- The next stimulus update should come this week, with the Senate expected to vote on President Biden’s $1.9 trillion stimulus bill in a matter of days, following last week’s House vote.
- In the meantime, ignore what you’ve been hearing about $1,400 stimulus checks.
- The real amount of federal aid coming to families in 2021 is much higher, and we’ll explain how it all works.
The next big stimulus update will come as soon as this week when the Senate votes on its own version of President Joe Biden’s $1.9 trillion economic rescue package that was passed by the House of Representatives last week.
According to one estimate of how things will play out this week, Senate Majority Leader Chuck Schumer will tee up Biden’s stimulus plan for a vote around Wednesday. That will kick-start 20 hours of debate, with the actual vote possibly happening in the early morning hours on Friday. Presumably, the Senate version won’t touch the key provision most ordinary Americans are waiting intently on — the $1,400 stimulus checks — so all that would need to happen after the Senate vote is a conference committee session in which the different House and Senate bills are melded together, and then off it goes to President Biden’s desk for his signature. While everyone waits for that to happen, however, it’s important to point out one thing that a lot of people seem to be misunderstanding what’s coming next in terms of coronavirus-related stimulus benefits. Specifically, about the $1,400 stimulus checks — because some of you are actually going to get a lot more than that in stimulus payments by the time 2021 is over.
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Indeed, because of the degree to which the federal government will be providing a massive wave of financial support to millions of Americans this year, Mills thinks the equivalent of a kind of shadow universal basic income (UBI) will have finally materialized in the US as a result. Here’s how.
Mills writes that a family of four with household income below $150,000 already got a stimulus check for $2,400 in January ($600 per person). They’re set to receive another $5,600 ($1,400 per person) following the passage of the current bill from President Biden, which “brings direct stimulus payments to $8,000 for the household.” And that’s just through March.
From there, a new provision in Biden’s $1.9 trillion economic relief plan that increases the child tax credit takes that same family’s stimulus benefits in 2021 even higher.
According to Mills, there’s a child tax credit of $3,600 for children up to age 6 and $3,000 for children ages 6 to 17, which means this new tax credit would provide an extra $6,000 to $7,200 per family — compared to a $2,000 tax credit per child provided by the existing tax code. We noted this all sounds a little like a “shadow” UBI (since, of course, no one is coming out and saying that this is), partly because of the fact that the new child tax credit would be paid in installments each month starting in July.
You can see how the benefits in the stimulus plan add up to an order of magnitude beyond the $1,400 checks that have been getting an outsized share of people’s attention — and we haven’t even yet mentioned some of the other benefits included in the Biden legislation, like extra aid for unemployed workers, plus forbearance of student loan debt and for mortgage and rental relief. According to Mills, for example, jobless benefits vary by state and income level, but they average around $320 a week.
When you add in the extra $400/week made possible thanks to the stimulus legislation, if all that jobless relief was received for a full year, it would equal an annualized salary of $37,440.
“This unprecedented fiscal support is a bit like recapitalizing the US consumer, so the US consumer will largely be in the best financial position they have been in, on average, for at least 40 years (likely ever),” Mills writes. “Logically, this increases the chances of a strong recovery as the economy reopens, and increases the chances of inflation, especially in services, initially, as an excess of demand meets limited supply.”
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