Congress Considering Cash ‘Handouts’ to American Households

Cash handouts to all American households is gaining support in Congress as the best way to shore up an economy brought to a near-standstill by the coronavirus.

Senator Tom Cotton (R:AK) said he is working on legislation that would provide cash stipends to American households. Several House Democrats back sending $1,000.00 checks as the best way to help households.

Among economists, the idea of across-the-board cash handouts as a response to the epidemic has been rapidly gaining support mainly because the scale of the shock has become much clearer, as swaths of the economy have essentially shut down.

As a result, analysts worry that some of the virus-relief proposals already in the pipeline are too narrow.

A bill to expand paid sick leave is now awaiting a vote in the Senate, but many service-industry employees will be stuck at home because their workplace is closed, not because they are ill. And people in temporary work may be excluded.

Sending checks to all Americans would also help households keep current with bills, from rent to payments due on various kinds of loans, while the economy powers down.

It is a way of ensuring that people do not lose their homes or see their credit scores tumble because of a severe but temporary downturn caused by an epidemic.

The checks could also help prevent loan defaults, which can ripple through the financial system and cause further losses as happened during the Y 2008 crisis.

The White House is interested in the idea. Treasury Secretary Mnuchin has said The Administration might be open to such payments in the form of a refundable tax credit: “That has certain advantages of we can inject money really quickly.”

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