Stimulus package 2020: unemployment up for debate

stimulus package 2020 unemployment

Many Americans are watching the news daily for an update on whether there will be another stimulus package in 2020. Specifically, they want to know if there will be a second round of IRS stimulus checks for the general public.


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The possibility of a round 2 of stimulus checks is looking remote, but lawmakers could opt to include other provisions in the next and probably last stimulus package of 2020.

Unemployment goes up for debate

Since the first round of IRS stimulus checks, several lawmakers have proposed sending a second round. The amounts of the proposed checks have varied widely, and some came with strings attached. One of those proposals, the HEROES Act, passed the House of Representatives and now rests with the Senate. The bill is unlikely to come up for debate, but one provision in the bill is coming up for debate in the Senate Finance Committee today.

One of the provisions of the CARES Act, which passed in March and sent the first round of checks to households, was an extra $600 per week in federal unemployment benefits on top of what states pay. That extra $600 per week is currently set to expire at the end of July, but Bloomberg reports that the Senate Finance Committee is scheduled to debate the issue today.

The problem with the extra $600 per week is that many workers were getting paid much more while they were out of work than what they get paid on the job. Thus, lawmakers have been considering ways to incentivize people to get back to work instead of riding out the extra unemployment benefits for as long as possible. If people refuse to go back to work, small businesses won’t be able to get back up and running.

Democrats want to extend the extra $600 per week to January, but Republicans oppose it because so many people are getting paid more on unemployment than they were at work. Additionally, the U.S. economy added 2.5 million jobs in May, which was a huge surprise because economists had been expecting it to continue shedding jobs. Because of the increase, many Republicans believe the economy is already well on its way to recovery.

Why a second round of IRS stimulus checks may be needed

Since lawmakers believe the economy is improving rapidly, it’s unlikely that the next stimulus package of 2020 will include a round 2 of checks from the IRS. However, Bloomberg argues that more stimulus will be needed even after July despite the strides that were made last month.

An opinion piece published by the news outlet pointed out that the job additions were only in eight sectors, which were restaurants, clothing retail, dentists, auto dealers, general retailers, repair and maintenance services, special contractors, and personal and laundry services.

Those sectors cover only 15% of the economy, which meant the other 85% of the economy continued to idle in May. The only way the economy can continue to add jobs is if consumer demand returns, and it won’t until people feel more comfortable going about their usual activities.

According to the Congressional Budget Office, over 75% of the CARES Act’s fiscal impact will come before September. The first four stimulus packages of 2020 are still supporting the economy, and it seems fair to say that the economy would be struggling a lot more if those fiscal impacts weren’t in place.

What else could be in the next stimulus package of 2020

Aside from unemployment, which goes up for debate today in the Senate Finance Committee, the rest of the HEROES Act appears to be dead. Senate Majority Leader Mitch McConnell has set a target of $1 trillion for the next stimulus package of 2020, and the HEROES Act comes with a massive $3 trillion price tag.

The Senate isn’t expected to even debate any more stimulus packages for 2020 until after the recess for the July 4th holiday. That puts the debate in mid-to-late July. There have been reports that the Trump administration is working on its own package of provisions, but for now, it appears that a second round of IRS stimulus checks and additional measures are dead.

If another stimulus package does pass both houses of Congress and President Donald Trump’s desk in 2020, it could include some more creative ways to stimulate the economy. Proposed provisions include a back-to-work bonus for workers returning to the job, a payroll tax cut, and liability protection for businesses.

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