Unless you have been living under a rock, you know that times are a changin’. Last month, or March 2020 for those of you in the future, President Donald Trump signed into law the historic, bipartisan CARES Act. According to the U.S. Department of Treasury, “The CARES Act provides fast and direct economic assistance for American workers and families, small businesses, and preserves jobs for American industries.”
Within this law, over $2T of Coronavirus economic relief funds were distributed among American households. Some statistics show that 9 out of 10 households received the government stimulus.
In order to receive this money, there were strict qualifications:
• Single adults with Social Security numbers who have an adjusted gross income of $75,000 or less will get the full allotment of $1,200 each.
• Married couples with no children earning $150,000 or less will receive a total of $2,400.
• Taxpayers filing as head of household will get the full payment if they earned $112,500 or less.
• Each child qualifies for $500, given to their parent or guardian.
• The payment decreases until it stops altogether for single people earning $99,000 or married people who have no children and earn $198,000. According to the Senate Finance Committee, a family with two children will no longer be eligible for any payments if its income surpassed $218,000.
• You can’t get a payment if someone claims you as a dependent, even if you’re an adult. In any given family and in most instances, everyone must have a valid Social Security number in order to be eligible.
The eligibility of Americans to quality for the CARES Act was determined by their 2019 income. If 2019’s taxes were not prepared, the IRS used 2018 tax returns.
While the general consensus was positive towards The CARES Act, the majority of Americans have said that it simply isn’t enough stimulus.
It may shock you, but $1,200 as a single adult and $2,400 as a married couple doesn’t go that far in today’s world. Even if you are able to add children to your ‘payout’, this allotment of money doesn’t cover most people’s expenses.
The unemployment rate is projected to hit between 32% to 34% when this is all said and done. Americans are being laid off and furloughed rapidly.
This means that, on the week ending March 28th, 2020, 6.64M Americans were reliant on individual states’ unemployment benefits and no longer had health care during a global pandemic. According to data, that number is only going to rise for the foreseeable future.
Now that The CARES Act has been implemented, some in congress are calling for further financial aid to struggling Americans. This is where the Emergency for the People Act comes in.
The proposed legislation is quite different from The CARES Act. It is more inclusive and considers putting more cash in the pockets of people who have been further affected by the COVID-19 pandemic:
• Eligible Americas would receive $2,000 per month for up to six months.
These payments would continue until the unemployment rate ratio for people ages 16-60 is greater than 60% for up to six additional months.
• The $2,000 would not count as income.
Therefore, lower income households still qualify for local, state and federal assistance programs like SNAP, etc.
• Americans age 16 and older making less than $130,000 annually quality.
• It does not matter if your parents claim you as a dependent.
• Married couples earning less than $260,000 would receive at least $4,000 per month
• Americans would receive 5% less for each $1,000 they made above the threshold amounts of $130,000 for individuals and $260,000 for married couples filing jointly.
• Qualifying families would receive $500 per child — capped at 3 children.
• If you are unemployed or have $0 earnings, you are still eligible.
•College students and adults with disabilities who are still claimed as dependents are eligible.
• Instead of more financially stable people hoarding money, they’d actually spend it out in the local economy because of a consistent income.
• Continuous money would actually jumpstart the economy for a prolonged period of time, instead of a week long period.
• Small businesses would be less likely to die off due to COVID-19.
• People wouldn’t be homeless/kicked out because they can’t pay rent.
• People could afford a doctor if they got sick (even if they didn’t have health coverage due to unemployment).
I don’t want to get political but these are some important questions to ask yourself and have a healthy discussion about.
• What are the long term affects of the crisis?
• Where is this money magically appearing from?
• If we keep giving money it will destroy the value of the dollar
• What is the long-term plan here?
• Are people going to be working there butt off to find a new job or coasting off the money hoping we stay below the 60%?
• Unless rent-control and similar measures are implemented as well, unethical landlords could exploit people for this newfound cashflow
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• Budget Templates: Excel budget templates with pre-populated categories and formulas to keep you on track with hitting your financial goals.
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