‘This Is Unacceptable’: Trump Administration Says Millions May Have to Wait 5 Months to Receive $1,200 Relief Check
“That’s not even remotely fast enough for the millions of working people who have seen their hours slashed, their expenses rise, and their government refuse to take sufficient action.”
By Jake Johnson
More than 10 million Americans lost their jobs last month and are in desperate need of immediate financial assistance amid the coronavirus crisis, but the Trump administration said in a draft plan circulated internally Thursday that people who do not have direct deposit information on file with the IRS—a group that is disproportionately low-income—may have to wait until September to receive the one-time $1,200 payment authorized under the latest stimulus.
The IRS said in the draft plan that it intends to start sending electronic payments by late next week to those with direct deposit information on file from their 2018 or 2019 tax returns, the Washington Post reported.
“As people lose their jobs, we can’t leave them in the cold while big corporations easily access their bailout money.”
—Rep. Alexandria Ocasio-Cortez
“However, $30 million in paper checks for millions of other Americans won’t start being sent out until April 24, as the government lacks their banking information,” according to the Post. “And some of those checks won’t reach people until September, the document shows, underscoring the reality that many Americans could have to wait five months to receive their checks.”
During a press briefing Thursday evening, Treasury Secretary Steve Mnuchin—who just last week dismissed surging unemployment as “not relevant”—promised that Americans without direct deposit information on file will soon be able to access a “web portal” to provide their banking details to the IRS.
Patricia McLaughlin, a Treasury Department spokesperson, told the Post that “the overwhelming majority of eligible Americans” will receive stimulus payments within the next three weeks, but progressive lawmakers and advocates are warning that millions of vulnerable people—including those living on Supplemental Security Income (SSI) and veteran pensions—could fall through the cracks.
“This is unacceptable,” Rep. Alexandria Ocasio-Cortez said of the possible five-month delay in an email to supporters late Thursday. “That not even remotely fast enough for the millions of working people who have seen their hours slashed, their expenses rise, and their government refuse to take sufficient action.”
“This lockdown could last for months,” said Ocasio-Cortez. “As people lose their jobs, we can’t leave them in the cold while big corporations easily access their bailout money.”
Others similarly raised alarm about the IRS’ estimated timeline, which experts warn could be derailed by technical glitches.
“This is such a stupid disaster. We did not have to have mass unemployment,” tweeted New York Times columnist Farhad Manjoo. “The policy response could have been to have the government pay companies’ payroll, like European countries are doing. Instead we’re letting people lose their jobs and sending them too-small checks too late.”
people are gonna get evicted waiting for these checks
people are going to die waiting for these checks https://t.co/Li8jR9ECZz
— Kelsey D. Atherton (@AthertonKD) April 2, 2020
The Washington Post reported that the IRS draft plan “would distribute paper checks to the lowest-income Americans first, prioritizing payments for individual taxpayers with incomes of $10,000 or less on April 24.”
“Checks for earners of $20,000 or less would be in the mail May 1, followed by those with incomes of $30,000 on May 8, $40,000 on May 15, and continuing in income increments of $10,000 each week,” according to the Post. “The IRS plans to issue about 5 million checks each week.”
Late Wednesday, the Trump administration reversed policy guidance that would have required millions of Social Security recipients to file a tax return in order to receive their payments. However, critics said the reversal needlessly leaves out many SSI recipients and veterans, potentially causing massive delays in payments.
“The president appears more interested in putting his name on the check than getting it to Americans as quickly as possible.”
—Aaron Klein, Brookings Institution
“These are important members of our communities living with additional burdens in this pandemic,” Chuck Marr, senior director of federal tax policy at the Center on Budget and Policy Priorities, wrote in a blog post Thursday. “There’s no reason to add to that burden by making them navigate filing a tax return when their government has all it needs to deposit a rebate in their bank account.”
As millions of people worry about payment delays, many others—including high school seniors, college students, and immigrant families—have learned in recent days that they are not eligible for the one-time $1,200 payments, which are part of a massive stimulus package President Donald Trump signed into law last Friday.
Aaron Klein, a fellow in economics studies at the Brookings Institution, estimated Tuesday that around 70 million Americans “are likely to have to wait at least another month, or more,” to receive their stimulus payment because they didn’t owe taxes—and thus did not file a return—in 2018 or 2019, or they did not use direct deposit for their tax refund.
“Despite being the largest economy on earth we lack both government run real-time payments and universal bank accounts, systems common among developed countries,” Klein noted. “Americans shouldn’t have to wait for Congress to act. Federal bank regulators have substantial authority to fix these problems. The Federal Reserve could require all checks under $5,000 to be immediately available to consumers, a power Congress delegated in the 1980s.”
“Ultimately, where there is a will, there is a way,” Klein wrote. “The president appears more interested in putting his name on the check than getting it to Americans as quickly as possible. The response to COVID is exposing a lot of problems ignored for too long. Add our basic banking and payment systems to this growing list.”Our work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.
‘Government Needs to Step In’: Food Banks Across US Report Unprecedented Demand—and Shortages—as Coronavirus Pandemic Ravages
“We’re seeing people from every socio-economic level because the majority of Americans live paycheck to paycheck.”
By Julia Conley
As 6.6 million Americans filed jobless claims last week—part of at least 10 million people in the U.S. who are out of work in the last two weeks due to the coronavirus pandemic—increasingly long lines at food banks across the country offered another grim illustration of the financial realities faced by the poor and working classes in the United States.
According to an investigation by The Guardian, demand at food banks has increased by eight times in some areas. About a third of people interviewed by the outlet at food banks last month had never before needed food assistance.
Kristin Warzocha, CEO of the Greater Cleveland Food Bank, said the trend was not surprising considering the precarious circumstances working Americans are accustomed to living in, with 78% of workers living paycheck to paycheck and 45% reporting that they have no savings account.
“We’re seeing people from every socio-economic level because the majority of Americans live paycheck to paycheck,” Warzocha told The Guardian.
The coronavirus, officially known as COVID-19, spread to every state in the U.S. in March and drove governments in 38 states to direct nearly 300 million people to stay home—forcing businesses across the country to close and lay off or furlough workers.
In Cleveland, The Guardian spoke with first-time food bank visitors including a freelance photographer, a woman who worked in the hospitality industry, and a cab driver.
At St. Mary’s Food Bank in Phoenix, Arizona, spokesman Jerry Brown reported that “people who knew about us because they donated or volunteered are coming in for food.”
“The 2008 recession doesn’t touch this,” Brown told The Guardian. “It’s a different ballgame.”
On social media, a number of media outlets detailed unprecedented demand and supply shortages at food banks in Florida, Arizona, and Pennsylvania—where Pittsburgh Post-Gazette photographer Andrew Rush posted an aerial view of hundreds of cars lined up outside the Greater Community Food Bank in Duquesne.
— Andrew Rush (@andrewrush) March 30, 2020
The Arizona National Guard stepped up its efforts to bolster the supply of food Thursday, as a few dozen soldiers packed boxes at food banks seeing a surge in demand. The U.S. so far has reported 93,427 COVID-19 cases, and 1,385 deaths.
— The Voice of America (@VOANews) March 27, 2020
Produce is rotting on the vine in South Florida, but the demand at food banks is higher than ever. At a recent food giveaway in Miami, the line of cars was eight miles long. Incredible story by @Carlos_Frias & @KevinGHall https://t.co/r0rpT1wkK1
— Alex Harris (@harrisalexc) March 31, 2020
The food bank in Greater Pittsburgh reported it received more than 1,000 calls from people in need of assistance in the past two weeks. Ninety percent of the calls were from people who were newly unemployed.
In Massachusetts, a pantry in Amherst distributed 849% more food in March than it did last year.
The high demand at the nation’s food banks comes as some Americans await a means-tested one-time payment of $1,200 per adult—a figure that is projected to last the average household less than two weeks in the midst of a crisis that could go on for several months.
In order to support the rising number of Americans facing job loss and food-insecurity, Kellie O’Connell of the Lakeview pantry in Chicago told The Guardian, the federal government must take responsibility for ensuring working people in the wealthiest country in the world don’t go hungry.
“Philanthropy and not-for-profits are not going to be able to meet food demands,” O’Connell said. “The government needs to step in.”
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Fed Economists Warn US Unemployment Rate Could Soon Reach 32%—During Great Depression It Peaked at 25%
“These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years.”
By Jake Johnson
Economists at the Federal Reserve Bank of St. Louis are warning that if the current rate of U.S. job losses continues, the country’s unemployment rate could reach a staggering 32.1% by the end of June as the coronavirus pandemic-induced downturn sparks mass layoffs across the nation.
Miguel Faria-e-Castro, an economist with the St. Louis Fed, wrote in an analysis last week that 47 million more workers could lose their jobs by the end of the second quarter of 2020, bringing the total number of unemployed people in the U.S. to 52.8 million. As CNBC noted, that number would be “more than three times worse than the peak of the Great Recession.”
Faria-e-Castro’s projection of 32.1% unemployment would put the U.S. jobless rate significantly higher than the Depression-era peak of 24.9%.
“The projections are even worse than St. Louis Fed President James Bullard’s much-publicized estimate of 30% [unemployment],” CNBC reported. “They reflect the high nature of at-risk jobs that ultimately could be lost.”
Faria-e-Castro stressed that “the expected duration of unemployment” could matter more “than the unemployment rate itself, especially if the recovery is quick (and so duration is short).”
“These are very large numbers by historical standards,” Faria-e-Castro wrote, “but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years.”
A lethal pandemic is generating unprecedented levels of layoffs in a country that insists on tying health care access to employment. Millions will lose coverage at the very moment they need it most. https://t.co/japHL6MtKm
— Public Citizen (@Public_Citizen) March 31, 2020
In response to the St. Louis Fed analysis, HuffPost senior reporter Zach Carter tweeted, “It remains simply incredible that Congress is not even in town during a crisis of this magnitude.”
“An astonishing, bipartisan failure of government,” Carter added.
It remains simply incredible that Congress is not even in town during a crisis of this magnitude. An astonishing, bipartisan failure of government. https://t.co/PbIEdXgejX
— Zach Carter (@zachdcarter) March 30, 2020
As Common Dreams reported last Friday, 3.3 million people filed jobless claims two weeks ago, shattering the previous record of 695,000 set in 1982.
“I have been a labor economist for a very long time and I have never seen anything like this,” Heidi Shierholz of the Economic Policy Institute wrote in a blog post last week. “Furthermore, this is just the tip of the iceberg.”
More than 40 economists surveyed by Bloomberg on Monday said they believe new Labor Department unemployment numbers set for release Thursday will be even higher.
Thomas Costerg, an economist at the investment firm Pictet Wealth Management, predicted that new jobless claims could be as high as 6.5 million while Goldman Sachs estimated 5.25 million.
New York magazine’s Eric Levitz wrote Monday that while the “St. Louis Fed’s projection is just a rough estimate… there’s reason to think its catastrophic prediction is in the right ballpark.”
“It’s hard not to suspect that most every part of our economic life is going to get worse before it gets better,” Levitz added.licensed under a Creative Commons Attribution-Share Alike 3.0 License.