The majority of Coronavirus stimulus checks promised by the CARES Act have already been sent, and would have likely been spent by Americans as well. With economic activities still far from normal, people are anxiously waiting for coronavirus stimulus 2. However, we haven’t yet seen anything conclusive on the second relief package except for remarks from high-profile officials. This has somewhat dimmed the expectations of the next stimulus checks. On the other hand, many believe that there is still time, but if no decision is reached until the first week of August, then the next stimulus checks are very unlikely.
Why is August 8 the deadline?
For a bill to be turned into law, it needs to pass the House of Representatives and the Senate. So far, the only serious bill for the second round we have seen is the HEROES Act. It has already passed the House of Representatives, but is yet to be discussed in the Senate.
However, it is very unlikely for the HEROES Act to pass in the Senate in its current form. Many in the Republican-controlled Senate have expressed concern over the cost of the additional stimulus money, while Senate Majority Leader Mitch McConnell declared the bill dead-on-arrival.
This, however, does not mean that there would be no second round. Trump and many White House officials have favored the coronavirus stimulus 2, but time is running out fast. So far, there have been no discussions over the next bill in the Senate, which will go for a month-long recess on August 8.
Thus, many believe that August 8 is likely the deadline for the Republicans and Democrats to negotiate the coronavirus stimulus 2. It is believed that a month-long break would weaken or kill the momentum for the second stimulus.
After the August 8 recess, the Senate will reconvene on September 8, or more than two and half months from now. It is a long enough time for things to change, and who knows whether or not there would be any need for stimulus checks by then. With businesses slowly starting to reopen and dropping unemployment numbers, it is likely that the need of stimulus checks would diminish by then.
If you believe there is still a lot of time before August 8, then you probably have forgotten that the Senate is due to take a two-week break from July 3 to July 17. This means that when the Senate reconvenes after July 17, it would have less than three weeks to decide on the next stimulus round.
Recent comments from Senate Majority Leader Mitch McConnell also support the August timeline for the next stimulus. McConnell, who previously also talked about the July date for the second stimulus, reaffirmed it again recently.
Do you know which under-the-radar stocks the top hedge funds and institutional investors are investing in right now? Click here to find out.
“We need to take a look at how the economy is coming back, and decide whether or not we’re going to do one last rescue package,” McConnell said a few days back, according to CNET. “And I predicted we’d make that decision in July and I’ll continue to say that today.”
There are also chances that the need of the next stimulus package could increase if the U.S. witnesses a second wave of the coronavirus. But, even if the cases rise, it may not hit the economy as hard as it did the first time because the country is more prepared now.
Another reason why the Senate may not focus on the next stimulus round after the month-long break is the upcoming presidential election. After the Senate reconvenes on September 8, the election (the Nov. 3) will be just two months away. If there is nothing alarming at the time related to coronavirus and the economy, then the Senate would likely focus on election-related priorities.
Next stimulus package – what to expect?
Talking of how much the next stimulus package could be, many believe it could be similar to the first round, i.e. about $2 trillion. Though the House has passed the $3 trillion relief package – the Heroes Act – on May 16, it is very unlikely that the Senate would fully agree to it. The Heroes Act promises up to $6,000 for U.S. families.
McConnell, who has rejected the Heroes Act, recently said that if the next relief package is passed, it will, “emerge in the Senate, it will be written beginning in my office, it will be done in July.”
President Trump wants at least $2 trillion for the next stimulus. Last week, he talked about the prospect of the second stimulus package, saying it could be “dramatic.”
“I think we’re working on something that’s going to be very dramatic, very good,” the president said. “I think we are looking at a Phase 4. Phase 1, 2 and 3 have been fantastic for people generally.”
In case the Democrats and Republicans reach a consensus and sign the stimulus package, which includes stimulus checks, at the beginning of August, then people can expect the initial deposits by the weekend of August 22/23. The majority of payments would come by the end of September. Those who don’t have bank accounts would have to wait until the end of the year to get the second payment, if any.