Stimulus check round two update: Here’s why next week is crucial

Coronavirus

FILE – In this April 23, 2020, file photo, President Donald Trump’s name is seen on a stimulus check issued by the IRS to help combat the adverse economic effects of the COVID-19 outbreak, in San Antonio. Hundreds of thousands of dollars in coronavirus relief payments have been sent to people behind bars across the United States, and now the IRS is asking state officials to help claw back the cash that the federal tax agency says was mistakenly sent. (AP Photo/Eric Gay, File)

WASHINGTON (Nexstar Media Wire) – If you’re one of the millions of Americans hoping to receive a second round of stimulus relief, you might be out of luck. A new report from The Hill says additional financial support may hinge on next week’s jobs report.

May’s report showed the country gained 2.5 million jobs. If that trends continues in June, many analysts feel lawmakers would move past a second round of stimulus checks pointing to early signs of an economic recovery.

The Hill reports lawmakers would be more likely to extend increased unemployment benefits that are currently slated to sunset at the end of July.

“They don’t see the market crashing, they see a better-than-expected jobs report last month, and so their focus is very much targeted [around a] back-to-work narrative,” said Ben Koltun, a senior research analyst at Washington’s Beacon Policy Advisors, in an interview with The Hill. “If there’s a bad jobs report — and when you see more people out of work than last month — then there may be an impetus by more Republicans in the conference to provide broader support and more stimulus spending than they’re talking about right now.”

Despite President Donald Trump’s recent comments suggesting that a “very generous” second round of economic relief payments to Americans might be announced soon, lawmakers said Thursday they remain divided on the path forward.

Democratic Illinois Congressman Jesus Garcia is in favor of another round of relief payments and warned that the pandemic is not ending.

“Without a doubt, we owe it to the American people,” said Garcia. “The high unemployment rates across the country argue for at least one more stimulus check and an extension of unemployment insurance benefits.”

“Our states, our local governments need the support. They’ve lost twenty percent or more of revenue,” added Democratic Congressman Jim Costa of California. “We have spikes increasing in COVID-19 in many states across the country, including California. We need to provide the resources and the support in terms of the stimulus package because we’re not out of the woods yet.”

Unlike the federal government, which borrows freely to finance its operations, states must balance their budgets every year, which typically forces spending cuts in lean times such as now, which both conservative and liberal economists agree is harmful.

There’s a widespread assumption in Congress that state and local aid will be at the center of next month’s proposed COVID-19 rescue bill, along with another $300 billion or so round of $1,200 stimulus checks.

But skeptics of a big state aid package say it would be sufficient, for now, to provide greater flexibility for using the $150 billion state aid installment enacted in March and have states use up their rainy-day funds, which had been filled up with more than $100 billion in cash during good economic times.

Rep. Tim Burchett, (R-Tenn.), called for a safe return to jobs instead of continued extra unemployment bonuses.

“In Gatlinburg Tennessee right now they’re offering a $1,000 signing bonus for servers in restaurants because if you’re getting paid $500 or $600 more a month to stay home, dadgummit, you’re going to stay home, it’s just human nature,” Burchett said. “We’ve got to get away from that, we’re depleting the Treasury at a record pace, trillions of dollars in debit. America needs to get back to work.”

Skeptics of a big state aid package say it would be sufficient, for now, to provide greater flexibility for using the $150 billion state aid installment enacted in March and have states use up their rainy-day funds, which had been filled up with more than $100 billion in cash during good economic times.

However, with a spike of COVID caseloads in states like Texas, Florida, and Arizona, fears are growing of a worse-than-expected second wave and lingering economic destruction to state and local budgets that would be more damaging to the economy and require more federal aid to mitigate the potential loss of 6 million jobs.

The Associated Press contributed to this report.

Latest Stories

Get breaking news, weather, and sports delivered to your smartphone with the WFXR News app available on Apple and Android.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

News tips

Do you have a news tip or breaking news to share with WFXR?  Submit your tip here.

Latest News

More News

News Tip Form

Restaurant Service Guide