Forget about free money — you might have to do more to earn any future aid from the federal government.
The coronavirus pandemic has had a devastating impact on the entire world. Millions of people have caught the COVID-19 disease, with hundreds of thousands of deaths. Even those who’ve avoided the coronavirus itself have had to deal with its economic consequences, which include shutdowns and stay-at-home orders that have thrown tens of millions of people out of work.
The U.S. government has already provided substantial financial assistance to address the consequences of the pandemic, including the much-publicized $1,200 stimulus checks that the majority of Americans have either already received or will receive within the next few months. Some lawmakers believe that more assistance is necessary, and that’s what prompted the House of Representatives to pass the HEROES Act, which includes another set of stimulus checks. However, the Senate has taken a much less aggressive approach toward further coronavirus economic relief, and it’s far from a foregone conclusion that it will vote in favor of the House bill.
Instead, a bipartisan group of lawmakers there are looking to provide more targeted relief to those Americans hit hardest by the coronavirus crisis. If it becomes law, it could provide thousands of dollars in assistance — but only to a more select group of those in need, and only in exchange for agreeing to do some hard work of your own.
Getting help — to get back to work
With political issues hurting the chances of further economic relief, Senate lawmakers have had to get creative in coming up with ideas to get more money to those Americans in need. Four senators came up with a bipartisan idea that could get as much as $4,000 into the hands of those who’ve lost their jobs because of the pandemic. The group of senators includes Sen. Tim Scott (R-S.C.) and Sen. Ben Sasse (R-Neb.) on the Republican side of the aisle, along with Sen. Amy Klobuchar (D-Minn.) and Sen. Cory Booker (D-N.J.) as the Democrats in the bipartisan effort.
The proposal, to be called the Skills Renewal Act, would create a tax credit that would cover the costs of training programs necessary to build skills that will be in higher demand among employers in the near future. Workers who lost their jobs as a result of the pandemic in 2020 would have access to the credit, and they’d have until the end of 2021 to get the training eligible to receive it. The $4,000 credit amount would be fully refundable, allowing taxpayers to get it even if they’d otherwise owe no tax.
Eligible programs include traditional degree programs as well as certificates, apprenticeships, and other work arrangements. Distance learning would also be included in the measure.
Accelerating a trend that already existed
Although the pandemic has caused massive economic disruptions, many of the conditions that made workers vulnerable to its effects were already in place before the COVID-19 outbreak began. The types of jobs that more low-income workers tend to gravitate toward have been particular susceptible to closures, while higher-income work has been more likely to be available even on a remote basis. That’s exacerbated income inequality issues during the pandemic and the related shutdowns.
The four senators agree that giving workers more tools and training to help them succeed is a worthy way to spend federal money. Rather than hoping that lost jobs will come back once businesses reopen, the measure would encourage people to improve their skills in a way that ideally they would have done even without the pandemic.
Get ready to do more
Many people wouldn’t call a $4,000 tax credit for skills improvement a “stimulus check” at all. Yet to the extent that the money is intended to help foster economic growth, the credit could well have a longer-term benefit for the workforce than the original round of $1,200 stimulus checks.
Even with bipartisan support, there’s no guarantee that lawmakers will be able to agree to anything related to a phase 4 stimulus bill. Until the air clears somewhat, it’ll be tough to plan for 2020, and you shouldn’t take any aid for granted until you actually receive it.
Author: Dan Caplinger