Congress will introduce a new stimulus package this week, with extended benefits for Americans who lose their jobs during the Coronavirus Pandemic. Announced by Treasury Secretary Steve Mnuchin during a Fox News interview on Sunday, the new package won’t be as generous as the original stimulus that offered an additional $600 per week federal unemployment benefit.
Speaking during the interview, Mnuchin said that “I think workers and Americans understand the concept that you shouldn’t be paid more to stay home than to work.”
The package looks to be a compromise between differing partisan viewpoints in Congress.
Stimulus Will Cover 70% of Lost Salaries
According to Mnuchin, the package has widespread Republican support and will offer a federal benefit that doesn’t exceed 70% of lost salaries. The original stimulus package will expire at the end of this month.
The package may still include a one-off direct payment to individuals, with as much as $1,200 for workers who earn less than $75,000 per year. The payment will decrease for those earning between $75,000 and $100,000.
Mnuchin is confident that lawmakers from both sides of the political spectrum will agree on a deal soon.
Speaking to Fox, he said that “The bill will be introduced Monday and we’re prepared to act quickly. This is all about kids and jobs.” The Treasury Secretary said that it’s necessary to move quickly so that the government can “deal with the unemployment and all the other issues.”
Economic Stimulus is a Significant Burden on the Federal Budget
The federal government’s response to the Coronavirus Pandemic, including stimulus measures, has been incredibly costly this year. The federal budget deficit in June exceeded $864 billion. The year’s total deficit is expected to exceed $3 trillion with all government spending and stimulus measures taken into account.
The deficit will reach as high as 17.9% of total Gross Domestic Product, a figure that hasn’t been seen since the end of World War II.
Americans need support during the pandemic and it’s reassuring to see that the government is diving deep into its pockets to create stimulus and fund new debt. However, to avoid a prolonged recession, lawmakers and the White House will need to present a solid recovery plan along with whatever support package they pass into law.
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