Washington lawmakers introduced a new $908 billion coronavirus stimulus package on Tuesday that aimed to appease both Democrats and Republicans.
However, Senate Majority Leader Mitch McConnell, R-Ky., quickly rejected the bipartisan stimulus proposal hours after lawmakers introduced it. McConnell said he does hope to pass a “targeted relief bill” this year. The Republican Senator has maintained throughout the stimulus negotiations that he would prefer that the cost of a new aid package be limited to around $500 billion.
But experts say that the plan might not include enough financial aid for struggling individuals and families.
One key way of getting more money into their hands — a second round of $1,200 stimulus checks — is absent from the proposal.
More from Personal Finance:
Here’s what to do before making a charitable donation
Anti-spending movement gains speed ahead of the holidays
Pandemic sends most young adults home to mom and dad
Meanwhile, the package calls for providing $300 per week in enhanced federal unemployment benefits. That’s half of the $600 per week the government had been providing to jobless Americans up until those benefits expired in the summer.
Both of those payments were provided through the CARES Act, a more than $2 trillion bill that was passed by Congress in March.
For months, Republicans and Democrats have haggled over how big the next bill should be and what aid should be included.
Meanwhile, high unemployment has persisted as the nation has struggled to get the Covid-19 pandemic under control.
The bipartisan bill put forward on Tuesday proposes multiple forms of economic relief: $180 billion to fund $300 per week additional unemployment benefits through March; $288 billion in Paycheck Protection Program loans and $160 billion in aid to state and local governments, according to a draft framework.
It would also help pay for vaccine distribution, Covid-19 testing, contact tracing, education, transportation, rental assistance, childcare and broadband.
No second $1,200 stimulus checks
Many Americans are hoping for more $1,200 stimulus checks. Those one-time payments offer something that unemployment checks can’t — a way to get money into the hands of struggling Americans fast.
“If I had to spend $180 billion … I would rather spend it on stimulus checks than spend it on unemployment benefits,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.
“Even though it’s not as well targeted, it’s delivered in much more efficient way,” he said.
To date, the government has issued about 160 million of the first stimulus checks, totaling more than $270 billion. Those $1,200 payments were mostly based on past tax returns from 2018 or 2019, though non-filers who met the income thresholds were also eligible for payments.
But unemployment benefits were much more inefficient, often because they got held up in states’ systems, Gleckman said.
In order to get money to Americans fast now, stimulus checks would be a better way to go, he said.
Continued wait for more financial aid
The stimulus package introduced on Tuesday may not be enough of a compromise to break Congress’ deadlock on the issue, particularly without McConnell’s support.
Washington lawmakers do need to keep the government funded after Dec. 11 in order to avoid a shutdown. That could come through either a continuing resolution or omnibus appropriations bill.
Some of the stimulus proposals will likely be added on to that initiative, said Bill Hoagland, senior vice president at the Bipartisan Policy Center and a former Senate staffer. That would likely include unemployment benefits and aid to states for vaccine distribution.
But a bigger stimulus package may have to wait until after President-elect Joe Biden’s Jan. 20 inauguration, he said.
“This is a holding pattern, completely, until we get to the Biden administration,” Hoagland said.
“Whatever they’re doing right now is to get us past the special elections in Georgia to know who’s controlling the Senate next year,” he said.
One major hurdle for getting an emergency relief bill done now is whether or not it will have McConnell’s backing, Gleckman noted.
“If they don’t get this done by sometime in mid-December, then it’s going to have to wait until after Jan. 20,” Gleckman said. “Maybe Biden will have more luck in putting together some kind of consensus.”
