Treasury Secretary Steven Mnuchin said during a White House press conference Tuesday that the federal government is “looking at sending checks to Americans immediately." This would be the third stimulus package following two pieces of legislation already passed.
Here’s what you need to know to cut through the noise:
The proposed plan
The Treasury Department has proposed a stimulus plan that would range from $850 billion to $1 trillion in order to mitigate financial burdens.
The plan calls for an initial direct payment to be issued to Americans by April 6 and May 18 if needed.
“Americans need cash now and the president wants to get [Americans] cash now," Mnuchin said.
Payments would be distributed based on income level and family size. Senators are proposing cash payments from $1,000 to $2,000 per person.
Stimulus checks history
Stimulus checks have been used twice before. They were issued for the first time in 2001 under the Bush administration and again in 2008 to mitigate economic burdens.
“There is likely to be a positive effect on spending, but people are also worried about their debts,” said Lee McPheters, an economics professor at ASU and director of the JPMorgan Chase Economic Outlook Center. “The program is successful in that it does support spending, but not for the full amount of the checks.”
McPheters notes that an issue with the program is the checks will not have a significant impact on job loss. Many are now unemployed due to the unforeseen closures of restaurants or businesses because of the coronavirus. Those who receive the checks will most likely use them to take care of primary needs.
“People will likely pay rent, credit cards, utility bills, but not take on the discretionary extra spending that would stimulate growth,” McPheters said.
The proposal still needs approval by members of Congress.
How will this impact Arizona’s economy?
According to the Census, Arizona has had a significant population increase since 2010 which has positively impacted the economy and employment rate.
“Arizona will be hit by a double whammy...restaurants and such will be shutting down and laying off workers and meanwhile if people stop moving to the state even for a few months that will bring growth to a stop,” said McPheters.
“It is unlikely that the checks will offset those issues, since they are caused by the virus.”