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Saturday, December 3, 2022

Close To Half Of The States Are In Various Stages Of Sending Inflation Relief Stimulus Checks: Will the Inflation Reduction Act Rein In Rising Prices?

One fact that we all can be certain of at this stage is that the federal administration is not providing a 4th stimulus check as it has faced stiff opposition from the Republicans and even from a couple of Senators within the Democratic Party.

The federal administration also faced flak for the third stimulus check, part of the American Rescue Plan Act. The Republicans have blamed it for the record inflation figures that started their relentless rise from April 2021. But evidence points to multiple factors for the rising prices with the pandemic making this situation inevitable. The stimulus check only delayed it from happening.

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President Biden is also preoccupied with the sweeping climate, tax, and health care bill worth around $750 billion. The ruling Democrats believe that it could help bring down inflation and prevent inflation. This bill was originally touted as the Build Back Better bill and was signed by President Biden on August 16, but not before party colleagues, Senators Joe Manchin and Kyrsten Sinema had got their pound of flesh.

Joe Manchin, backed by the coal, oil, and gas lobby forced the president to backtrack on key climate issues that the energy industry opposed. This sector is a key financial backer of the Senator.

The bill aims to cut drug costs, raise corporations’ taxes in some sectors, address climate change, and shrink the huge deficit. At a bill signing ceremony at the White House, Biden praised the legislation as among the most momentous stages in the nation’s history. He said that with the passing of this bill, the American people won over the special interest groups.

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President Biden said that his administration had come in during a dark phase in American history. He cited the threats faced by democracy, the massive joblessness, and the pandemic.

But the administration had not wavered or flinched and was not going to give in now, he said.

Last year the larger spending package, the Build Back Better bill, estimated at $2 trillion stalled in Congress after Joe Manchin and Kyrsten Sinema stalled proceedings. With the Senate split right down the middle at this stage, every Democratic vote was crucial and Manchin and Sinema used this opportunity to grab concessions for their backers, notably the energy sector.

The Democrats believe that the bill will create millions of jobs and help lower costs significantly. The latter remains the biggest hurdle in further stimulus checks. But with states stepping in significantly, there are growing concerns that it could lead to another round of rising in prices. This would negate the inflation support offered by the states.

State Stimulus Checks Gather Momentum With More States Stepping In

With California and Florida stepping in with proposals for stimulus checks for their residents, the number of states that have provided or have initiated legislative proceedings to pass a stimulus check is inching towards the halfway mark.

Alaska was among the first states off the mark with the government stepping in with more money granted to their residents. The state senate approved the inflation relief stimulus check with a 15-5 vote in favor of the legislation.

The generous relief package will give residents of Alaska a $1,300 stimulus check that will help ease the cost of the high energy bill. The Alaska Senate has also voted 10-9 on an extra dividend that would be worth $4,200. The state will increase its dividend payment to $2.8 billion.

Coloradans are set to get a stimulus check of $750 for single filers and double that amount for married couples filing jointly. The law, signed by Governor Jared Polis will provide immediate relief to residents by sending a stimulus check as early as summer.

Residents who have filed their state income tax returns or have applied for a rebate on property tax, heat credit, or rent, by June 30 will receive the tax rebate by September 30, 2022. Filers who have sought extension will have a deadline of October 17, 2022, and should receive the stimulus check by January next year.

The money being given to Coloradans comes from taxes collected by the state that goes over a cap set under the Taxpayer Bill of Rights (TABOR). The state Constitution has provisions that require taxes that are above a certain figure to be rebated to taxpayers. The cap is determined by the state population and inflation figures.

Residents must also be full-time residents and be above 18 years on December 31, 2021, to be deemed eligible.

Florida is working to support foster and adoptive families in the state through the Hope Florida initiative. Around 60,000 families will receive a one-off $450-per-child stimulus check which will be a help amid rising inflation. The money can be used for anything, but the state administration has advised people to use it for back-to-school expenses and filling up at the pump.

The stimulus checks aim at empowering adoptive and foster families in the state and creating a healthier public-private partnership.  The $35.5 million bill for the package comes from the American Rescue Plan Act passed by President Biden in March 2021. It came as a surprise as Republican Governor Ron DeSantis has earlier been vehemently opposed to the ARPA and blamed it for the present inflation high.

Not everyone will get the Florida stimulus check with foster parents, relative and non-relative caregivers, participants in guardianship assistance, and families receiving Temporary Assistance for Needy families being the beneficiaries. The payments will go out as paper checks and will be mailed directly to families and will reach before the end of the tax holiday.

California, sitting on a huge budget surplus of $97 billion is giving out one of the most generous stimulus check packages for its residents. 23 million residents, around 60% of its residents, are set to get a stimulus check that could go up to $1,050 for joint-filing families with a combined income below $150,000 and declaring at least one dependent, the maximum allowed.

Joint filers with income between $250,000 and $500,000 will also come under this package. But the stimulus check will be pared down to a maximum of $600 per family with at least one dependent.

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