Fourth stimulus check: Are more payments coming?
Multiple stimulus checks have helped Americans survive through COVID. Over 17 months after the economy initially shut down, the pandemic continues, with the Delta variant driving up case numbers among the unvaccinated. The rise comes amidst an improving economic condition and could slow the recovery. Meanwhile, some people are still waiting for their recovery to start. Unemployment continues to surpass pre-pandemic levels, even with job opportunities widely available in certain sectors. The federal unemployment bonus ends on Labor Day, and about half of all states have already ended it (or attempted to). Millions of people remain short of food and behind on bills. A fourth stimulus check could help those in need.
Will There Be a Fourth Stimulus Check From the Government?
Some lawmakers are already starting to push for another stimulus check to help Americans who are struggling to rebuild after COVID-19 and its economic impact. And with a surge in cases and the Delta variant taking hold, will a fourth stimulus check happen for everyone? Hard to say. A lot of people didn’t think we’d see a third stimulus check—and yet here we are.
With the economy and jobs both on the upswing, the need for a stimulus check is way less than it was at the start of the pandemic. And that might mean there won’t be a fourth stimulus check for every American. So don’t go checking your bank account.
What Is a Plus-Up Payment?
A plus-up payment is basically just a bonus amount that you probably should have gotten the first time. The IRS actually owes more money to some people based on their most recent tax returns. If they used your 2019 tax information to dish out your stimulus payment but your 2020 taxes show they underpaid you—you might be in for a plus-up payment based on your income. But remember, this isn’t for everyone—only those who had a change in income or dependents (like having a baby) would qualify for more stimulus money.
How likely is a fourth stimulus check?
Don’t hold your breath, according to Wall Street analysts. “I think it’s unlikely at this time,” Raymond James analyst Ed Mills told CNBC. One reason is that the Biden administration is focused on advancing its infrastructure plan, which would reshape the economy by rebuilding aging schools, roads and airports, as well as investing in projects ranging from affordable housing to broadband.
Delta headwinds?
At the same time, the economic rebound is facing headwinds as the Delta variant spreads through the nation. Some states with low vaccination rates are experiencing a spike in COVID-19 cases that could dissuade people from taking service jobs in restaurants and other jobs that involve exposure to the public.
Texas’ failure to stem the COVID-19 surge in its state has led to nearly 72,000 job losses and an annualized decline in output of more than $13 billion, a recent study found. Fear of contracting COVID-19 is also leading to job losses in Texas as workers opt to stay home or must stay home to care for family members with the illness, the study noted.
Meanwhile, federal pandemic unemployment benefits expired on September 6, marking the end of innovative programs that had extended jobless aid to gig workers, part-time workers and others that typically don’t qualify for unemployment benefits. That could increase hardship for many households, experts say.
“This cliff threatens the economic recovery progress we have made by draining the economy of consumer spending, and will put millions of workers at risk of lasting hardship,” said Century Foundation senior fellow Andrew Stettner in a statement.
Stimulus Update: Why Are States Giving Out a Fourth Stimulus Check?
It all started back when the American Rescue Plan rolled out. States were given $195 billion to help fund their own local economic recovery at the state level.1 But they don’t have forever to spend this money—states have to use it all by the end of 2021, so the clock is ticking here. Some states have given out their own version of a stimulus check to everyone, and others are targeting it at specific groups like teachers. And other states? Well, they haven’t spent any of it yet.
Some states like Colorado, Maryland and New Mexico are giving stimulus checks to people who make less than a certain amount of money or who were on unemployment. So far, California is the only state to give out a broader-sweeping stimulus check. Other states like Florida, Georgia, Michigan, Tennessee and Texas are putting the money toward $1,000 bonuses for teachers.
Still living paycheck to paycheck
Some top economists have called for more direct aid to Americans. More than 150 economists, including former Obama administration economist Jason Furman, signed a letter last year that argued for “recurring direct stimulus payments, lasting until the economy recovers.”
Although the economy is improving, millions of people continue to suffer from reduced income and have not been able to tap government aid programs, Nasif said. Only 4 in 10 jobless workers actually received unemployment aid, according to a March study from economist Eliza Forsythe.
How likely is a fourth stimulus check?
Don’t hold your breath, according to Wall Street analysts. “I think it’s unlikely at this time,” Raymond James analyst Ed Mills told CNBC. One reason is that the Biden administration is focused on advancing its infrastructure plan, which would reshape the economy by rebuilding aging schools, roads and airports, as well as investing in projects ranging from affordable housing to broadband.
The proposal, which the White House says would be funded by boosting the corporate tax rate from 21% to 28%, will likely consume lawmakers this fall, said Stifel’s Brian Gardner in an August 11 research note.
“The fall is shaping up to be a busy time in Washington as Congress tries to finish two infrastructure bills (one which includes tax hikes), approve the annual spending bills, and raise the debt ceiling,” he noted.
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