Update on Stimulus Extension Negotiations

Core Financial PartnersBusiness Owners, Individuals

COVID-19 Economic Stimulus in Limbo
This week, some United States residents are seeing an additional stimulus deposit in their bank accounts. No, this is not the second stimulus - which is still under negotiation in Congress. Residents who qualified for the first stimulus payment, but were not required to file a tax return, created an account with a tool that the IRS provided for people in this situation. People who used the tool prior to May 17, 2020 did not receive payments for their qualified dependents due to a programming error. This error was fixed on May 17, 2020. Any qualified individuals who applied prior to May 17 will be receiving a second deposit to correct this error. Those who applied after May 17 should have received the correct amount in the original deposit.

Meanwhile, U.S. residents on a larger scale are eagerly awaiting the Congressional decision on a second stimulus payment and the extension of stimulus programs. As of our last update, Republicans and Democrats were still relatively far from reaching an agreement. The proposed GOP plan would provide an additional $1 trillion, while the proposed Democratic plan would provide an additional $3 trillion. Both parties met again today (August 7, 2020) to attempt to come to an agreement. Unfortunately, an agreement could not be reached by the end of the day and negotiations will extend in the coming week.

While both parties appear to agree on an additional direct stimulus payment of up to $1,200 as well as extending a moratorium on evictions from federally supported housing, they continue to disagree on many topics. These include federal unemployment benefits; school reopenings; the provision of aid to State and Local governments; funds for Covid-19 testing; assistance for food, water, and utility payments; and safe voting during the pandemic.

Despite adding 1.76 million jobs to the U.S. economy in July, unemployment still sits at 10.2% - higher than the 2008 financial crisis. On Thursday, President Trump tweeted that if an agreement is not reached, he has ordered his staff to prepare an Executive Order to address the Payroll Tax Cut, Eviction Protections, Unemployment Extensions, and Student Loan Repayment Options. While it’s not certain how the President will address these issues since Congress controls federal spending, Speaker Pelosi has noted that the President does have the power to extend the eviction moratorium and has implored him to do so.

Congress has delayed their August recess to confront the pandemic. We will provide you with additional updates as they become available.

Wang, Jim; “Did You Get a Second Stimulus Check Today? Here’s Why”; Forbes; August 7, 2020

https://www.forbes.com/sites/jimwang/2020/08/07/did-you-get-a-second-stimulus-check-today-heres-why/#44e1bbeb299e

Pramuk, Jacob; “Democrats Offer to Lower Coronavirus Relief Package Cost by $1trillion as New Talks Begin”; CNBC; August 7, 2020

https://www.cnbc.com/2020/08/07/coronavirus-stimulus-updates-relief-bill-stalls-trump-mulls-executive-order.html

Colby, Clifford; DeNisco Rayome, Alison; “Second Stimulus Check: This is How Soon the IRS Could Send it, After Congress Makes a Deal”; CNET; August 7, 2020

https://www.cnet.com/personal-finance/second-stimulus-check-this-is-how-soon-the-irs-could-send-it-after-congress-makes-a-deal/