It is largely believed that the U.S. economy needs another stimulus round to get the economy back on track. Even three months after the first stimulus round, there is no official information about a timeline, dollar amount on the next stimulus package, or if it would include stimulus checks. President Donald Trump, however, came up with very encouraging news on Monday for those waiting eagerly for coronavirus stimulus checks 2.
Coronavirus stimulus checks 2 to be “generous”
President Trump, on Monday, reiterated support for another round of stimulus checks to help the economy recover amid coronavirus pandemic. Trump, in an interview with Scripps local TV news, said he is open to coronavirus stimulus checks 2.
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
During the interview, when Trump was asked if he would give Americans another round of payments, he said, “Yeah, we are. We are.” He said that it would be very “generous.”
“We will be doing another stimulus package,” Trump said. “It will be very good. It will be very generous.”
Trump, however, did not share the amount that the people would get in the next stimulus checks. When asked about the amount, Trump dodged the question, saying, “You’ll find out about it.”
On when we could expect the coronavirus stimulus checks 2, Trump said he expects the next round to be bipartisan and come over the next couple of weeks.
Trump’s support for the next stimulus checks is backed by another White House official, who told NBC News that the economic team is studying the possibility of the next direct payments, but no decision has been made yet.
However, many Republicans have suggested that they are not in favor of a second round of coronavirus checks. Earlier this month, Senate Republicans hinted that they are more in favor of creating jobs and increased Social Security benefits.
Democrats, on the other hand, favor stimulus checks. They are backing the $3 trillion House-passed HEROES Act, which offers up to $6,000 to a family. However, the Senate Republicans do not support the bill and called it dead on arrival. Senate Majority Leader Mitch McConnell referred to the bill as nothing more than “a liberal wish list.”
Next stimulus round: when to expect it?
Americans received the first stimulus checks under the CARES Act, which was passed in March. It helped many cash-strapped families to meet their needs during the lockdown. Not much has changed since then in terms of economic activities.
Even though last month’s unemployment numbers were encouraging, economic uncertainty and instability in the labor market have left millions with no or reduced income. Moreover, the $600 federal unemployment benefit is also going to expire next month. It has been a life-line for many over the past few months, but once it expires, these people would need other support.
This is the primary reason why the White House needs to come up with another round of stimulus checks. A recent survey by WalletHub showed that about 84% of Americans favor a second round of stimulus checks.
The survey also claimed that 160 million Americans have only three months of cash left with them. This seems to suggest that lawmakers will have to move quickly on the coronavirus stimulus checks 2.
Trump suggests that we may have a decision on the next round in a couple of weeks. But this may not be correct. The Senate is expected to take a two-week break from July 3 to July 17. This slims down the chances of a decision on the next round coming in the next two weeks.
After this two-week recess, the Senate will go on a break again until September. So, this leaves only late July for any action on the second stimulus checks. If the decision on the stimulus payment doesn’t come until the first week of August, then there may not be any stimulus checks.
Coronavirus stimulus 2: what to expect?
As said above, Senate Republicans are not favoring direct payments, but Trump seems to support it. In case what Trump says is true and the next relief packages include stimulus checks, then it is very likely that the package would also include liability protection, something that McConnell has talked about before.
McConnell is in favor of liability protection for schools and businesses. Such a provision would prevent schools and businesses from being sued if someone gets infected with coronavirus on their property.
“Part of getting back to normal is to not let there be a second epidemic in the wake of the pandemic, and the epidemic would be an epidemic of litigation,” McConnell said.
The rising federal deficit is another reason that goes against the stimulus checks. McConnell has expressed concern over how the relief packages are affecting the federal deficit, which is now already over $25 trillion.
“We now have a national debt that is the size of our economy for the first time since World War II,” McConnell said. “That’s why I think this next bill should be carefully crafted after we begin to see the impact of reopening again.”
Along with the liability protection, many Republicans are also not in favor of renewing the $600 federal unemployment benefit. These benefits expire next month. Instead, there are proposals to introduce a bonus check to encourage employees to go back to work.
“A lot of folks are getting paid more not to work than to work and that is counterproductive,” McConnell said. “The goal here is to get people back to work.”