There is a little doubt that the American public will not soon forget 2020. The coronavirus disease 2019 (COVID-19) has left an indelible mark on society. Thus, the nonessential shutdowns cost more than 20 million Americans their jobs. Additionally, the United States’ death toll is rising beyond 125,000. It was this unprecedented financial and physical shock that made Congress pass, and President Trump sign the CARES (Coronavirus Aid, Relief, and Economic Security) act on March 27.
The Cares ACT, at $2.2 trillion, is the costliest piece of relief legislation ever signed into law. Without getting into the minutiae, it provided close to $350 billion for small business loans and $500 billion to distressed industries. Moreover, it allocated $260 billion for the expansion of the unemployment benefits program and gave $100 billion to help hospitals fight the coronavirus.
Nevertheless, what the vast majority of Americans will remember concerning the CARES Act is whether they received a direct stimulus payment following its passage. That is because the Act apportioned $300 billion in stimulus money for senior citizens and American workers. Some 159 million Economic Impact Payments had been sent out by the Internal Revenue Services. It totaled $267 billion, through the first week of June.
Unfortunately, throwing a lot of money at the problem is not the sure-fire solution that Washington, D.C., was hoping for. An additional round of funding was needed for supporting small businesses. Moreover, pressure has been mounting on lawmakers to come together to pass the second round of stimulus. The intention is for the American public to receive more cash in hand.
The CARES Act
Another round of the stimulus may answer that question. And it will be approved before July ends.
The most apparent reason for the second round of stimulus is that the CARES Act did not go far enough from an individual standpoint. Nevertheless, the Act helped to bail out troubled industries, for example, airlines. Meanwhile, Money/Morning Consult poll from April found that a whopping 74% of respondents expected to spend their stimulus money in four weeks or less. The Economic Impact Payments received very much needed. Nevertheless, it did not cover one month’s worth of expenses for recipients.
There is also the imminent end of enhanced unemployment benefits. That is another reason the second round of direct stimulus must come.
As mentioned, the Act allocated $260 billion to expand the unemployment program. This was to develop the program in four months (April through July). The expansion allowed for plus $600 a week in payments to approved unemployed beneficiaries. That extra $600 a week has been the difference between not being to put food on the table or keep a roof over their heads and making ends meet, for some unemployed Americans.
There is a chance that unemployment benefits will expire at the end of this month. This will be a large part of the reason that we will see a surge in the number of autos, mortgage, and rental loan delinquencies beginning in August or September.
