LITTLE ROCK, Ark. — A $2 trillion stimulus package that is supposed to provide some relief to Americans and businesses is expected to be voted on by the House Friday. It was passed by the senate late Wednesday night.
The package will include billions of dollars in help for businesses and a cash payment of up to $1,200 for most working Americans.
Many viewers have reached out to THV11 with questions.To help answer those, THV11 spoke with Dr. Michael Pakko, Chief Economist and State Economic Forecaster at UA Little Rock.
How is this money supposed to be used?
Pakko: As far as how the money is to be used, there are no limitations. No strings attached. The intention is to replace some of the consumer spending potential that is likely to be lost as people are losing their jobs and it is supposed to cover some of the difference. There are additional measures to assist those who are directly affected either through unemployment or some other reason that their work is not available, but this cash payment to individuals is intended to make up the difference in the overall aggregate spending that might take place otherwise.
Will the elderly and those on disability receive a check?
Pakko: In reality it is being paid out to anyone who filed a tax return as early as the 2018 tax year, which you would have filed last year in 2019. If you filed this year, they will use your declared income from 2019,but if you haven't yet filed this year they will use your 2018 income to determine your eligibility for it.
What other federally funded services will be cut in order to make these payments?
Pakko: There are really no provisions for cutting services or making up for these expenditures. It's going to be financed entirely by deficit spending by the federal government, although the federal reserve is also pumping the system which will help grease the wheels as well. In the long run however, there really has been no consideration for paying for this as Congress often worries about. It's just being funded out of current spending and current borrowing.
Will my taxes increase in the future to pay for this debt and, if so, by how much?
Pakko: There is no explicit provision to pay for any other these programs either now or in the future. In the past there have been some rebate programs that attempted to do the same thing, but they acted as if it was a rebate of taxes paid or and offset of taxes owed, but that is not the case with this.
How soon can Americans expect to see the money?
Pakko: The treasury secretary has pledged that within 3 weeks of the passing of the program, they would get the checks out. There are some who say that is logistically a challenge and it might be longer than that, but the promise from the Federal Government is to move with all deliberate speed and get them out as soon as possible.