As I write this, Congress is still deadlocked over the next coronavirus relief package.
Should you expect another stimulus check? New unemployment benefits? Anything at all?
As usual, the best way to predict the future is simple: look to the past!
So today, I’ll review the relief package from a few months ago…
And then I’ll break out my crystal ball and look into the future.
The Cares Act
On March 27, 2020, Congress passed the initial stimulus package.
The stated goal of this effort was to save the U.S. economy from the impact of the coronavirus — or at least try to mitigate its damage.
Worth $2.2 trillion, this was the largest-ever peacetime package in history. And because of bipartisan support, negotiations for it were wrapped up quickly.
As President Trump declared, “I want to thank Democrats and Republicans for coming together and putting America first.”
The name of the package was “The Cares Act”…
But given what the package actually included, does it really seem like Congress cared?
Let’s take a look.
Looking Under the Hood
A package worth $2.2 trillion.
At first blush, that sounds like an obscene amount of money.
Surely, there would be plenty of it for all Americans, right? Not so fast…
First of all, let’s subtract the $150 billion that was doled out to government entities like states, municipalities, and various transit authorities.
Then let’s subtract the $130 billion given to hospitals, the $500 billion provided to failing airlines and Wall Street insiders, and the $400 billion granted to small businesses.
What was left after that??
Little Relief for Individuals and Families
To answer the question simply:
One-Time Payment: If you earned $75,000 or less in income, you got a one-time payment of $1,200. And if you earned $99,000 or more, you got nothing.
Keep in mind, that payment came four months ago — so that adds up to just $300 a month.
Unemployment Benefits: Workers received $600 a week for up to four months. But for most people, those four months have now ended. The well has gone dry.
Deferrals: If your mortgage is federally-backed, you were provided with protections against foreclosures, fees, and penalties. And if you have federal student loans, your payments were deferred through September 2020.
But you still owe all that money.
For people struggling with health issues, childcare expenses, existing bills, etc., this measly financial relief just didn’t add up.
In fact, as reported in The Washington Post, the coronavirus could plunge “tens of millions” of U.S. citizens into poverty.
Gov’t to the Rescue?
So there you have it:
An historic package worth $2.2 trillion…
And ordinary Americans got little more than table scraps.
The question now is, what does this mean for the next relief package?
Well, given what you learned today, I think it’s fair to say: not much.
But tomorrow, Wayne will review the main proposals Congress is considering…
And he’ll reveal exactly what they could mean for your financial future.
So stay tuned…