Lawmakers may not appear very serious or do not feel the need of sending out another round of stimulus checks. However, those with more expertise on the matter feel otherwise. Many top economists, on Monday, urged Congress to give Americans another round of $1,200 coronavirus stimulus checks.
On Monday, a group of more than 125 economists asked the lawmakers to approve another round of stimulus checks so as to assist people in overcoming the latest wave of the coronavirus pandemic.
“We urge policymakers to use all the tools at their disposal to revitalize the economy, including direct cash payments, which are one of the quickest, most equitable and most effective ways to get families and the economy back on track,” the economists said in an open letter.
These economists included names such as Claudia Sahm, a former Fed economist; Alan Blinder, a former Federal Reserve board vice-chairman; and Jason Furman, a top economist for former President Barack Obama. The Economic Security Project, a group that advocates for guaranteed income, spearheaded the initiative.
In the letter, the economists referred to the stimulus checks as an “essential tool” to keep a check on poverty. Also, they cited research from the Urban Institute which claims that two more stimulus checks could prevent about 14 million people from sliding into poverty.
Studies support direct payments as well
In June, a study by the Center on Poverty and Social Policy at Columbia University found that in the absence of the $2.2 trillion CARES Act, the poverty level in the country would have hit 16.3%, up from 12.8% in the pre-crisis period. The poverty level peaked around 16% at the time of the 2008 financial crisis, as per the data from the U.S. Census Bureau.
As per the economists, the first stimulus checks supported spending the most among low-income people. Similarly, they believe the next round of direct payments “especially if targeted to the bottom half of households” would prove effective in supporting the vulnerable low-income households and households of color.
Further, economists argue that another round of stimulus checks should be complemented with unemployment aid, Supplemental Nutrition Assistance Program (SNAP) benefits, childcare funding, and aid to state and local governments.
Will lawmakers agree?
Experts including Federal Reserve Chairman Jerome Powell argue that more fiscal stimulus is necessary despite the recent vaccine news from Pfizer and Moderna. The surge of coronavirus cases in recent weeks is another reason why experts advocate for another stimulus package.
Democrats are in favor of stimulus checks, but Senate Majority Leader Mitch McConnell is advocating a targeted relief package. McConnell has cited recent positive news of the COVID-19 vaccine to put forward his argument of a small relief package.
Even though McConnell has agreed to resume coronavirus negotiations, a deal is unlikely in the lame-duck session. Congress is already out of session for the Thanksgiving holiday, and the lawmakers still have to agree on the funding to avoid the looming government shutdown deadline on Dec. 11. This leaves them with little time to discuss the relief package.