A few weeks ago, it looked like Andrew Cuomo was on track to break a New York curse and get through a third term. But now, embroiled in a Covid scandal, his political future looks less certain.
According to economists, it is critical that the aid comes out quickly to keep the economy alive after the coronavirus hit, as any aid gaps will result in a decline in consumer spending. Spending among low- and middle-income Americans who receive stimulus checks and unemployment benefits is marginally higher than it was before the pandemic, which is big support for the economy, even though 10 million people remain unemployed.
“When people talk about how amazingly strong the rebound from the depths of the first part of the crisis was based on unprecedented support,” said Diane Swonk, chief economist at Grant Thornton.
The start-and-stop nature of unemployment benefits and other benefits is already putting a strain on consumer behavior and dampening the impact on the overall economy, warn Swonk and other economists. When people are unable to expect regular unemployment checks or expect a change in the level of benefits they receive, they spend less.
“It creates uncertainty and insecurity is a tax on the economy,” said Swonk.
Among the stimulus measures that would increase cash for Americans the most, the package would increase child tax credit and allow families to receive that money on a monthly basis, providing up to $ 300 per month per child. But the IRS wouldn’t have to offer these monthly payments until July 1st.
The case for extending the child tax credit as an immediate incentive “is weaker given the timing challenge,” said Garrett Watson of the Tax Foundation, noting that there is also an case for extending the tax credit to reduce child poverty over the long term.
The IRS would also be accused of mailing up to $ 1,400 of new stimulus checks while facing the tax return season tidal wave. Leading companies in the tax industry have already urged lawmakers to ensure that the overloaded agency is not instructed to quickly distribute all economic reviews to the detriment of its core task of collecting taxes.
John Koskinen, who served as the IRS commissioner from 2013 to 2017, said the agency had distributed stimulus checks “amazingly well” last year, despite having been underfunded and understaffed thousands of employees for a decade.
“But there is a limit to the new things you can ask of them without threatening the entire system,” warned Koskinen.
In another big step, the incentive would require the Small Business Administration to launch a $ 25 billion restaurant grant program that the industry has been fighting for since the early months of the pandemic. Since then, about 17 percent of restaurants have closed, according to the National Restaurant Association.
The SBA, faced with unprecedented demands from Congress during the economic and health crisis, failed to fully implement the aid measures under the December economic aid package. The most glaring example is a $ 15 billion closed live venues grant program that has not yet launched and has no official launch date.
Under the incentive, the Federal Communications Commission would also receive $ 7.6 billion to subsidize Wi-Fi hotspots and other devices that help students connect to virtual classes. But the agency would have two months to put rules in place, and likely release that help with only a few weeks left in the school year.
At the state level, officials are already running out of money from the previous incentive.
“We’ve had cities, counties, and municipalities downsizing to pay for Covid expenses,” Kansas State treasurer Lynn Rogers said Thursday during a call from the Invest in America Action advocacy group.
Some states have not even started distributing part of the unemployment benefits granted under the pandemic aid package that went into effect in late December.
Some centrist lawmakers from both parties warned Congress leaders early in the process that the adoption of a massive aid package would create painful delays. Rep. Tom Reed (R-N.Y.), Co-chair of the bipartisan Problem Solvers Caucus, said Congress should peel off funding for vaccines as well as an extension of unemployment benefits and get those parts off as soon as possible.
There is now “a cliff above Congress” and the president’s desire to act, “Reed said.” There should be no reason to delay this unofficial unemployment deadline, which might otherwise be good policy. “
Rebecca Rainey, Zachary Warmbrodt, David Lim, John Hendel, and Marianne LeVine contributed to this report.