The American Rescue Plan, the Biden administration’s first major piece of COVID-relief legislation, brought with it a number of measures designed to jumpstart America’s economic recovery. For the most part, the plan has been successful. The IRS has so far distributed over 163 million checks worth up to $1,400, totaling over $384 billion. These payments have helped to increase consumer spending and personal income, with retail sales in the month of March increasing by 9.8 percent. This has helped to reduce recent jobless claims and bump up GDP.
Some research has shown, however, that many Americans are still dependent on stimulus payments for their economic security. A recent Bankrate survey finds that 61 percent of respondents believed that the $1,400 stimulus payments would support them for less than three months, with 21 percent of that group suggesting that the money would not last for even a single month. Over two-thirds of respondents indicated that stimulus checks in general are important for their current financial situation.
The survey also found that only 13 percent of respondents plan to use their stimulus checks towards purchasing non-essential goods. Most respondents indicated that they plan to use their payments for covering essential expenses, including 45 percent who planned to use the money for monthly bill payments, 36 percent who reported plans to use the money for purchasing daily necessities such as food and household supplies, and a further 32 percent who indicated that the money was earmarked for paying down debt.
Other recent surveys have found 4 out of 10 people report income levels that remain lower than their pre-pandemic levels. Additionally, with unemployment still high in many low-wage industries including food service and hospitality, 1 in 3 Americans reported difficulty meeting basic living expenses in recent months.
Reports by both the Economic Security Project and the Tax Policy Center at Urban Institute and the Brookings Institution found that a fourth-round of direct federal stimulus payments would not only support those Americans who rely on stimulus payments, but could also help to lift millions of Americans out of poverty.
The reality that many Americans continue to struggle with the ongoing effects of the pandemic has led to growing calls for a further fourth-round of direct stimulus payments. A number of Democratic lawmakers have called on President Biden to push for such a campaign, and have even suggested that Biden pursue recurring direct federal stimulus payments. Many Americans themselves have also advocated for such future payments, with one online petition calling for monthly $2,000 payments receiving substantial support.
White House press secretary Jen Psaki recently commented on the possibility of a fourth-round of stimulus payments, indicating that such a plan was unlikely. Instead, the Biden administration is focusing its efforts on building support for its two massive spending and tax bills that it argues will support continued economic recovery.
