The effect of the pandemic on the American public has been devastating. Lost jobs, heartbreaking medical expenses, people who lived secured lives suddenly on the brink of poverty. It is an existential threat for both workers and enterprises that has recovered a bit due to the stimulus check.
The American government has put in around $4 trillion, and $2 trillion more has been committed. The money has been spent on direct cash infusion to households and individuals, enhancing unemployment benefits, plus creating more loans and grants to keep the fires burning in many enterprises.
But as the economy gradually takes a turn for the better, questions are being asked if the US government has already overstretched itself with the assistance. And as millions still wait for the benefits, there is a more pertinent question. Did the deserving get the stimulus check?
Even as we speak, the number of small businesses has gone down by 37% since before the pandemic. The low-income workforce is still earning way below their pandemic levels while 7 million people have fallen behind on rent.
A third of the $6 trillion is still to be given out, according to the non-profit that’s tracking the expenditure, the Committee for a Responsible Federal Budget.
The third tranche of the expenditure signed by the President in March has set aside $1.9T for businesses, states, families, and individuals. A large part of it is in stimulus checks that have gone out directly to individuals and families. Then there are the child tax credit advances given out in monthly checks between July and December 2021, and the unemployment benefits that have been expanded to September 6, 2021.
Stimulus Checks For Small Businesses: A Soft Payout Of $1 Trillion, $42 Billion Still To Go
Small businesses were affected the most and many have closed or are on the verge of closure. On a percentage basis, 47.3% of the private workforce in America are employed by small businesses. That comes to a staggering 59.9 million workers.
Under the Paycheck Protection Program, which started in March last year immediately after the start of the pandemic, 11 million advances were disbursed sending around $800B that the administration will mostly forego if part of the amount has been spent on paying salary for staff.
The Economic Injury Disaster Loan program has helped business owners get another $220B. It is a long-term and low-interest loan.
Industry-Specific Stimulus Checks
Two more grant programs have been created by Congress, one for closed theaters, promoters, music venues, and museums, and the other for struggling restaurants. $6B has already been paid to the restaurant industry, $23B more will follow. For the theaters and allied businesses, the government has already sanctioned $26B, and they should be getting it soon.
The Direct Stimulus Payment
Middle and Low-income families and individuals have benefitted through 3 rounds of the stimulus checks, starting from the middle of 2020. The stimulus checks have gone through direct deposit to beneficiary accounts, paper checks delivered by mail, and prepaid debit cards.
The third stimulus check was designed to pay out more to low-income people with the stimulus check amount being gradually phased out after crossing the $75,000 Adjusted Gross Income mark. It has been completely phased out when the individual income is above $80,000. For a married couple filing jointly, the corresponding figures are $150,000 and $160,000.
The initial round of stimulus checks was $1,200 max for individuals and cost the American government $388B. the next round cost $142B and the stimulus checks were worth $600 for each individual.
The third round under President Biden was the highest at up to $1,400 for each individual. Around $274B has been paid out to date and the payments are set to continue till December 2021.
Several states like Maryland and California have proposed giving an additional state stimulus check to supplement the federal payment.
Payments For The Unemployed
Unemployed workers in America have been supported through a three-pronged measure that has given more payments, brought more unemployed workers under the benefits, and continued with the benefits beyond the stipulated period.
The benefits to compensate for job losses and cuts were first introduced in March this year and have seen two extensions since.
The initial support from the federal government was $600 per week for four months. This was above what they got from their state.
The support was extended first in December 2020. It came after a break of a month. The amount was also decreased to $300 per week. $375B has been spent to date and the payments are set to continue till September 6, 2021.
But some states like Florida, South Carolina, Texas, and Iowa have decided to stop the payouts to encourage citizens to return to their jobs.
A second scheme supporting workers affected by the pandemic has cost the authorities $109B to date. Under this program, gig workers, independent contractors, freelancers, and certain other people hit by the economic downturn will be entitled to unemployment benefits.
The Pandemic Emergency Unemployment Compensation program has also increased the period of the payments under the regular state unemployment system. It will cost the federal government another $59B.
The Health Care Bill Comes To $331b
The health care sector has been one of the largest beneficiaries after the pandemic wreaked havoc in 2020. Funds have been earmarked for the development, testing, and use of vaccines, supporting the basic medical infrastructure, and allocating more to Medicaid.
The biggest check of the medical budget will be spent on health care providers and hospitals.
Around $90B of the funds has been set aside for development and getting treatment for COVID-19, and tests.
$34B has gone for extra Medicaid funds for states. It will help people continue to be part of health programs.
But a large part of the fund is yet to reach the recipients.
Spending On Administrative Expenses
Local and state governments have received two series of funding expenses related to COVID-19. The money is being used to pay for teachers, emergency health workers, public sector workers, and small businesses hit by the economic downturn.
Support For The Education System
K-12 schools, both private and public will receive support through the state. $159 has already been sent and will be used to reopen buildings, buy cleaning supplies, and PPEs, and invest in learning systems and technologies to help students continue their education from homes. The funds will help pay for salaries.
Hard-up Homeowners And Renters To Get $58B
Renters struggling to meet their payments will get close to $47B. Though there has been a moratorium to help people avoid being forced out of their homes, rents have piled up. 7 million people were forced to renege on rent payments.
Renters are required to prove loss of income and the risk of turning homeless to get the support.
Childcare To Get $56B
Child care providers have been among the worst affected with a fall in enrollment and mounting costs. The $56B allocated will help them pay for wages, mortgage, and rent, provide financial support to families and pay for utilities.
$52B For Nutrition Support
There has been a marked fall in nutrition intake among families. $44B will go towards providing food stamps. Around 25 million citizens in the low-income category will get a raise this year which they missed out on last year as they were getting the highest benefit according to family size. This increase of around 15% will end this September.
Other support includes the $605M for purchase and distribution of food to food banks, the Pandemic-EBT program to help provide funds in place of the reduced-price or free meals children enjoyed in schools. The amount spent on child nutrition assistance plans has been rather low at $7B.
