Here's why a second round of stimulus checks aren’t in any of the most recent proposals

·Reporter
·4 min read

Democrats, Republicans, and the White House all supported a second round of stimulus checks in earlier talks on a relief deal. But the popular provision is missing from the most recent proposals lawmakers are negotiating.

The reasons? Politics and money, according to experts.

Stalled since before the election, negotiations resumed this week after a bipartisan group of lawmakers on Tuesday introduced a $908 billion bipartisan proposal — one without stimulus checks. Democratic leaders House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) backed the proposal, even though their previous offers included direct payments to Americans.

WASHINGTON, DC - APRIL 29: U.S. President Donald Trump's name appears on the coronavirus economic assistance checks that were sent to citizens across the country April 29, 2020 in Washington, DC. The initial 88 million payments totaling nearly $158 billion were sent by the Treasury Department last week as most of the country remains under stay-at-home orders due to the COVID-19 pandemic. (Photo by Chip Somodevilla/Getty Images)
U.S. President Donald Trump's name appears on the coronavirus economic assistance checks that were sent to citizens across the country April 29, 2020 in Washington, DC. (Photo by Chip Somodevilla/Getty Images)

“They made a determination of how high they could go with the possibility that they could build enough support in the Senate to avoid a filibuster to get a package through,” Norman Ornstein, a scholar at the American Enterprise Institute, told Yahoo Money. “The $908 billion is where they came out.”

Also on Tuesday, Senate Majority Leader Mitch McConnell (R-KY) circulated his own proposal, worth less than $500 billion, that excluded checks. McConnell’s previous two offers also didn’t include them — but his $1 trillion proposal in July did — even though the president supported the provision when Treasury Secretary Steven Mnuchin led talks before the election.

“McConnell basically wants to do the most narrow and stripped-down package that he possibly can,” Ornstein said.

‘Less of a motivating force’

While the White House pushed for a second round of stimulus checks before the election, the political motivation for that support has since faded.

“The idea of sending people a check just before the election [...] there was a real premium on that,” Dean Baker, chief economist at the Center for Economic and Policy Research, told Yahoo Money. “Now, that’s less of a motivating force.”

Speaker of the House Nancy Pelosi (D-CA) and Senate Majority Leader Mitch McConnell (R-KY) arrive to watch the casket with the remains of Rep. John Lewis (D-GA) being carried from the U.S. Capitol building, in Washington, U.S., July 29, 2020. Brendan Smialowski/Pool via REUTERS
Speaker of the House Nancy Pelosi (D-CA) and Senate Majority Leader Mitch McConnell (R-KY) arrive to watch the casket with the remains of Rep. John Lewis (D-GA) being carried from the U.S. Capitol building, in Washington, U.S., July 29, 2020. Brendan Smialowski/Pool via REUTERS

Before the election, President Donald Trump supported a second round of stimulus checks and encouraged an even higher price tag for the stimulus deal than the Democrats’ $2.2 trillion proposal. But in the latest phase of the negotiations, Trump has so far only said that he’ll sign McConnell’s proposal that doesn’t include them.

“Donald Trump, and the Trump administration were very eager before the election to do something that might help Trump and make him look good,” Ornstein said. “Now, [they] don't care. They're perfectly happy if they leave a scorched earth for Joe Biden.”

Most people actually aren't hurting’

Despite the recent slowdown in the economic recovery, many indicators of financial health have recovered since April, including the unemployment rate, GDP, and consumer spending, among others. That is another reason why stimulus checks are less popular now among lawmakers.

“Most people actually aren't hurting right now. That doesn't minimize at all the fact that a lot of people are hurting really, really bad,” Baker said. But “if you're talking about a limited pot of money, it doesn't make sense to give $1,200 to a lot of people who are basically doing just fine.”

Under the CARES Act, around 160 million Americans received a stimulus payment of up to $1,200 — plus $500 for any child dependent — amounting to over $270 billion out of the $2.2 trillion relief package passed in March.

Both the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) programs are set to expire on December 26 unless Congress reaches a stimulus deal.
Both the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) programs are set to expire on December 26 unless Congress reaches a stimulus deal.

While not as targeted as unemployment benefits, direct payments to Americans is popular among economists, because it’s a fast way to get money to people. In November, 127 economists urged Congress to send Americans a second round, noting they are “one of the quickest, most equitable, and most effective ways to get families and the economy back on track,” according to the letter they sent.

But with limited funding, dedicating money to programs like the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) — both of which are currently a lifeline for 12 million jobless Americans and are set to expire on Dec. 26 — may be more urgent, Baker said.

“These programs end,” he said, “and that’s a really big deal for a lot of people.”

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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.

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