Who is Eligible For The Next Round of Stimulus Checks
The government has called upon Americans to begin paying their taxes by Monday. President Bush signed the bill into law on Sunday night and today’s deadline is fast approaching. According to the Associated Press, the administration hopes to have money sent out by Monday afternoon. In the days ahead, there may be additional problems, as Congress gears up for another government shutdown due to disagreements in negotiations over the budget. Some economists believe the economic impact of the tax measure will be negative.
When President Bush signed the tax measure into law, he claimed that the measure would spur economic recovery. “This historic measure puts America back on the right track to economic growth,” Bush said. “This fiscal policy is bringing America’s economy back to the road to recovery. This fiscal policy is creating new jobs and it is also creating new opportunities for job seekers.” While there’s no doubt that Bush is correct about the positive impact of his tax measure, many congressional Republicans are criticizing the way the money is being distributed.
Many congressional representatives voted for the tax credit package, but they claim that the money is being wasted because there is no money left over for future economic needs. Even worse, many say that there is no money to fund the popular unemployment insurance plan that most members support. Still, some political insiders expect the stimulus plan to be passed quickly through Congress. Meanwhile, consumers will receive stimulus checks to help ease their economic worries. Here are some important facts to consider when the money starts flowing:
How does the stimulus package to pay for itself? The tax cut and reduction kick in immediately, reducing the amount of income earned through payroll taxes. That reduction triggers a reduction in personal and household consumption expenditures. Consumers spend less and save more, which affects the overall economy. When the economy is hit by a recession, such action creates fewer consumer purchases, less employment, and less income and revenue.
How does the stimulus checks pay for itself after the first round? If the economy is bad, the bill’s effects will only last for as long as it takes to reverse those conditions. By the time the first round of cuts takes effect, the unemployment rate should be at its lowest – thereby boosting tax revenues. If unemployment continues to stay high after the first round, additional cuts may need to be made. These additional cuts could total about $25 billion in the first year alone.
Why are stimulus checks only available during the first round of cuts? The legislation requires that Congress approve all economic impact payments before sending the funds to the states. States must disperse the money according to the law. For example, if there is not enough money for drug treatment programs, the state would not receive the funds until it sends out the required grants. According to the bill, the distribution of the money is “sole and exclusive” of any legislative interference.
Even though a lot of us have been discussing the possible impact of the economic stimulus checks on joblessness, few of us have been considering the financial impact of such checks on income. Our checks provide us with a safety net, which allows us to purchase necessities that we might otherwise not have been able to afford. If unemployment continues to remain high – or if economic stimulus payments are discontinued – the stability of our financial situation will be threatened. The availability of government benefits is considered a benefit by most Americans.
So will our checks benefit us in the long run? The Economic Stimulus Check Program has provided us with relief from loss of income, but will they shield us from long-term economic harm? As with any other government spending bill, cutting the checks could lead to increased taxes and higher debt. For this reason, many people say that the second stimulus check will not fully protect our economic interests.