Republican lawmakers have been hesitant to commit to sending a second Coronavirus stimulus check to the general public. However, that appears to be changing.
President Donald Trump grabbed news headlines when he said they would definitely send a second stimulus check and that it would be "generous." Now more and more GOP lawmakers are expressing an openness to sending more direct stimulus payments.
Pros And Cons Of Tail Risk Funds
Editor’s note: This article is part of a series ValueWalk is doing on tail risk hedge funds. The series is based on over a month of research and discussions with over a dozen experts in the field. All the content will be first available to our premium subscribers and some will be released at a Read More
Republicans now open to sending second Coronavirus stimulus check
The odds of Americans receiving a second stimulus check increased dramatically when the president said he definitely wanted to send more money. There was a possibility that he could influence other members of his party, and that seems to be exactly what is happening.
Newsweek reports that several Republican senators expressed openness or even support for sending a second stimulus check to the general public. For example, Sen. Kevin Cramer of North Dakota said if they could get some money into the economy and the market, "that'd be a pretty good thing."
Sen. Thom Tillis of North Carolina also expressed support for a second stimulus check, although with a catch. He believes additional payments should be better targeted to the people who are hurting the most.
How much might the second stimulus check be?
According to Newsweek, GOP lawmakers are expressing an openness to repeat the same payment amounts that were sent the first time around. That would mean the second stimulus check could be $1,200 per adult and $500 per child up to age 17.
The statements from Republican lawmakers represent progress as far as an update on a 2nd stimulus check, but there is still a long way to go before it becomes reality. The good news is that White House officials are also starting to come around to the idea.
Treasury Secretary Steven Mnuchin had lunch with GOP senators on Capitol Hill on Tuesday, and he told Bloomberg that a second round of Coronavirus stimulus checks was "one of the things we're discussing. However, Trump still must convince more officials and lawmakers that more direct payments are needed.
Democrats continue to push the HEROES Act, which was passed by the House of Representatives last month and now is in the Senate. However, there's more support for a second round of stimulus checks than there is for the expensive $3 trillion federal stimulus package passed by Democrats.
What else could be in the federal stimulus package?
Some GOP lawmakers remain opposed to the idea of a second stimulus check despite Trump's comments supporting it. Instead, many are proposing other ways to stimulate the economy, some of which could still put more money in your pocket even if a second round of direct payments isn't included in the phase four package.
Mnuchin also told Bloomberg that they "want to take our time and make sure we are thoughtful." He also said that whatever they end up including in the phase four stimulus package will be "much more focused on jobs and bringing back jobs."
Several GOP senators advised Mnuchin to be careful with additional deficit spending and to narrow down any aid that's provided in the package. Other measures like a payroll tax cut could get more support among Republican lawmakers.
Republicans also want to focus on incentivizing people to get back to work. One of the key issues has been the fact that the extra $600 in weekly federal unemployment benefits has caused many people to receive more money on unemployment than they received on the job.
GOP lawmakers are concerned that the extra benefit could incentivize people to stay out of work for as long as possible, making it difficult for small businesses to reopen. The extra $600 in weekly benefits expires at the end of July.
When might more aid be coming?
Senate lawmakers have made it clear that they don't intend to take up the issue of a phase four stimulus package until after their two-week recess that starts on July 3. That pushes debate on the topic out to at least July 20.
Trump has said they plan to announce a second round of Coronavirus stimulus checks within the "next couple of weeks." While the White House could make such an announcement, there won't be any action on it if lawmakers are on recess at the time.
For now, the only thing to do is to keep watching for updates on a 2nd Coronavirus stimulus check. The odds of more direct payments have increased dramatically, but it's far from a done deal.