end up being gutted because it includes many things Republicans disagree with.

One thing both parties may agree on is that a second round of coronavirus stimulus checks is needed. However, there is likely to be a great deal of political wrangling before a phase four stimulus package passes both houses of Congress and makes it to President Trump's desk.

What might be in a phase four stimulus package?

According to CNBC, McConnell, a Republican from Kentucky, said any phase four coronavirus stimulus package they pass will have a much narrower scope than the bill passed by the House. He said the progress made by states on reopening their economies in the next several weeks will impact what they decide to do.

He also said the next few weeks will help them determine whether there should be a phase four stimulus package. So far, Congress has passed four bills to deal with the fallout from the pandemic, with the fourth bill being tagged as "phase 3.5."

McConnell did not provide an update on whether there will be a coronavirus stimulus check number 2 as part of any phase four package they might pass. He did say he would push for protection from liability for businesses and doctors as states reopen their economies.

He also mentioned something Democrats want to see, which is aid for state and local governments. However, he wants the aid to cover only increased expenses and lost revenue caused by the fallout from the pandemic. The House's bill included $1 trillion in aid for state and local governments.

Disagreement on unemployment

He added that they need to ensure that they have "unemployment insurance properly funded for as long as" is needed. Tens of millions of people have been out of work due to the pandemic, and it will take some time before everyone is back at work. Unemployment was at 14.7% last month.

McConnell's mention of unemployment suggests Democrats and Republicans could come to agreement on it, an issue that previously was only the interest of Democrats. The House's package extended the extra $600 in weekly unemployment pay until January, although McConnell said as recently as last week that they will not extend the extra $600, which currently expires at the end of July.

Republicans don't want to incentivize people to stay home from work because the extra money means they get paid more for staying home than going to work. McConnell's comment this week suggests the Republicans might be willing to do something on the unemployment front, but it's unclear just what or how long the extra aid might last.

Update on how much coronavirus stimulus check number 2 might be

Those looking for an update on coronavirus stimulus check number 2 will be happy to know that the Senate may include direct payments to households in its package, even if it starts from scratch instead of using the House's bill. The Trump administration and key Republicans have indicated a willingness to include a second round of coronavirus stimulus checks in the next package.

The first round of coronavirus stimulus checks included payments of $1,200 per adult and $500 per dependent up to age 16. Older dependents who were claimed on someone else's tax return were not eligible to receive payments. If the Senate starts from scratch, it would be reasonable to expect a similar plan for direct payments.

There's a key reason to expect the update for coronavirus stimulus check number 2 to also be $1,200, and it's not because the first round of checks was. 11 Alive pointed out that a month's worth of salary at the federal minimum wage of $7.25 per hour amounts to $1,160. When you round that up, you get $1,200.

An accountant told the news outlet that many things are based on minimum wage, so this makes sense. He also said the $500 per child could be based on the child tax credit, which started at around that level in the 1990s.