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Millions of Americans have received government funding to help them survive the Covid-19 pandemic.

The coronavirus prompted the federal government to send three sets of stimulus checks, increase federal unemployment benefits and extend the duration and entitlement to these benefits, grant small businesses unsuccessful loans, and introduce new tax credits for families.

It started with the CARES Act passed by Congress in March 2020 and continued into December with the follow-up and the American Rescue Plan Act passed in March.

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A year after the crisis began, the question now arises of how long some of these tools will be available or how quickly similar programs could be deployed if another crisis were to arise.

“It is not crazy to propose that we adopt some parts of the CARES Act and recognize that they could be useful in the future,” said Richard Prisinzano, director of policy analysis for the Penn Wharton Budget Model at the University of Pennsylvania.

Further financial help depends on what the legislature can agree on. However, based on the past year, experts have some ideas as to what would make sense for American families.

Extended unemployment benefits

On April 15, 2021, people line up in front of a newly opened career center for personal appointments in Louisville, Kentucky.

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The American Rescue Plan Act strengthened unemployment benefits for Americans through September. This includes an additional $ 300 per week in federal unemployment benefits.

Additionally, the law increases the number of weeks these benefits are available and makes federal income tax exempt on the first $ 10,200 of income from these checks.

Several new proposals, including one from Democratic Sens. Ron Wyden of Oregon and Michael Bennett of Colorado, aim to make these types of improvements permanent.

The Economic Policy Institute, a Washington think tank, is also working with other researchers to publish a paper on this type of strategy, according to research director Josh Bivens.

We have a lot of space to make [unemployment pay] much more generous and yet not stopping you from looking for work.

Josh Bivens

Research Director at the Economic Policy Institute

In general, the idea would be that once the unemployment rate starts to rise – say from 5% to 8% – the generosity of unemployment benefits will automatically increase, along with the length of time people could collect those unemployment checks.

To further strengthen the system, benefits should also be given to non-traditional gig workers as well as those looking to enter the workforce, such as staying home parents or recently graduated college students, Bivens said.

However, according to Bivens, the political process could cause this expansion to fail.

Another obstacle is finding the money to improve states’ unemployment infrastructure, especially in terms of technology.

Ultimately, the challenge is to strike a balance between providing enough money to people when they are out of work, but not so generously that they are discouraged from re-entering the world of work.

“I would argue in the US that we were far too wrong when it comes to being stingy,” said Bivens. “We have a lot of space to create [unemployment pay] much more generous and yet not stopping you from looking for work. “

Continuation of PPP lending

A New York City waiter wears a face mask in a restaurant on Manhattan’s Upper West Side on November 10, 2020.

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The American Rescue Plan Act helped stabilize the Paycheck Protection Program, a lending process that aims to keep small businesses alive. So far, $ 755 billion in loans have been disbursed.

The program was originally established by the CARES Act.

PPP loans provide incentives for small businesses to keep workers on their payrolls. In some cases, the loans may be eligible for forgiveness.

According to Penn’s Prisinzano, the government could decide in the future to continue this type of lending as a kind of unemployment insurance for companies.

“There is no reason why you might not always have this type of loan available,” he said.

The Small Business Administration loan program already works like this.

However, the perpetual provision of PPP loans has advantages when the borrowed money can be given away under certain circumstances, such as: B. when a company can demonstrate that it is profitable. It could also help businesses hurt by forces beyond their control, like a recession or a natural disaster like a hurricane, Prisinzano said.

The funds could allow affected companies to keep employees on their books and keep the lights on by paying their electricity and other utility bills.

More stimulus checks?

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Americans received around $ 850 billion from the three stimulus checks sent out last year.

Now there is a refrain from some proponents calling for additional direct payments to Americans.

This week the Economic Security Project released a report arguing that further stimulus testing is needed.

“We still need at least one check,” said Adam Ruben, campaign manager at the Economic Security Project.

Additional direct payments would help Americans who continue to struggle with high unemployment, especially those and families with low incomes and minorities, the report said.

Some democratic lawmakers have expressed support for such initiatives. Last month, a group of 21 senators wrote a letter to President Joe Biden calling for “recurring direct payments and automatic unemployment insurance renewals in connection with economic conditions.”

Additional stimulus checks would help families who do not have access to unemployment checks, they said.

Such a policy is popular with Americans too. A survey by Data for Progress in January found that 65% of Americans are in favor of $ 2,000 monthly checks for the duration of the pandemic.

However, experts are skeptical that additional checks are adequately supported by lawmakers to trigger additional payments at this point.

“I don’t think we’ll see much more pure checks,” said Prisinzano. “I just think the appetite isn’t there on either side of the aisle.”

Extension of the tax credit for children

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Many parents will see extra cash after the American Rescue Plan Act expanded tax credit for children.

While these changes will only be in effect for a year, experts expect efforts will be made to make them permanent.

Payments are $ 3,600, from $ 2,000 per child under 6 years old, and $ 3,000 per child up to 17 years of age.

Additionally, payments can be made monthly starting July, instead of families having to wait to file their taxes next year before seeing the money. These checks are said to be for up to $ 300 per month per child under 6 years old and up to $ 250 per month per child under 17 years of age.

According to Bivens, the plan calls for payments to be made to almost every family with a child.

“I would like to see this become an integral part of the economy, whether it is recession or not,” he said.