Round 2 of IRS stimulus checks looks doubtful

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Hope for a round 2 of IRS stimulus checks has been put on hold. The longer lawmakers wait to act, the less likely that there will be another round of coronavirus stimulus checks for everyone.

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Next stimulus package capped at $1 trillion

President Donald Trump reportedly met with economic advisors Kevin Hassett and Larry Kudlow on Wednesday to talk about the next stimulus bill, according to sources who spoke to Bloomberg. The Trump administration expects to spend up to $1 trillion on the next package. Officials settled on that amount after Senate Majority Leader Mitch McConnell said he didn't want to exceed it.

However, the final version of the bill could end up going over that because President Trump wants to include provisions like an infrastructure package, which would push the amount over $1 trillion. Other ideas that could be included in the next stimulus bill include unemployment benefit changes, a credit for workers who return to work after being laid off due to the pandemic, and a payroll tax cut.

The proposals also include liability protection for businesses and doctors and tax deductions for businesses to pay for their employees' entertainment and restaurant expenses. There was no mention of a round 2 of coronavirus stimulus checks, which could mean that it won't even make it into the Trump administration's proposed package.

Why a round 2 of IRS stimulus checks is unlikely

McConnell has said that the Senate has no plans to take up another stimulus package until after the July 4th holiday. That puts debate on a package after July 20, and there's no guarantee that the package will include a round 2 of IRS stimulus checks.

On one hand, some would argue that a second round of IRS stimulus checks is needed because over 40 million people applied for unemployment due to the pandemic. However, Thursday's nonfarm payrolls report showed a significant improvement, which means people are starting to get back to work. By the time July rolls around, most people could be back at work.

On the other hand, Republicans control the Senate, and most don't support a round 2 of IRS stimulus checks. Sen. Mitt Romney called a second round of checks "unlikely," and Sen. Lindsay Graham said he isn't "enthused" about the idea of sending more checks.

The White House has talked about the possibility of sending a second round of IRS stimulus checks, so all hope isn't lost yet. The Trump administration could convince Senate Republicans to include more money for households. However, the fact that a round 2 of coronavirus stimulus checks didn't even make it into the list of proposals reported to Bloomberg suggests that it's unlikely.

The HEROES Act, which did include a second round of stimulus checks, passed the House, but it does indeed appear to be dead in the Senate. Republicans are unlikely to take up debate on the bill at all, and McConnell has said that if there is another package, it will be written in the Senate rather than the Democrat-led House.

New ray of hope for round 2 of coronavirus stimulus checks

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Everyone wants to know if there will be a round 2 of coronavirus stimulus checks. The answer depends on whether Republicans and Democrats can stop bickering long enough to get anything passed. It seemed like there wouldn’t be a round 2 of coronavirus stimulus checks, but a recent comment from a Trump advisor suggests Republicans and the White House could change their minds.

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The big question now will be whether Democrats will allow a second round of stimulus checks to pass without any of their extra projects attached to it.

Coronavirus stimulus checks round 2: "pretty likely"

White House economic advisor Kevin Hassett told CNN on Friday that it looks "pretty likely" that lawmakers will pass a phase four coronavirus stimulus package. In fact, he said that a phase four stimulus package will probably pass "sooner rather than later."

He made the remarks in an interview about unemployment, which reached 14.7% last month. Hassett expects unemployment to increase to between 22% and 23% this month and then peak in June after rising a little higher than May.

Even though he doesn't expect unemployment to peak until next month, he does believe many furloughed and unemployed workers could return to the workforce faster than he thought previously. He credited the Federal Reserve and lawmakers with "the biggest policy response ever" to the "biggest negative shock ever."

Will round 2 of stimulus checks pass the Senate?

The Democrat-led House of Representatives passed a round 2 of coronavirus stimulus checks as part of a bigger package, but now the Senate must vote on the package. Some of the things that were included in that package are unlikely to receive Republican approval in the Senate, but it is possible that some of the HEROES Act will survive.

Several Democrat proposals for a round 2 of coronavirus stimulus checks actually included monthly payments for the next six months to a year. Such proposals are unlikely to pass the Republican-led Senate, but the provision for a round 2 of stimulus checks in the HEROES Act could pass.

The reason is because the bill calls for a round 2 that's very similar to the first round of coronavirus stimulus checks. A key difference is that it includes more people that were excluded from the first round and increases the amount received for dependents.

Like the first round of checks, the HEROES Act calls for payments of up to $1,200 per adult, depending on income. However, it increases the amount for dependents from $500 to $1,200. It also includes dependents over the age of 16, including full-time college students up to age 26 and other adult dependents. The maximum payment for a family would be $6,000.

What else could be included?

Beyond the round 2 of coronavirus stimulus checks, the other elements of a phase four package remain up in the air. For example, Democrats want to increase the length of time the expanded unemployment benefits last from July to January.

However, Republicans are concerned about that because the extra $600 per week means some workers get more money from not working than they would if they returned to work. Instead, Republicans want to put through a payroll tax cut to incentivize people to return to work as soon as they are able.

The HEROES Act also calls for hazard pay for front-line workers. On the other hand, it doesn't include infrastructure spending, which is something many Republicans want to see. The bill is also missing liability protections, which is something else Republicans want to include in phase four.

The Senate went on break for the Memorial Day week without taking up debate on the HEROES Act or any other phase four stimulus package. The next deadline for anything to pass would be July 3, the last day before the Senate leaves for the July 4th holiday.