COVID-19 cases have been rising fast across the U.S. in recent weeks. This resurgence is creating hard questions about just how quickly a reopening of the economy should occur and whether it may need to be put back on hold.
Senate Majority Leader Mitch McConnell recently weighed in on his thoughts about the potential for a second stimulus check going out to those affected by saying that one could included in a new economic relief package. He also noted some much tighter parameters for who might qualify for those checks.
No doubt this will lead many to ask the question: “Will I be getting more relief money?” Based on McConnell’s comments, if you’re in a higher income bracket, the answer is likely “no.”
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The White House wants it done soon
Comments from White House officials suggest that Sen. McConnell’s ideas are in line with their expectations. Treasury Secretary Steven Mnuchin said this week that the Trump Administration supports another round of stimulus checks, but didn’t provide specifics on how much they should be or who would qualify for them. He also said that the administration supports extensions of the extra unemployment benefits that have been in place this year, but again without providing specifics.
Mnuchin also said that White House officials are working with Republican Senators and staff to put together a “much, much more targeted” attempt at providing forgivable loans to small businesses. Mnuchin said the goal is a bipartisan bill passed by the end of July.
McConnell did provide some hints regarding his thoughts on a stimulus. He explained that any direct stimulus would be focused toward those who took the biggest hit from the pandemic and subsequent shutdown. This includes those with annual incomes below $40,000 who had lost their jobs. He also made mention of financial relief efforts being more focused on those in the hospitality industry. This echoes comments from Mnuchin that a more concentrated and focused approach is desired for a second economic package. He said any stimulus should target sectors and workers that have faced the most hardship.
McConnell’s parameters for a second check significantly lower the maximum annual salary compared to the previous salary qualification of $75,000 a year to receive the full $1,200 check that was part of the Coronavirus Aid, Relief, and Economic Security (CARES) act.
These ideas are also in contrast with the HEROES Act that the Democrats pushed through the House of Representatives in May. That bill calls for trillions more in broad stimulus spending, with more direct money for those who can claim dependents.
The devil is in the details
When you look at the rising rate of COVID-19 cases in the U.S., it’s clear the economic reopening of the country did not go as planned. The difficulty that puts on certain industries and areas of the workforce makes continued and additional financial relief tough to avoid if we want to keep this recession as short and minimally painful as possible. Both political parties seem poised and ready to provide some further stimulus, but the devil is in the details and they are far apart on how much it should be and who should receive it.
I do stand by my previous stance that any further aid passed by Congress will not be as broad in scope as the CARES Act, but it’s clear that the enhanced unemployment benefits, and direct payments of some form, are on the table. Based on word coming from the Trump Administration and the Senate, that aid will be aimed at helping strategic areas of the economy, rather than a broader capital injection.
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