Home » News » A possible extension of unemployment aid and another ‘check’ are removed. That would be “catastrophic”, experts warn | Univision Money News

A possible extension of unemployment aid and another ‘check’ are removed. That would be “catastrophic”, experts warn | Univision Money News

Talks to shape a new stimulus package in Congress will be resumed soon, Senate President Republican Mitch McConnell said after weeks of stagnation to move forward with a new plan to prevent a deeper recession in the US economy. But the new aid is less and less likely to include an extension of the additional unemployment benefit or a new round of ‘checks’ for the country’s households.

Both President Donald Trump and his Treasury Secretary Steven Mnuchin and McConnell himself have so far rejected both possibilities. With such iron resistance it is impossible that the bill put forth by Democrats pass the sieve of the upper house of Republican majority.

Do not put more money in people’s pockets, in the midst of the unprecedented crisis that has unleashed the pandemic of coronavirus, especially in the labor market where almost 40 million workers they lost their jobs, it would cause a economic “disaster” from which it would be difficult to get out quickly, experts say.

Trump seems to bet that gradual reopens across the country will revive the economy. He has even put his chips on a “great” “V-shaped” recovery, as economic jargon describes rapid growth after a recession.

His Treasury secretary has also wanted to leave the ball in the field of companies, advocating for a relaxation of the rules of one of the components of the massive aid package for $ 2.2 billion approved in late March: the call Paycheck Protection Program Seeking that small businesses can rehire or keep their employees while the unemployment rate has soared to 15%.

But, that’s how far his ‘offer’ currently goes.

For Trump and Republican Capitol politicians, extending the additional $ 600 a week in unemployment benefits longer and sending new aid ‘checks’ to taxpayers I would encourage some people to give up looking for a new job. Those additional $ 600 are adding to the amount that each state was already sending regularly.

“This is making it difficult for people to return to work. Yes, we should continue with unemployment benefits (…) but paying people more for not working than for working does not encourage them to resume employment “McConnell said this week as quoted by the media. The Hill.

Money to eat and pay the bills at the end of the month

That premise is contested by Democrats and economists who claim that the problem right now is that the job market has simply collapsed and there are not enough jobs available.

“In this context what makes sense is to help people and companies to get them back on their feet as quickly as possible. What that means is that you have to protect the jobs that already exist and allow people who don’t have jobs to allow I have some money to survive and that the consequences are not so catastrophic “, he considered Andrés Vinelli, vice president of economic policies of the Center for American Progress.

“It makes perfect sense to extend unemployment benefits until the crisis is over (…) What you have to do right now is to extend that help, which is absolutely essential so that people simply have money to eat and pay bills at the end of the month. “, he said in a conversation with Univision Noticias.

Vinelli explains that expanding the aid would have a “multiplier effect” that would boost the economy and it would allow it to get out of the impasse caused by the spread of covid-19 in the country faster.

For example, when a person receives the aid ‘check’ they usually spend it on rent and electricity or buying food. That makes companies sell more and, therefore, that states collect taxes in a kind of domino effect that is ‘awakening’ the economy.

In a new round, he added, undocumented workers must be included taxpayers with a taxpayer identification number, the ITIN Number, and other people – such as college students and seniors – who are listed as dependents on a tax return and were left out of the so-called ‘economic impact payment’.

“It is very important (in a second round) to expand so that it reaches all the people who need it (…) A lot of people (like) those who do not have a Social Security number were left out. And are people who need it right now, it is important to fill the holes that were left the first time “he explained.

At the mercy of a virus

It is also key that a new aid package (which would be the fifth in the midst of the pandemic) allocate aid to states and municipalities to prevent the recession from leading them to lay off public employees, from teachers to state office officials.

“There are many things like those that only Congress can do right now and if Congress is distracted the situation is going to be catastrophic“, he claimed.

The specific point of expanding aid to undocumented migrants, as proposed by the Democratic plan that was approved in the House of Representatives, is unthinkable for Senate Republicans. This has been clearly stated by McConnell. “Another round of checks for undocumented immigrants. Can you believe it?” He criticized this week amid the tug-of-war with his fellow Democrats.

Meanwhile, voices continue to add to the call for a new stimulus package. The most important was recently that of the President of the Federal Reserve, Jerome Powell, who recalled that we are facing an unprecedented crisis caused by a virus that is still too unknown and for which there is no vaccine to stop its spread.

“The anticipated rate of recovery in the labor market is clouded by the possibility that many businesses will not survive a long period in which they lost their income,” said the Congressional Budget Office in a report in which he glimpsed an unemployment rate still close to double digits (almost 9%) at the end of this year.

“I think the IRS sent me a ‘check’ with the wrong amount, what can I do?” We answer your questions

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