Each year I help over 500 clients file their Canadian and US tax returns as well as plan for both their Canadian and US investment accounts. I also regularly help new US clients plan for their move to Canada.
With a first-ever pandemic holiday seasoning drawing nearer every day, there is no real change in the second-stimulus stalemate that has drawn on for months now. Deep partisan divisions in both the House and Senate continue to hold sway even as new coronavirus cases top 200,00 per day. One of the most contentious items remains the final price tag of a second package. While Republicans continue to push a “targeted” bill similar to the $500 billion proposal that has already been blocked twice in the Senate, Democrats are firmly entrenched on the idea of the Health and Economic Recovery Omnibus and Emergency Solutions (HEROES) Act as the “starting point” for any negotiations, according to The Hill.
The House passed the $2.2 trillion HEROES Act over 6 months ago, but it has been languishing ever since despite the fact it would give Americans a second stimulus check of up to $1200. According to a Report (August) from The Aspen Institute:
“an estimated 30–40 million people in America could be at risk of eviction in the next several months. Many property owners, who lack the credit or financial ability to cover rental payment arrears, will struggle to pay their mortgages and property taxes and maintain properties. The COVID-19 housing crisis has sharply increased the risk of foreclosure and bankruptcy, especially among small property owners; long-term harm to renter families and individuals; disruption of the affordable housing market; and destabilization of communities across the United States.”
Democratic Senator Mark Warner (Virginia) has been particularly succinct and colorful in his criticism of the extended deadlock, call it “stupidity on steroids.”
On a positive note, at least 9 Senators from both parties have formed an informal working group with one specific focus: secure new COVID spending during the lame-duck session that will continue through at least January 21, 2020 (the date of the 59th presidential inauguration).
Biden’s Economic Advisors Call for Speedy Response
Another glimmer of hope comes from members of President-elect Joe Biden’s newly announced economic team are speaking publicly about the need for aggressive action on the point of a second stimulus package. As reported in Newsweek, “Former Federal Reserve Chair Janet Yellen, Biden’s pick for Treasury Secretary, told Bloomberg TV in October that relief is needed immediately and will likely be required even after the outbreak is over.” Elsewhere, Yellen has called hardships created by the pandemic “an American tragedy.”
Similarly, Jared Bernstein, who has deep ties to Biden from his years as an economic advisor during the Obama administration, has stressed that while the size and composition of a second relief package are important, speed is crucial given the current state of financial and health affairs. Princeton University’s Cecilia Rouse, Biden’s pick to chair his Council of Economic Advisors, has told Bloomberg in the past that she is “quite stunned Congress has not passed another bill.”
When introducing his selections for his top advisory roles, Biden continued to underscore his commitment to a timely response, stating that “I know times are tough, but I want you to know that help is on the way.”
The Bottom Line
The bottom line is that the clock is still ticking and the number of in-session days running out for both the House and Senate to make the promise of a second stimulus promise into reality before breaking until the New Year.
Watch this blog for updates on this and other financial issues as they appear.