Feb. 25—Every night, Tiffany Velez sips a cup of hot coffee before bed.
The coffee, she told USA Today, makes it harder to sleep but helps her stomach feel full as she looks to save money on food for her family of five so she can pay off their $1,300 worth of gas and electricity bills.
The 38-year-old New Jersey mom then checks what products are on sale at which stores, searches for digital coupons and plans her shopping route for the next day — taking gas costs into account.
“All I need to do is find a little extra,” Velez told USA Today. “I keep thinking if we pay something every week, they won’t shut the power off.”
She told USA Today her family began struggling financially when she had to quit her job as an Instacart shopper in March after her children were sent home from school because of the coronavirus pandemic. Since then, the family has been living off her husband’s welding job.
said another round of stimulus checks would pay off what her family owes in utilities.
In March, most Americans received $1,200 direct payments under the $2.2 trillion CARES Act, and in December, most received $600 direct payments under the $900 billion relief package.
But Velez is one of the many Americans in need of another lifeline, like the $1,400 direct payments proposed under President Joe Biden’s $1.9 trillion American Rescue Plan, as the country approaches a year spent in the grips of the coronavirus pandemic.
And, as lawmakers have debated components of another round of COVID-19 relief, including the size of the checks, some economists have said the additional payments could provide an overall boost to the economy, which has taken a hit during the pandemic.
The need for another round of checks
Across the country from Velez, Gio Martinez from Southern California is also struggling to make ends meet after receiving previous stimulus payments from the government.
Martinez, who has a 4-year-old daughter, is a cook at Denny’s and had his hours cut when the pandemic hit, he told CNN. He’s maxed out several credit cards and used the $1,200 check he received last spring to pay down some of that debt and buy his daughter new clothes.
“It breaks my heart seeing her wear clothes that are too small for her,” he told CNN.
But he told the network he’s now “behind on everything,” including the $400 in monthly rent he pays to his parents so he and his daughter can live with them.
Martinez is far from alone.
A Money/Morning Consult survey conducted in late January found 68% of Americans said they need another stimulus check and 39% said they need one “a lot” to get by. The survey also found that 48% of adults would use another round of checks to buy necessities, 40% would use it to pay debt and 35% said they’d save or invest it.
That’s similar to how many Americans used previous rounds of checks.
A June study from the U.S. Census Bureau found that, while more than one-third of Americans in households with incomes between $75,000 and $99,999 planned to save it or invest it their checks, 87.6% of adults in household with incomes of $25,000 or less planned to spend the payments.
Among Americans who spent their first round of stimulus payments, roughly 80% spent at least some of them on food and roughly 78% used them on rent, mortgage payments or utility bills.
What are experts saying?
Some lawmakers have balked at the cost of Biden’s stimulus proposal and questioned its timing given the passage of the $900 billion package in late 2020.
A group of Republican lawmakers in February proposed a counteroffer that would decrease the size of the checks from $1,400 to $1,000. It also would have further targeted them, meaning fewer Americans would get the checks, as some lawmakers argued many Americans who received them would put them in savings instead of spending them.
But Biden has said he’s against cutting the size of the payments, and some economists have said that even stimulus checks not immediately spent could still boost the economy in the long term.
“This is the short view versus the long view,” Greg McBride, chief financial analyst at Bankrate told NBC News. “In the short term, stimulus money put in savings or used to pay down debt may not give an immediate boost to the economy, but households that have more savings and less debt are in a better position to spend on a consistent basis going forward.”
A study from Deutsche Bank found some amateur investors have used stimulus money to invest in shares, and it estimated a third round of stimulus checks would pump $170 billion into the stock market, Markets Insider reports.
Additionally, a study by the Brookings Institution found Biden’s relief plan would increase the country’s gross domestic product, or GDP, by 3.6% above the Congressional Budget Office’s baseline level projections, which assume no additional fiscal support, by 2021, and by 2.1% the next year.
That would put the GDP above pre-pandemic levels, meaning “some of the economic activity lost during the pandemic would be made up,” Brookings says.
Wendy Edelberg, director of The Hamilton Project and a senior economics fellow at the Brookings Institution, told NBC News that a “‘sweeping nature of the direct stimulus payments” would offer the most benefit because it would help Americans who might not otherwise qualify for other aid.
“A lot of people are feeling economic pain but are working — maybe they’ve seen cuts in hours, maybe they normally got financial help from family,” she told NBC. “A lot of the other fiscal support we have can be pretty complicated for people to access.”
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