More Plans in the Works for the Stimulus Round 2

Stimulus round 2 could soon be here. A second round of Covid-19 stimulus checks is in the works to help you as the economy struggles to recover. The cash benefits that stimulus check 2 contains are still unclear. But politicians realize that folks need more money to help them cope with unemployment, mounting debt, housing payments, and groceries. 

The majority of Americans have received their first stimulus check. In the first round, most folks got a federal check for $1,200 as part of the CARES coronavirus stimulus package. Other provisions in previous stimulus packages included extra cash for jobless people, eviction moratoriums, and debt relief. Now, many of those benefits are about to end. 

But if you’re still out of work, facing mounting debt, and struggling to find next month’s rent, you realize that more is needed. Stimulus round 2 could throw you the financial lifeline you desperately need.

The Country Recovering from the Coronavirus Pandemic Impact

The outbreak of Covid-19 ripped through the economy like a violent tornado. Lockdown orders forced many businesses to close. We all had to hunker down at home to protect ourselves from catching the virus. The result of the pandemic was that millions became unemployed. So, the future looked bleak — unless the government approved stimulus packages.

In March, the CARES act helped folks weather the storm and start to pick up the pieces. At the time, a $2 trillion cash injection helped to revive the economy somewhat. The first round of stimulus packages included the following help:

  • Most taxpayers received a Covid-19 stimulus check for $1,200.
  • Jobless folks receiving welfare got a $600 boost.
  • For the first time, gig workers and the self-employed could claim unemployment insurance.
  • A Suspension of student loan payments through September 2020.

But three months after the CARES Act started dishing out cash, the country officially went into recession. However, news reports indicate that the recession is different from previous ones. Unlike the Great Recession in 2008, a medical crisis — not a financial crisis — was the cause. 

Stimulus Round 2

What stimulus plans are the works to help you cope with the devastating impact of Covid-19? How much cash could you get from stimulus round 2? Let’s look at some of the benefits that could make up part of the second Covid-19 package that the government will soon debate.

The HEROES Act —Second Coronavirus Stimulus Timeline

The House of Representatives approved the HEROES Act on May 15. The Bill aimed at extending the provisions in the CARES Act to help boost the economy until early 2021. However, the Senate has to debate the Act, and no one is sure if Senators will approve the Bill in its present form. 

The timeline for a second round of stimulus payments starts on July 20, when the Senate returns to work. What does the HEROES Act include? Here are some of the key points covered in the HEROES Act:

  • A one-time stimulus payment of $1,200 for most taxpayers.
  • Unemployed gig workers and self-employed folks can continue receiving welfare through March 2021.
  • Anyone claiming welfare will continue to get the additional $600 on top of regular unemployment benefits. 
  • Frontline workers would get hazard pay of an additional $13 per hour. 

Many reports indicate that it’s unlikely that the Senate will pass all of the provisions in the HEROES Act. But that doesn’t mean that a second round of stimulus payments aren’t on their way. 

Stimulus Round 2 — Extend unemployment benefits

A vital part of the HEROES Act is the proposal to extend unemployment benefits. Until July 25, everyone in the U.S. claiming welfare gets an additional stimulus payment of $600. But if you’re eking out a living on benefits, losing that amount of money will make a massive dent in your finances.

One proposal that the Senate may discuss is to keep the $600 top-up welfare payment under certain conditions. For example, receiving the $600 a week in unemployment benefit could depend on the state’s level of unemployment. So, the extra cash could remain at $600 while the state average unemployment level is above 11%. When it falls below that threshold, the welfare benefits will decrease by $100 as the three-month average gradually drops.

A second round of stimulus checks

Another sticking point of stimulus round 2 is the possibility of a second stimulus check. Although the HEROES act proposes $1,200 for all taxpayers, other politicians have suggested different amounts. Proposals range from an ambitious $2,000 a month in stimulus payments to a one-off payment of a few hundred dollars. 

Some politicians don’t like the idea of everyone getting a stimulus check because people get them whether they need the cash or not. One approach would be that, to qualify, your earnings would have to be $40,000 a year or less.

However, only when the Senate starts to debate the second stimulus round will we have a clearer idea of what’s on offer. 

Stimulus bonus to return to work

Not all politicians are happy to approve extending the $600 additional payment in unemployment benefits. On the one hand, it’s not an incentive to look for work if you will fall off the welfare cliff. In other words, you’d be worse off going back to work than getting a welfare check.

Rather than pay people to stay unemployed, one proposal would be to give a $450 weekly bonus as an incentive to go back to work. If Senators approve the payments in the talks for stimulus round 2, it will apply to jobless folks and furloughed workers.

Extend relief for student loans

Under the CARES Act, forbearance for repaying student loans gave people extra cash during the coronavirus pandemic. The three main provisions for student loan relief include:

  • No interest on federal student loans.
  • No federal student loan payments. 
  • No student loan debt collection.

Before the Senate started debating stimulus round 2, many politicians put forth proposals on what to do about student loans. Forbes reported that these proposals range from canceling all student loans to a tune of $1.6 trillion to the HEROES Act that would cancel $10,000 of each student loan’s debt. 

Unfortunately, it seems that any student loan forgiveness is not in the works for the second round of stimulus payments.

Stimulus Round 2 — Timeline

Debating what to include in stimulus round 2 starts on July 20 when the Senate returns from recess. From then, the Senate has 15 days until August 7 to hammer out a stimulus plan. If that doesn’t work, we’ll have to wait until September 8 when the Senate returns after its August recess. 

If the Senate passes stimulus round 2 in July, the Bill would have to be approved by August 7. If not, the earliest we may see any stimulus check is sometime in September.

It’s clear that the majority of Americans can look forward to more stimulus payments. However, no one really knows how much they will receive or when.