A phase 4 stimulus package is likely, according to one White House economic adviser, but it’s unclear whether it will include a round 2 of stimulus checks from the IRS. The timing of the next stimulus bill seems rather clear though as the Senate doesn’t plan to take up debate on it until after the two-week recess that starts on July 3.
Phase 4 stimulus package is “very, very likely”
Senior White House advisor Kevin Hassett said during The Wall Street Journal‘s virtual summit on Tuesday that the odds of a phase 4 stimulus package are “very, very high.” He also said the Trump administration “would definitely support” more financial assistance for the economy as businesses start to open back up during the COVID-19 pandemic.
Senate Republicans have made much of the recent jobs report that showed the economy added 2.5 million jobs in May. Even President Trump has said the economy is well on its way to recovery, based on that jobs report.
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However, Hassett said a phase 4 stimulus package is likely even if data on jobs and output continue to beat expectations. The unemployment rate fell to 13.3% in May, while economists had been forecasting an increase to 19.5%.
Hassett told The Wall Street Journal that he expects June to bring the addition of 3.5 million to 4 million more jobs. However, he added that Congress will have to keep working to make sure that the economic recovery is solid.
He told Fox Business on Friday that President Trump told his advisers to pay attention to economic numbers and build a “menu of options” that depend on how well the economy is doing. He added that if the job numbers trend in the direction they did in May, the phase 4 stimulus package will probably look a lot different than if the numbers look more like April’s jobs numbers.
Will there be a round 2 of IRS stimulus checks in the package?
Trump’s advisers aren’t saying much about the possibility of a round 2 of stimulus checks from the IRS. The Trump administration has previously expressed an openness to send more checks, but it’s unclear whether the option will get much support in the Senate.
Instead of a round 2 of checks from the IRS, Americans may be more likely to receive stimulus in other forms, like a payroll tax cut and back-to-work bonus. Neither the Trump administration nor Senate Majority Leader Mitch McConnell supports an extension of the extra $600 per week in federal unemployment benefits.
The big concern among Republicans is the fact that many workers who have been laid off are earning more money on unemployment than what they earn while working. As a result, they are not incentivized to return to work when their workplaces reopen, which will cause problems for small businesses as they try to open back up.
Republicans have emphasized that a phase 4 stimulus package will focus on getting the economy going again after the pandemic. Thus, the possibility of a round 2 of stimulus checks from the IRS looks small, but it could happen if lawmakers feel the need to provide more stability for the economy. It could also make it into the package as part of a compromise between lawmakers on both sides of the aisle.