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Tuesday, February 7, 2023

Federal Government Discounts A Fourth Stimulus Check In 2023: A Fractured Congress Ensures That Americans Have To Look Elsewhere For Inflation Relief

A new Congress was sworn in on Tuesday as both incumbents and newly elected Congress members took their oaths in office. The Republicans have taken over control of the House of Representatives, though the Democrats have managed to retain control of the Senate. And that leaves President Biden without the full support of the legislature in his bid for a fourth stimulus check.

The question uppermost in the minds of millions of citizens is whether the new Congress will back President Biden’s efforts for more federal support. One of Joe Biden’s agendas that were close to his heart was the continuance of the expanded Child Tax Credit stimulus check through 2025.

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Republican intransigence and betrayal by a couple of Democratic Senators foiled his bit to extend the 2021 Child Tax Credit through 2025. The payments ended abruptly in December 2021. The amount had been expanded from $2,000 to between $3,000 and $3,600 a year depending on the age of the child. Children aged below six years received the higher amount while for children aged between 6 and 17, it comes to $3,000.

Stimulus Checks Enjoyed Bipartisan Backing In The 117th Congress

Even as the 118th United States Congress began on January 3, 2023, the total Democratic Party control over both the House of Representatives and the Senate ended. While the Senate was equally split down the middle with 50 Senators each, the Democratic Managed to retain control over the upper house thanks to the tie-breaking vote of the Vice President of the United States, Kamala Harris.

The ruling Democrats thus managed to retain control over the Senate due to Kamala Harris’s constitutional role as the President of the Senate.

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Both parties were behind the initial rounds of the stimulus checks. On a rare occasion, both the Republicans and Democrats voted together for the first and the second stimulus checks in 2020. It was during the peak period of the pandemic and the recession that followed immediately after.

But the consensus disappeared after Trump was ousted by Joe Biden though not before he permanently damaged the consensus that prevailed between the two parties when it concerned the pandemic.

When President Biden signed the American Rescue Plan Act shortly after assuming office, the Democrat legislators were the only ones behind the bill.

The Rescue Plan led to the third stimulus check and a host of other support measures that included the expanded Child Tax Credit payments. At that time, the Democrats controlled the House and had the Vice President to see them through the Senate, which was tied fifty each in the first two years of President Biden’s presidency.

Losing Control Of House Dims Chances Of A Fourth Stimulus Check

And with the ruling Democrats losing this unified hold of Congress after the Republicans took over control of the House of Representatives in the 118th Congress, the chances of another round of federal stimulus check appears dim.

It appears very unlikely that the Republicans in the lower house would support anything that has to do with another stimulus check, including backing a bill to extend the expanded Child Tax Credit stimulus check, a proposal that is close to President Biden’s heart.

They will not even allow a bill authorizing one to come up for a vote.

Another round of direct payment that is available to most Americans like the earlier three is unlikely. But there remains a chance that the federal government could step up and offer a new round of financial support, albeit in a different form. The most likely form would be an expanded Child Tax Credit for parents, an extension of the stimulus check given in 2021.

But the GOP was not on board the earlier round of CTC payments and it was a key priority for the Democrats, with President Biden personally backing the payments.

The CTC stimulus check was a key reason for the fall in child poverty that marked the last two quarters of 2021 and the first quarter of 2022. Some Republicans are of the view that the present form of the Child Tax Credit is not acceptable and have demanded that they would only accept it if it is modified and more direct aid should go out to parents.

At the moment, the CTC payments appear to be the only area where there exists a semblance of concurrence between the Democrats and the Republicans. There is a possibility that parents will at least receive some form of help in this department from the federal administration. A substantial population of children will again be free from the clutches of poverty.

For The Present The States Remain The Only Hope For Low-Income Households

While the California and Colorado stimulus checks continue into the new year, a few other states are also sending out inflation relief payments in 2023. Idaho had two tax rebates in 2022. Full-time residents who have filed their 2020 and 2021 state income tax returns by 2022 are eligible for the payments.

The tax rebate is greater than $75 for each household where they are a dependent or a taxpayer, or 12% of the total tax liability before credits, payments, other taxes, and donations on the tax returns for 2020.

The second payment, called the Special Session Rebate, equals the greater of 10% of the tax liabilities before credit. It could also be $600 for married couples filing joint returns, or $300 for other income tax filers.

Illinois has also offered two rounds of tax rebates in 2022, one for property tax and the other for income tax. Residents qualified for the rebate on income tax if they were a resident of the state for the whole of 2021. They should also have an Adjusted Gross Income that is less than $200,000 for individual filers and below $400,000 for married couples filing jointly.

For the property tax rebate, qualifiers are Illinois residents who have paid their state property tax for 2020 on their primary residents in 2021. The Adjusted Gross Income on their state tax return for 2020 should not exceed $250,000 for individual filers and double that amount for married couples filing jointly.

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