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Wednesday, February 8, 2023

Federal Stimulus Checks Stay Off The Table In 2023: But States Continue To Send Out Stimulus Checks

The federal administration stayed off issuing any further stimulus checks in 2022. The political bickering in Washington over the cause of inflation forced President Joe Biden to backtrack. He could not muster sufficient votes to get any bill through the Senate. While the state stimulus check payments for 2022 have spilled onto the next year, there are no indications that any state will announce fresh payments in 2023.

The previous year was marked by record inflation that touched a four-decade high. The future has consistently stayed at the same level and even touched 9.1% at one point in June 2022. It was the highest since November 1981.

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Despite the pandemic and the economic recession that followed, 2020 and 2021 had been relatively easier for Americans solely due to the multiple rounds of stimulus checks and the slew of other support measures including the extended unemployment checks that continued through September 6.

The other major stimulus check other than the three rounds of the Economic Impact Payments was the expanded Child Tax Credit stimulus check that was paid out in half through monthly payments between July and December 2021. The balance of 50% was paid against the 2021 income tax return filed by families and individual parents in the first quarter of 2022.

But the 2022 inflation has been a period of great financial distress for millions of Americans, especially low and moderate-income families. Inflation has continued to surge as far back as the last quarter of 2021 and it has been a relentless rise in all four quarters of 2022.

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The rising prices have affected all products and services with the price of gasoline touching a record high. The prices of groceries and other essentials have also hurt Americans just as bad even as the service industry also witnessed a rise in prices across the spectrum.

People have been forced to stick to the bare essentials and even that has been a tough ask as most workers have reported negative earnings in 2022. The average rise in wages that touched 3.5% has not been able to keep up with the 8.5% inflation on average.

While some have cut back on the small luxuries, others have been forced to cut back even on essentials including medication and food. Many senior citizens and the disabled who live on social security payments have been forced to cut back on expenses. The payments ran out early by the third week for most families.

There has been little response from the federal administration this year and neither have they reported any success in the fight against inflation. The Federal Reserve reckoned that several aggressive hikes in interest rates would act as a deterrent, but its efforts have not borne fruit so far.

And this has been compounded by the absence of federal stimulus checks in 2022. The last of the federal stimulus checks were the $1,400 max stimulus checks issued under the American Rescue Plan Act in March 2021 by incoming president Joe Biden.

The payments were the biggest of the stimulus checks and began within days of President Biden signing the Rescue Plan bill. People began receiving their payments through direct stimulus checks within days after the bill was signed by the President.

The payments continued and were followed in quick succession by the expanded Child Tax Credit stimulus check.

With the labor market going strong, there is little chance that the federal government will go for any further stimulus checks. The only federal support is for those families and individuals who have not claimed the third economic impact payment, the expanded Child Tax Credit stimulus check, and the Earned Income Tax Credit payments.

Federal Government Fails To Arrest Inflation Even As State Stimulus Checks Helped Americans Through 2022

The pending payment could amount to a significant sum. This is especially true for those who have not collected any part of the 2022 stimulus checks and have a large family. It could add up to as much as $10,000 for a family of four.

The federal administration has been unable to rein in inflation through the whole of 2022. The increase in Fed rates has not proved to be effective. But the state stimulus checks have saved Americans through 2022 and the payments by some states have spilled over in the new year.

The states used up surplus budget revenues earned in 2021 when the economy experienced a boom in the latter half of 2021. They have also been majorly supported by the funds allocated to states under the American Rescue Plan Act of 2021. The funds sent to local, state, and tribal bodies have greatly helped local bodies to support residents in 2022 when there have been no federal direct stimulus checks 2022.

Will There Be A Stimulus Check From The Federal Administration In 2023

Though it seems unlikely at this stage, many experts warn that a repeat recession could again force Joe Biden to step in with another stimulus check. It could set the stage for more payments, both direct and indirect, as the economy is yet to recover from the recession that followed the pandemic in the first and second quarters of 2020.

For the present, the stimulus checks going out in 2023 are those being sent by California and Colorado. They are in essence a spillover from the 2022 stimulus checks.

The Golden State is sending out debit cards to offline filers and the payments of up to $1,050 are expected to continue through January. This happened even though the administration had initially set January 14, 2023, as the cutoff date.

The debit cards are being delayed as they are going out through the US postal service. It is taking at least two weeks for the payments to be delivered after they have been issued by the state administration.

The Colorado stimulus checks have been the most generous on offer with $750 going out to individuals and double that amount to joint filers. The Centennial State has set much lower criteria for the payments and the payments have been boosted from the initial proposal of $400 and $800. The payments were sent under Senate Bill 22-233 signed by Governor Jared Polis.

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