TOPLINE
President Trump has told his aides that he supports sending another stimulus payment directly to Americans, the Washington Post reports, even though some officials in his administration aren’t on board—the revelation comes as lawmakers disagree on how to approach the economy in the wake of the coronavirus pandemic.
President Donald Trump speaks with reporters before departing on Marine One on the South Lawn of the … [+] White House, Tuesday, June 23, 2020, in Washington.
ASSOCIATED PRESS
KEY FACTS
According to the Post, which cited three people familiar with the White House’s internal deliberations, Trump believes the payments will help boost the economy, and his chances of reelection in the fall.
Trump’s enthusiasm for the checks is at odds with some GOP leaders who are wary of additional spending that would run up the national deficit, creating what the Post describes as a “rift” among conservatives.
The Post reports that Treasury Secretary Steven Mnuchin has spoken in favor of sending another round of checks, while senior economic advisor Larry Kudlow is opposed to sending out another round as large as the first (when 159 million households received payments).
Senate Majority Leader Mitch McConnell has been one of the strongest voices opposing another round of payments, while many Democratic lawmakers have advocated for even larger payments.
On Monday, after being asked whether the government was planning on sending more checks, Trump responded that another “generous” bipartisan stimulus package is in the works, but he did not speak specifically about direct payments.
Many interpreted his comments to mean that another round of stimulus checks is on the way, but the White House refused to specify whether Trump was referring to checks or more stimulus legislation more broadly.
Key background
The $2.2 trillion CARES Act, signed by President Trump at the end of March, authorized the IRS to send out the first round of checks—$1,200 per person for qualified citizens (those earning less than $75,000 per year), and another $500 sent to families with children under 17. White House officials and Republican negotiators have decided they won’t hold negotiations on the next round of stimulus legislation until after Congress returns from recess at the end of July. May’s better-than-expected jobs numbers may have thrown a wrench in the process, with some lawmakers, including President Trump, taking the surprising good news as a sign that the economy is already on the road to recovery. The $3 trillion Heroes Act—a massive piece of economic rescue legislation proposed by House Democrats last month—includes a provision for another round of checks, though Senate Republicans have said they won’t support the bill.
Tangent
New research from Columbia Business School that the first round of checks likely was the economic lifeline that many struggling households needed during the beginning of the downturn. Researchers R.A. Farrokhnia and Michaela Pagel found that on average, those individuals who received checks spent a third of them at a rapid pace on essentials like food and rent, and then saved the rest. Unlike the direct stimulus payments sent by the government in 2001 and 2008, Farrokhnia and Pagel found that CARES Act checks are generally being used for rent, bills, food and non-durable goods.
Crucial quote
“Given precedence and the amount of the checks, one might have expected larger spending on the likes of automobiles, electronics or appliances that eventually would have a bigger impact on economic recovery,” Professor R.A. Farrokhnia said, “but based on transaction data in our analysis, it’s clear that these checks are sorely needed to help households stay afloat in these very challenging times.”
Further reading
Asked About Possible Second Stimulus Check, Trump Says There Will Be A Second Bipartisan Package (Forbes)
Here’s How Likely You Really Are To Get Another $1,200 Stimulus Check (Forbes)
Democrats Just Released A $3 Trillion Stimulus Wish List, Including Another Round Of $1,200 Checks (Forbes)
Lawmakers Are Bitterly Divided Over How To Get More Stimulus Cash To Americans (Forbes)
