Even as Americans enter the fourth year of the pandemic, they can expect to receive a significantly smaller Stimulus Check, mostly from state governments. The third stimulus check under the American Rescue Plan Act was the last round of the stimulus check.
Even the Biden administration has stopped making any more efforts to get through another round of stimulus checks. This is more apparent after the midterm elections which saw the ruling Democrats under Biden lose control of the House to the Republicans. While they have managed to regain control of the Senate, the loss has effectively put paid to further chances of stimulus checks, at least for the moment.
Along with the stimulus check, the boosted unemployment stimulus checks, and more significantly, the expanded version of the Child Tax Credit have expired. This effectively put an end to all forms of stimulus programs of the federal government under Biden.
Republicans Stymie Stimulus Checks While Helping The Super Rich Pay Zero Taxes
While the Republicans had effectively stymied all forms of support to the low- and moderate-income groups, the GOP bill, formally entitled the “Death Tax Repeal Act” enabled the super-rich to avoid both income and estate tax on their investment gains.
Under the current loophole-riddled income tax law, even billionaires can pass on unlimited investment gains to their descendants without paying a dollar in income tax. With the Republicans having their way, billionaires like Jeff Bezos can avoid both income tax and estate tax
Efforts by President Biden to pass the sweeping Build Back Better legislation were stalled amid opposition from Democratic Senator Joe Manchin. In a Senate split right down the middle, his vote was sufficient to stall the entire process. The Child Tax Credit stimulus check too was a victim of the maneuverings of Joe Manchin, backed by several powerful lobbies.
Federal Taxes That Are No Longer Active
American households, primarily the low and middle-income ones, received around $817 billion in federal stimulus checks that were sent directly to a bank account or through the US Postal Service since March 2020. The money can be in three major rounds of stimulus checks. The last of the payments were in the spring of 2021.
This $1,400 stimulus check was the most comprehensive of the two. Each round had slightly diverse qualifying parameters, but lawmakers purposefully did not put too many limitations on the stimulus check to send out the money as quickly as possible as millions were on the verge of starvation, homelessness, and tax and loan defaults.
Low and moderate-income Americans generally got the full amount. The value gradually phased out for those earning more. The first round of payments was worth up to $1,200 per person. The second round was worth up to $600 per person, while the third round of payments was worth $1,400 as direct payments.
But the third economic impact payment was way more than the direct stimulus check. Under the American Rescue Plan Act signed by President Biden in March 2021 within weeks of coming to power, they were a slew of measures that covered every aspect of American society. There was a comprehensive plan of support for the health sector, the education sector, and businesses.
A large portion of the payments were directed to local, tribal, and state governments. They had the freedom to spend the amount on local development and support linked to the pandemic. But there were widespread reports of misuse of the funds by the Republican state governments. The Alabama government, for instance, built a prison using $400 million from its allocation of the Rescue Plan.
Along with the stimulus checks, the jobless could look forward to several more months of enhanced pandemic unemployment benefits. It included a $300 boost to their weekly payments. These payments continued up to the first week of September.
The Child Tax Credit stimulus check of 2021, an enhanced version of the regular payments of $2,000 per child, proved to be the most effective of the pandemic measures initiated by the federal government. The enhanced version had payments of up to $3,600 per child. And unlike other years, the payment was sent out as advance in the tax year itself.
Parents received monthly stimulus checks of up to $300 per month per child depending on the age of the child. Further, for the first time, children up to the age of eighteen received the stimulus check. Earlier the payments were up to the age of seventeen.
In addition to providing supplemental weekly payments, Congress had expanded jobless benefits to gig workers, freelancers, independent contractors, and a varied set of deserving recipients.
State Stimulus Checks Make Limited Difference In Absence Of Federal Support
The journey from the total shutdown in the first half of 2020 to the economic boom of 2021 was amazing but for millions of Americans, nothing much had changed. Unemployment was quite high at that point and businesses needed more time and support to revert to the pre-pandemic pace of growth.
Further, the service industry remained in a bad shape, especially the tourism and transport sector. And the aftereffects of the economic downturn began to be felt in the form of rising prices. What began as a crawling rise in the last quarter of 2021 soon developed into a full-blown pandemic of rising prices.
Inflation touched a record high right from the first quarter of 2022 and by the end of June 2022 was above the 9% mark, ending the month at 9.1%. This was a first in over 4 decades.
The rise in prices of products and services covers every sector. From gasoline to groceries, many products and services went out of the reach of low and moderate-income Americans.
The state stimulus checks, though, were limited to less than half the states, with 21 being the final count of states that gave some form of support to residents.
New Mexico and Maine were some of the states that sent out early stimulus checks. Other major states include Alaska and California. For California, this was the third of the post-pandemic stimulus checks. But this round of payments went out to people who were affected by inflation, especially the rising cost of gasoline. For Alaska, on the other hand, it is an annual affair and is part of the dividend that the Last Frontier state gives to its residents each year from its oil revenues.
