Finally, the Trump Administration and House Democrats seem to be close to reaching an agreement, after expert economists have, for months, been warning of the risks of not passing a new relief bill. The use that individuals have given their first check shows how necessary a second round of direct payments is.
Studies have found that direct assistance provided by the CARES Act, which allowed the issuance of stimulus checks of up to $ 1,200 per person and weekly unemployment benefits of $ 600, had a huge impact on keeping Americans clothed, housed, and fed.
A recent report from the Economic Policy Institute found that stimulus checks and unemployment benefits helped keep 13.2 million Americans out of poverty through June.
From April through May, Americans with low and middle income received a check to help them weather the economic crisis brought on by the coronavirus. What did these people do with the money they received?
A recent study by the National Bureau of Economic Research did an analysis to find out how citizens are using their stimulus checks.
The result of the investigation showed that people are struggling to pay the bills and that, for the most part, the money was used to have shelter and food on the table.
This follows from the things Americans chose to do with their $ 1,200 stimulus checks.
According to the results of a study by the Federal Reserve Bank of New York:
36% of the stimulus payments were used for savings.
35% of the money was used to pay debts.
18% of the funds were used for essential expenses, such as expenses necessary for daily living.
8% was used for nonessential expenses, such as hobbies, leisure, vacations, and other items that respondents don't need.
In addition, 3% of the funds were destined for donations.
Overall, the report found that low-income households were more likely to spend their stimulus checks, high-income people were more likely to save it, and those with mortgages or renters chose to pay off their home debt.
As early as June, a similar poll by YouGov had revealed that nearly a third of people who received a stimulus check said they used their money to pay bills and make ends meet.
Paying bills was flagged as the number one priority and included paying cell phone bills, utilities, cable TV, and rent before buying essentials, MarketWatch reported.
The stimulus package that both sides are negotiating this week includes a second round of stimulus checks and enhanced unemployment benefits, which could be enacted if House Democrats and the White House proposed a bill that GOP led Senate accepts.