Fourth stimulus check has new friends in high places

Joe Biden, Jan. 7, 2020.
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More lawmakers are pushing President Biden to agree to more stimulus checks.

Letters urging President Joe Biden to support additional direct payments have now been signed by more than 80 lawmakers in Congress. The latest are seven members of the influential House Ways and Means Committee.

Often referred to as the panel that controls the federal government’s purse strings, Ways and Means takes a lead role over taxation and government budgeting. But it was concern over household budgets that prompted the committee members to pen a letter to Biden in recent days.

"Families and workers shouldn’t have to worry about whether they’ll have enough money to pay for essentials in the months ahead as the country continues to fight a global pandemic and recession," the letter says.

The lawmakers say most people have been spending their relief checks on basics including food, utilities, rent and mortgage payments.

While some have famously used their "stimmies" to invest in the white-hot stock market, there's evidence others may have spent their money on nonessential, but necessary, things including affordable life insurance. Sales of those policies have surged during the pandemic.

Stimulus check proposals draw signatures — and criticism

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Lawmakers say stimulus checks have largely been spent on essential expenses.

"A fourth and fifth check could keep an additional 12 million out of poverty," the Ways and Means Committee members argue. The letter doesn't suggest a dollar amount for those payments, but other members of Congress have pitched $2,000 monthly checks for the duration of the pandemic.

Meanwhile, more than 2.2 million citizens have signed a Change.org petition asking Congress to provide payments of $2,000 for adults and $1,000 payment for kids right now — followed by regular checks for the rest of the crisis.

Critics opposed to another round of stimulus checks have raised questions about the cost and the need.

This year's $1,400 direct payments cost the government more than $420 billion, according to the Committee for a Responsible Federal Government.

And reporting Monday by the Boston Herald could provide new fuel for opponents who say additional direct aid money isn't really necessary.

The Herald says it has obtained IRS records showing that close to 1.25 million stimulus checks from the very first round — issued in the spring of last year, during the height of the crisis — have gone unspent. The report calls the number "staggering."

So, will there be more checks?

Though scores of lawmakers are now pressing the president to back further direct payments, his press secretary says that's a matter for Congress to decide. And, Congress is the biggest obstacle standing in the way of more relief money.

The last COVID rescue bill won passage via a budget loophole, not negotiation. Given that Biden's Democrats control both houses of Congress by whisper-thin margins, they'd have to use the same device to push more checks through.

So far, House Speaker Nancy Pelosi and other congressional leaders haven't voiced any support for a new round of direct payments. Their focus right now is on passing Biden's packages to fund infrastructure projects and help families.

But billionaire bond investor Jeffrey Gundlach thinks you can probably count on seeing more stimulus checks. Though Gundlach is no fan of what he calls "government giveaways," he says additional payments may be inevitable — because Americans have come to rely on them.

"People's behavior is going to, is already, I think, partly modified to kind of factor in ongoing government assistance," Gundlach tells Yahoo Finance. "And the government doesn't seem to be discouraging them from thinking that it's going to be here for a long time."

For now, you'll have to create your own stimulus

Young affectionate couple at home checking expensive bills, they are calculating balance and costs
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Find savings to essentially create your own stimulus check while you wait for Washington.

While you’re waiting for a definitive answer from Washington on a fourth — and fifth — check, you have several ways to give your finances a boost on your own.

  • Rein in your debt. Credit cards may be a life saver when times are tough, but the high interest costs can squeeze your cash flow in the long-term. Pay off your debts more quickly and affordably by rolling your balances into a lower-interest debt consolidation loan.

  • Get on the refinance gravy train. If you haven't refinanced your mortgage in the last year, you could be missing out on serious savings. Mortgage data and technology provider Black Knight recently said 13 million homeowners could still save an average $283 a month with a refi.

  • Slash your insurance costs. With prices of food and gasoline on the rise, now's the time to reduce the costs you can control, like car insurance. Do some quick comparison shopping to see if you can find yourself a better deal on your coverage. The same strategy could help you save hundreds on homeowners insurance, too.

  • Find new ways to save. Cancel streaming services and any other monthly subscriptions you're not using. Resist the urge to order dinner deliveries, plan out home cooked meals, and go to the grocery store with a list you'll stick to. When you’re shopping online, use a free browser add-on to automatically hunt for better prices and coupons.

  • Grow your pocket change in the stock market. You don't need another stimulus check to get in on today’s record-breaking stock market action. A popular app lets you grow a diversified portfolio using nothing more than "spare change" from your everyday spending.

About the Author

Clayton Jarvis

Clayton Jarvis

Reporter

Clayton Jarvis is a mortgage reporter at MoneyWise. Prior to joining the MoneyWise team, Clay wrote for and edited a variety of real estate publications, including Canadian Real Estate Wealth, Real Estate Professional, Mortgage Broker News, Canadian Mortgage Professional, and Mortgage Professional America.

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