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Debate over second round of coronavirus stimulus checks

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President Trump says he will only support a second round of coronavirus stimulus for the general public if it includes a payroll tax cut. That could be a barrier to Americans receiving more checks because lawmakers don’t widely support a payroll tax cut.

Q1 2020 hedge fund letters, conferences and more

Will more stimulus be needed?

White House advisor Larry Kudlow said over the weekend that he wouldn’t “rule out” a second round of coronavirus stimulus for the general public. However, he also said that the Trump administration hasn’t decided what to do yet.

White House economic advisor Kevin Hassett said the U.S. may not need another round of coronavirus relief measures. He told Fox News over the weekend that it’s good news that states are reopening their economies.

If Congress passes more stimulus measures, it would be the fourth total round of coronavirus relief, and there’s no guarantee that it will include anything for the general public. Hassett said if a fourth phase of relief is necessary, it may be aimed at “growth and taking off and recovering, rather than just building a bridge to recovery.”

Trump has said that lawmakers will “take a little bit of a pause” before passing a fourth phase of coronavirus relief measures.

Trump: second round of coronavirus stimulus needs tax cut

During a virtual town hall on Fox News, Trump said he wants to see Congress pass a large infrastructure bill to revive the economy. However, he also said a payroll tax cut must be part of any talks about a second round of coronavirus stimulus for the general public.

He said he told Treasury Secretary Steven Mnuchin that “we’re not doing anything unless we get a payroll tax cut.” He said a “very strong” payroll tax cut would “really put people to work.” He also said infrastructure is important.

Vice President Mike Pence emphasized that the way to get people back to work is to open up America again. He noted that several governors are gradually lifting their stay-at-home orders that closed non-essential businesses.

Other points of contention in stimulus measures

Trump’s call for a payroll tax cut isn’t the only potential barrier to a second round of coronavirus stimulus for the general public. Democrats are pushing for aid for state to be included in the bill.

States have seen their tax revenues plunge due to shuttered businesses while their expenses rise due to a sharp rise in unemployment, COVID-19 testing and other emergency measures. Trump has said he would consider funding for states, although some Republicans don’t like the idea of bailing out states that have a long track record of poor fiscal management. Trump has also said he is opposed to bailouts for states.

Senate Majority Leader Mitch McConnel said the next round of stimulus measures must offer liability protections for employers in order to pass the Senate. The Senate returned to work today, while the House of Representatives is scheduled to return next week if the next round of coronavirus is ready to be voted on.

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Proposals for a second round of coronavirus stimulus checks

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Americans are still receiving payments from the first round of coronavirus stimulus checks, but calls for a second round are increasing. Some proposals go so far as to call for monthly payments to consumers for a set period of time, while others would institute a second round of one-off payments.

Q1 2020 hedge fund letters, conferences and more

Proposal for a second round of coronavirus stimulus checks

According to Forbes, the Automatic BOOST to Communities would provide a second round of coronavirus stimulus checks plus a monthly payment via a debit card. The bill calls for an initial $2,000 payment, followed up by $1,000 payments every month until one year after the COVID-19 crisis is over.

It calls for the use of a BOOST debit card instead of checks to help those who do not use a bank or have access to check cashing services. Taxpayers, their dependents and even non-citizens would be eligible for the payments. Americans living in unincorporated territories and abroad would also be eligible to receive the payments.

Each taxpayer and their dependent would receive their own debit card with $2,000 initial payments and $1,000 monthly payments. For example, a family of four would receive four debt cards with the same amount deposited on each card.

Other proposed stimulus measures

Forbes provided a rundown of three other proposals for additional stimulus. They wouldn’t provide a second round of coronavirus stimulus checks, although one does call for monthly payments.

The Emergency Money for the People Act calls for $2,000 stimulus checks every month for up to a year. Married couples would receive $4,000 a month for up to a year. All taxpayers and dependents age 16 and up would receive the entire $2,000 if they earn less than $130,000 per year or $260,000 per year for married couples. The bill also calls for $500 per child under the age of 16 up to a maximum of three children. It enables the stimulus payments to be provided via check, direct deposit, prepaid debit card. or PayPal or other mobile money platforms.

The Rent and Mortgage Cancellation Act calls for mortgage and rent payments on primary residences to be canceled for up to a year. Homeowners and renters wouldn’t accumulate any debt, so the payments would be completely canceled instead of delayed via forbearance like mortgage payments can be under the CARES Act.

The bill would also et up the Rental Property Relief Fund and the Home Lenders Relief Fund under the management of the Department of Housing and Urban Development. The funds would pay mortgage holders and landlords to cover losses that are racked up by homeowners and tenants not making their mortgage or rent payments.

The Getting America Back to Work Act would create a refundable payroll tax rebate to cover up to 80% of payroll costs up to the median wage. It would also pay a rehiring bonus for employees who were laid off due to the coronavirus pandemic. The program would last as long as the COVID-19 crisis continues.

The bill would help ease some of the pressure on states’ unemployment systems, which have been overwhelmed as millions of Americans filed for unemployment after being laid off due to COVID-19.

Our Editorial Standards

At ValueWalk, we’re committed to providing accurate, research-backed information. Our editors go above and beyond to ensure our content is trustworthy and transparent.

Michelle Jones
Editor

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