Checks to U.S. households could provide stimulus after COVID-19 downturn
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There’s a multi-billion-dollar plan to massively stimulate the economy during the COVID-19 epidemic — by sending checks to most American households. It could be a key part of the up to $1 trillion economic stimulus bill being negotiated by Congress and the White House.
Senators have floated numbers ranging from $1,000 to $2,000 per adult. Treasury Secretary Steven Mnuchin said he wants checks to go out “in the next two weeks.” So how would this all work?
Sending a bunch of money to American consumers isn’t all that complicated for the Treasury Department and IRS, according to Louise Sheiner, policy director for the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.
“The government has everybody’s information from W-2s and tax returns and so they actually send out checks or deposit electronically into people’s bank accounts,” Sheiner said. “Whether or not it’s a certain amount per adult, per household, per child, however they decide to do it.”
But getting money into people’s hands right away could be a challenge, according to Douglas Holtz-Eakin, who served on President Bush’s Council of Economic Advisors and is currently president of the American Action Forum.
“We’ve done this twice before — in 2001 and 2008,” Holtz-Eakin said. “It’s not particularly fast. It’ll take six weeks at a minimum to get this set up and executed. It’s not particularly efficient — people don’t update their records, and there are a lot of checks that will not find their intended recipients.”
He said it might be hard for consumers to spend stimulus checks right now. But Sheiner said that’s OK — the money will boost the economy after the epidemic has passed.
COVID-19 Economy FAQs
Will the federal government extend the extra COVID-19 unemployment benefits?
It’s still unclear. Congress and President Donald Trump are deciding whether to extend the extra $600 a week in unemployment benefits workers are getting because of the pandemic. Labor Secretary Eugene Scalia believes the program should not be extended, and White House economic adviser Larry Kudlow said the additional money is disincentivizing some workers from returning to their jobs. Democrats want to keep providing the money until January.
As states lift restrictions, are people going back to stores and restaurants?
States have relaxed their restrictions, and many of us have relaxed, too. Some people have started to make exceptions for visiting restaurants, if only for outdoor dining. Some are only going to places they trust are being extra cautious. But no one we’ve talked to has really gone back to normal. People just aren’t quite there yet.
Will surges in COVID-19 cases mean a return to lockdowns?
In many areas where businesses are reopening, cases of COVID-19 are trending upwards, causing some to ask if the lockdowns were lifted too soon, and if residents and businesses might have to go through it all again. So, how likely is another lockdown, of some sort? The answer depends on who you ask. Many local officials are now bullish about keeping businesses open to salvage their economies. Health experts, though, are concerned.
You can find answers to more questions here.
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