Second economic stimulus coming? Here’s what may be in it for you
LEXINGTON, Ky. (WKYT) - A second economic stimulus could be on the horizon. Senate Majority Leader Mitch McConnell said this past week that he expects a package to be approved by the end of the month. To talk about what should and shouldn’t be included in that stimulus package is independent fiduciary financial advisory Josh Smith of Strategic Wealth Designers.
Smith says there are several intricacies to providing a second stimulus. “Our numbers for unemployment are improving but they aren’t where we need them to be. It’s likely a second stimulus will be passed but that comes with several pros and cons,” Smith says. “We have to make sure we don’t pass legislation again that incentivizes people not to work.”
In the first $2.2 trillion stimulus package, millions of Americans who were laid off or furloughed were paid more money to not be working because of the $600 bonus payment that was above their normal unemployment salary. The Democratic-controlled House has sent a proposal to the Republican-controlled Senate that would keep this provision intact through the end of 2020. Senate Majority Leader Mitch McConnell called this proposal ‘dead on arrival,’ saying the Senate would not approve a bill that encouraged people to not work the rest of the year. Both the Senate, House and President Trump said a second stimulus is needed but the varying changes to get it approved will be hammered out in the coming weeks.
Smith says getting creative by implementing the proposed back to work bonus would be a much better idea as opposed to overpaying in benefits in a second stimulus.
“We all have talked with people we know who are getting paid more to be at home than when they were at their job,” Smith says. “This has been especially bad for the restaurant, hospitality, and tourism industries, there’s no way people get back to work until the overpayment problem is fixed. Employers aren’t faulting their employees for taking advantage of the money, they just don’t want to report the employees (to the unemployment claims offices) because it could sever the relationship of their employees coming back to work for them.”
As the coronavirus headlines continue to dominate in the United States, other countries have cautiously tamped down their case numbers as life has resumed. When asked about people simply not following guidelines Smith says it’s a very difficult thing to mandate.
“People are packing into Walmart’s and grocery stores, millions of items are getting touched and passed inside stores like that and it’s nearly impossible to police proper distancing in there,” Smith says. “Couple that with people back in restaurants and itching to travel to vacation destinations, it’s good that the mortality rate is low but it’s very difficult to envision a scenario where the case number decreases anytime soon. From a financial standpoint, it’s a financial boon for some companies and total devastation for others.”
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