Coronavirus stimulus update: Trump wants larger checks

Coronavirus stimulus update: Trump wants larger checks
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There haven’t been very many updates on a second round of coronavirus stimulus checks, but President Donald Trump has again backed more direct payments for the American people. In fact, this time around, he said he wants the second round of coronavirus stimulus checks to be larger than the first round of checks.

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Coronavirus stimulus update: Trump supports more checks

The president told Fox Business on Wednesday that he not only supports a second round of coronavirus stimulus checks, but he also wants them to be larger than what the Democrats have suggested. The Democrat-led House of Representatives passed the HEROES Act in May, which would send a second round of coronavirus stimulus checks to the American people. The checks would be $1,200 per adult and $1,200 per dependent of any age.

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The checks were more generous than the first round that was sent out as part of the CARES Act because the CARES Act only sent $500 per dependent up to age 16. However, Trump apparently supports even higher amounts for the second round of coronavirus stimulus checks.

He also emphasized that the second round of stimulus checks must be "done properly." He wants money getting into people's hands "quickly and in a noncomplicated fashion."

More requirements for the phase four stimulus package

In the update on a second round of coronavirus stimulus checks, Trump also said he wants to see the phase four stimulus package create "a great incentive to work." It appears to be a reference to the extra $600 in weekly unemployment benefits, which caused most people to be paid more on unemployment than they were getting paid on the job.

Democrats want to extend the extra $600 in unemployment benefits beyond the expiration at the end of July. However, Republicans oppose the idea because it incentivizes people to stay out of work for as long as possible. If people won't return to work, it will be difficult for small businesses to reopen and get the economy moving again.

The Trump administration has advocated a back-to-work bonus instead of an extension of the extra $600 in weekly unemployment benefits. Republicans have also pushed for a payroll tax cut, which would provide further incentive to get back to work because it benefits those who are working.

However, Democrats oppose a payroll tax cut, so it may not receive bipartisan support if it's included in the phase four stimulus package. The bill must pass both the GOP-led Senate and the Democrat-led House.

When might there be another update on coronavirus stimulus checks?

Senate Majority Leader Mitch McConnell said on Tuesday that the Senate will approve the phase four stimulus package this month before leaving for recess in August. Lawmakers are on a tight deadline, however. They Senate leaves for a two-week holiday tomorrow, and senators won't return until July 20.

The Senate's August recess starts at the end of business on Aug. 7, but the House of Representatives goes on recess for the entire month of August. That leaves Congress only two weeks to get the phase four coronavirus stimulus package through both houses.

Of course, if the bill starts in the House and then goes to the Senate, that would add an extra week to the process, which would be a good thing. With all the bickering going on among lawmakers, it's difficult to imagine that they will be able to agree on a package in only three weeks, let alone two.

However, they are motivated to get something done, so we could get an update on a second round of coronavirus stimulus checks sooner rather than later. It is an election year, so lawmakers want to make sure the American people feel as if they are being taken care of during the COVID-19 crisis so they will get reelected.

What might be in the phase four stimulus package?

On Tuesday, the Senate voted unanimously to extend the amount of time business owners have to apply for the Paycheck Protection Program. The deadline was Tuesday. Unfortunately, it isn't a done deal yet as the House of Representatives still has to approve it. It would be good news for business owners who missed Tuesday's deadline.

When lawmakers do finally get to work on the phase four stimulus package, the big question is what will be included in it. A political analyst told CNBC that there are three provisions that could make the final cut despite all the bickering that's been going on.

Those looking for updates on a second round of coronavirus stimulus checks will be happy to hear that Raymond James analyst Ed Mills believes more direct payments will be included. He also expects the "pot of money" in the phase four stimulus package to go toward continued unemployment benefits and some back-to-work bonuses.

He said Republicans could be convinced on those measures because the number of COVID-19 cases is surging in a number of states that voted Republican four years ago. Since it is an election year, lawmakers will be thinking about ways to capture as many votes as possible.

Mills also noted that July 1 marks the beginning of the new fiscal year for 46 states. Since states are required to operate with balanced budgets, there could be a fresh round of layoffs in the public sector unless something changes.

Further, many states have paused their reopening plans as the number of coronavirus cases surges once again. Since the extra unemployment benefits expire at the end of July, it seems likely that there could be some movement on that issue, even if it isn't an extension of the entire $600 in weekly benefits that Democrats want to see.

The key will be whether lawmakers can come to a compromise in time to beat the August deadline. Mills added that since he expects one pot of money to be used for all three provisions, the one thing that could see a reduction is unemployment benefits.

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