Will the Second COVID-19 Stimulus Check Eligibility Change?

The prospect of a second round of stimulus checks has been a topic of much discussion, especially in light of the upcoming 2020 U.S. elections and the likelihood of a Republican-controlled Senate post-election. As of today, November 23, 2020, no second stimulus check has been officially announced.

Given the recent political developments, it seems that Congress is unlikely to approve any further stimulus payments. Despite earlier statements suggesting a potential second payment, it is highly probable that Mitch McConnell, the Senate Majority Leader, will oppose any such measure. McConnell, often referred to as 'The Mouse,' has historically been skeptical of large government payments, viewing them as a potential disincentive for work and economic activity.

Obstacles to Future Stimulus Check Eligibility

Republican opposition to additional stimulus payments is rooted in several key concerns:

Economic Inactivity Fears: Republicans are wary of the impact of additional payments on the U.S. economy, believing that large sums of money could lead to complacency and reduced work ethic. They fear that, once more money is flowing, Americans might become overly dependent on government payments and less willing to seek employment. Unemployment Insurance Concerns: There were earlier debates about extending unemployment insurance benefits, with critics arguing that temporary extra payments might prolong the period during which individuals could receive support, potentially hindering their ability to return to the workforce. Economic Theories: Many Republican officials adhere to supply-side economics, where the premise is that lower taxes and limited government intervention can stimulate the economy. They believe that individual payments of $1,200, as seen in the first round, are not enough to significantly impact long-term economic recovery.

It's important to note that these Republican voices do not reflect a unified stance among all economists. Much of the criticism of stimulus payments can be attributed to the ideological underpinnings of supply-side economics rather than genuine understanding of economic theory and its empirical evidence.

Future Discussions on Stimulus

Despite the current opposition, discussions on the next round of stimulus are ongoing. Top Republican officials, including Steve Mnuchin, Deputy Secretary of the Treasury, and Kevin Hassett, Chairman of the Council of Economic Advisers, are set to continue these discussions in the coming weeks. These talks aim to address the economic challenges that remain and to propose new measures if necessary.

While the timeline for any potential stimulus package remains uncertain, the recent actions by the Small Business Administration (SBA) provide a useful comparison. When Wall Street and large banks took advantage of the SBA's small business assistance program, leading to premature funding exhaustion, it was not due to any delays in the disbursement process. Instead, it was a result of the unimaginably vast financial resources available to these groups. Despite this, the SBA has now reduced the loan amount per company to $200,000, significantly lower than the original $2 million per loan.

These actions highlight a contrast between the treatment of small businesses and those of large corporations and financial institutions. The streamlined process for hedge funds and large companies underscores the disparity in how economic aid is distributed, often favoring the rich and well-connected.

Conclusion

Given the current political climate and the historical stance of Republican leaders, there is little expectation of a second stimulus check in the immediate future. However, the ongoing discussions among high-level officials suggest that the conversation is far from over. The coming weeks will reveal whether any new measures will be put in place to address shortfalls in economic recovery.

The ongoing debate around stimulus checks reveals a larger issue of economic inequality and the effectiveness of various economic policies. While Republicans are wary of extended payments, the necessity of such measures is a point of contention even for those who support them. The upcoming elections and the resulting political control of key positions will play a significant role in determining the future of economic relief in America.