Washington is debating the merits of a second stimulus package to boost the US economy.
Sarah Tew/CNETWith the US unemployment rate appearing to drop in May and coronavirus infection rates rising in more than 20 states, leaders in the White House and Congress are deliberating a second stimulus package and its impact on the US economy. In one camp are supporters who insist another round of checks will be necessary to help people who are struggling from job loss as a result of illness and business closures. On the other are those who believe that reopening the economy will encourage people to return to work and to the usual flow of daily life.
On Wednesday, a new report from the OECD that says COVID-19 has "triggered the most severe economic recession in nearly a century."
If there is a second stimulus check -- and some signs suggest momentum in this direction -- House Democrats, Senate Republicans and White House advisers each have different visions for what a second financial rescue bill would contain, including how much money would be allocated for individuals, families and unemployed workers. To move forward over the coming months, White House and congressional leaders will need to find common ground.
Here's what we know today about the various proposals for a second stimulus package. This story updates frequently with new information and is intended to provide an overview of the situation. If you're waiting for your first stimulus check, you can track the status of your stimulus check with the IRS, see some possible reasons why you don't have a check yet, and what to do if your check never arrives.
Congress is expected to start work soon on a new coronavirus stimulus bill that may put up to $1,200 more in your wallet.
Angela Lang/CNETWhen will the government decide if there will be a Round 2?
There's no set timeline for deciding if a second stimulus payment will occur. Senate Majority Leader Mitch McConnell has said Congress may decide in the next few weeks if it will take up another round, CNBC reported in late May, with the bulk of the work happening in July (more below).
White House officials had previously anticipated that the executive branch will work on its own proposal through July, according to The Wall Street Journal.
It's hard to know if the protests sweeping the globe in response to the death of George Floyd, Breonna Taylor and Ahmaud Arbery will affect the government's agenda.
Do we still need a second stimulus check?
In Senate testimony on Wednesday, Treasury Secretary Steven Mnuchin said the US economy may need more help. "I think we're going to seriously look at whether we want to do more direct money to stimulate the economy," he said. "This is all going to be about getting people back to work."
Last week, the Bureau of Labor Statistics reported (PDF) that the US unemployment rate in May declined by 1.4% to 13.3%. Following the labor report, some in Washington asked if the US economy is already heading in the right direction without further government assistance.
"It takes a lot of the wind out of the sails of any phase 4," Stephen Moore, a White House adviser, said about the job numbers and a second stimulus package, according to the Washington Post. "We don't need it now. There's no reason to have a major spending bill. The sense of urgent crisis is very greatly dissipated by the report."
Others in Washington, however, caution against reading too much into one month's numbers.
"There is good reason to be skeptical," wrote former White House economic adviser Robert J. Shapiro, pointing to other numbers that suggest the jobless rate in May rose by 5.7% to 19%. Whatever the real May jobless numbers turn out to be, the US economy in February entered a recession, ending an economic expansion that started in June 2009, the National Bureau of Economic Research reported this week.
Even with a reduced May unemployment rate, the US still has one of the highest rates of out-of-work job-seekers in the world, according to the aforementioned OECD report.
It's also unknown how the US economy will react to a spike in coronavirus infections, with hospitalization rates reportedly rising following the Memorial Day weekend.
The three major proposals for the next stimulus check
In a nutshell, the Democratic proposal for a second round of payments is the most developed, with its Heroes Act passing a House vote in May. It is now with the Senate. The House package -- if signed into law, which isn't looking likely -- would provide a second round of payments to individuals and families and extend enhanced unemployment benefits through the end of the year.
The White House plan is still taking shape, according to The Wall Street Journal, with President Trump and his economic advisers looking to boost the US economy with incentives for workers to find or return to their preexisting jobs, eat at restaurants and take vacations, for example.
Senate Republicans, led by McConnell, have sketched out parameters they want to follow for a second round, including a cap on the size of the bill and a stipulation it will be the final stimulus package related to the coronavirus pandemic.
More details on all of these potential approaches below.
Watch this: Stimulus Checks Helpline
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How much money could I get in a second stimulus check?
The Heroes Act passed by the House would include a second direct payment to individuals and households of up to $1,200 per family member, capped at $6,000 for a family of five. Neither White House officials nor McConnell have offered specifics on whether individual payments would be part of their proposals.
Outside of the three major proposals, others in Washington continue to push for additional aid for Americans. Senator Kamala Harris earlier this month said a one-time payment of $1,200 is not enough. She proposes to send $2,000 per month to eligible Americans till January 2021.
The White House vision for the second stimulus check
President Trump has already expressed support for a second round of stimulus money. "We'll be asking for additional stimulus money," Trump said Friday from the White House Rose Garden. "Because once we get this going, it'll be far bigger and far better than we've ever seen in this country -- that includes as of three or four months ago, when everyone thought it was great and it was great."
During his remarks last week, the president also mentioned support for restaurants, many of which are now reopening with social distancing restrictions after closing because of the pandemic.
According to The Wall Street Journal, the White House will begin sketching out its own proposal for a second stimulus package as soon as this week. It's expected to focus on initiatives that could help the US economy recover, such as incentives for workers to find jobs and for people to spend money in their town.
The White House is also considering reducing unemployment payments to $250 or $300 a week during the second half of the year, which Republicans believe will induce people who lost their jobs to find work. Currently, payments are $600 a week, as part of the CARES Act passed in March. The enhanced benefits expire July 31.
President Trump continues to push for payroll tax cuts, an idea he brought up in March. "We will be going for a payroll tax cut," he said this past Friday, "which will be incredible in terms of what we are doing because we are going to be bigger and better than we ever were."
The White House is also looking at tax breaks for those who take a vacation in the US this year to encourage spending, the Journal reported. Japan has taken a similar approach to encourage domestic travel. Presidential aides predict the terms of its package won't be completed until July, according to the Journal.
What does the House's Heroes Act propose?
The Heroes Act seeks a wide range of benefits for households, renters and noncitizens who live in the US, according to a fact sheet from the House Appropriations Committee (PDF). Because it's still a proposal, the details of the stimulus package are not guaranteed, but here are outlines of the bill.
Individuals: An eligible person would receive up to $1,200 if their adjusted gross income, or AGI, from their 2019 federal tax filing or 2018 filing (if you haven't filed taxes yet) was less than $75,000 and incrementally decrease as the AGI goes up.
Children and dependents: Each dependent would qualify for a $1,200 payment, unlike the first stimulus bill, which capped up to three children at $500 apiece. It would apply to college students, children over 17, disabled relatives and a taxpayer's parent.
Families: Households would qualify for a maximum payment of $6,000 total, capped at five family members at $1,200 apiece. The amount you'd be eligible to receive would decline the higher your AGI is.
Noncitizens: Those without a Social Security number could use an individual taxpayer identification number to qualify for a payment.
Unemployment benefits: The bill would carry over the current enhanced unemployment benefit of $600 per week (on top of states' typical unemployment payout) to January 2021.
Global scenes of Black Lives Matter protests show outrage far beyond US
See all photosWhat are Republican leaders proposing?
While the Senate decides in the coming weeks if it will take up another stimulus package, Republicans have started sketching out the parameters of their own. The Senate may wait till the end of July to start work on the package, Bloomberg reported.
How could a second stimulus check help the economy?
The first stimulus checks for up to $1,200 apiece were initially intended as a one-time payment to help the people and businesses affected by the coronavirus outbreak. That includes people who couldn't work because they got sick, received limited work hours or lost their jobs when businesses closed as a measure to slow the spread of COVID-19.
A second stimulus bill could be the last for Americans affected by the coronavirus pandemic.
Angela Lang/CNETBut Americans continue to show concern about the state of the economy since the start of the pandemic, according to a June 5 poll by the Financial Times, with more than a third now saying a global slowdown is the biggest threat to the US economy.
Under that backdrop, and with high unemployment and a potential global recession ahead, some wonder if the first check did enough for individuals, families, businesses and those who are out of work and are looking at how best to distribute additional aid.
Earlier this month, the Labor Department reported 1.9 million Americans filed new unemployment insurance claims for the last week of May, with 21.5 million receiving unemployment benefits by the week of May 23. That was actually a drop, as more people went back to work, with the national unemployment rate declining from 14.7% in April to 13.3% in May as states allowed businesses to reopen.
During a recent Senate hearing, the Chair of the Federal Reserve Jerome Powell called for additional economic relief. In May, the International Monetary Fund forecast a deep global recession that could become the worst since the Great Depression.
Is the IRS done sending the first wave of stimulus checks?
The IRS continues to send stimulus checks to eligible Americans. As of June 3, it had made 120 million payments as direct deposit to bank accounts, 35 million as mailed checks and nearly 4 million as mailed prepaid debit cards, for 159 million payments total. The House Ways and Means Committee estimated last week (PDF) as many as 35 million Americans could still be owed a payment.
If you didn't get your money yet, here are 10 possible reasons for a delay. If you're worried you were supposed to receive your check and didn't, here's what you can do.
Even with some businesses starting to open, the US has reached an unemployment rate of 17.2%.
Angela Lang/CNETWhat will it take to get a second stimulus check and what happens now?
For now, we wait. It's clear that a second stimulus check won't happen immediately. If the government won't make a decision on moving ahead until closer to the end of June, it could take weeks after any legislation passes for a check to come your way.
To receive a second stimulus check, the proposed rescue package would need to pass both the House and the Senate before receiving a signature from President Trump. Only then could it take effect. After that, the IRS now has a system in place to organize and distribute those checks.
We'll continue to update this story with new information as it arises. While the future of a second stimulus bill remains undecided, we'd like to share available resources about unemployment insurance, what you can do if you've lost your job, what to know about evictions and late car payments, and how to take control of your budget.
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