New Proposal for $1,200 Stimulus Checks for Low-Income College Students

This is my stimulus update for Tuesday, June 30th.

Paycheck Protection Program (PPP)

June 30th, does that date ring a bell?

Well, it should, because that is the deadline to apply for a PPP, Paycheck Protection Program loan.

Yes, the deadline is today at midnight.

Nevertheless, despite today being the deadline, apparently $130 billion from the PPP loan program has been left unused. Various senators are looking at ways to use the remaining funds to help small businesses as they navigate the COVID-19 pandemic.

For example, Republican Senator Marco Rubio of Florida is working on legislation to create new programs to allow chambers of commerce to apply for this government money, as well as directing more money to certain businesses that prove that they were affected by the pandemic.

Infrastructure

Moving Forward Act, the Democrat’s $1.5 trillion infrastructure plan. No stimulus tax in there, but still infrastructure is important to our health and wellbeing, both as individuals, as well as our communities.

Well, the White House issued a statement yesterday saying that they believe that the Moving Forward Act is full of wasteful green new deal initiative, and President Trump will likely veto the legislation if it comes across his desk.

Which it probably won’t, because Mitch McConnell has said he won’t take it up in the Senate. So that’s the Moving Forward Act.

IRS / Tax Update

I told you a couple updates ago that some conservative tax groups had been asking Treasury Secretary – Steven Mnuchin, IRS Commissioner – Charles Rettig at the Treasury Department to consider moving the tax deadline even past July 15th.

It was moved from April 15th to July 15th. And some groups say, “Hey, a lot of folks can’t make their tax bill by July 15th because of COVID-19. Can you all please extend that even further?”

Well, the IRS has come out and said, “No way, we’re not going to do that. Taxes will still be due for tax year 2019 on July 15th, you can extend your tax return filing to October 15.”

Secretary Mnuchin said, “After consulting with various external stakeholders, we have decided to have taxpayers request an extension if more time is needed. I would encourage Americans to file their taxes as soon as possible so those who are due refunds can receive them quickly.”

So if you haven’t done your taxes yet, please do so, especially if you’re expecting a refund.

Yesterday, IRS National Taxpayer Advocate, Erin Collins, said that some refunds are being delayed due to mistakes made at the IRS. She said some taxpayers are experiencing long delays in getting their refund because the IRS processors filters mistakenly flagged them.

Some of these refund delays have occurred for low and middle income families claiming certain tax credits.

So here’s what happened.

Some people file their tax returns. The IRS systems incorrectly apparently flagged those tax returns as it’s requiring additional documentation. IRS and its automated system sent those taxpayers additional documentation.

But according to the National Taxpayer Advocate, Erin Collins, many of those tax returns hadn’t even been looked at yet by the IRS. So big mistake at the IRS, but you know what, maybe that’s what we need to expect these days.

If you’re wondering where your refund is, that might be what’s happening to it. Turns out paper returns, IRS estimated that as of May 16th it had a backlog of 4.7 million paper filings that it has to get through.

Proposed $1,200 Stimulus Check for Low-Income Students

Let’s talk about this new stimulus check or this new proposed stimulus check for low income college students.

So, U.S. Representative Bobby Rush, democratic congressmen from Illinois, introduced the Student Recovery Eligibility for Low-Income Individuals to Exact Funds, acronym RELIEF Act of 2020.

This would basically give college students who received a Pell Grant, a direct payment, a stimulus check of $1,200.

Now to receive a Pell Grant as a college student, you have to come from a relatively low-income family, typically incomes less than $20,000. I think for a certain family size and things like that, it could be as much as $50,000.

But the vast majority of Pell Grant recipients come from families with an income of less than $20,000.

So that’s very low low-income families, right? So this Congressman introduced this bill to make students who receive Pell Grants eligible for their own $1,200 stimulus check.

He said, “Colleges and universities across the country have shutted to limit the spread of COVID-19. While these closures have protected students from illness, they have also forced many students to return home to families who simply cannot afford the unexpected financial burden of suddenly having one, two or even three additional mouths to feed. The Student RELIEF Act seeks to alleviate the economic hardships of our nation’s most vulnerable families by making Pell Grant students and their families eligible for the $1,200 direct stimulus payments they did not receive the first time around.

So CARES Act stimulus excluded adult dependents, such as college students, but also older adult dependents. So, what this Congressman is seeking to do is to get a $1,200 stimulus check for those students.

Is This a Trend?

And this is kind of a trend, isn’t it? I told you about Marco Rubio’s bill that he proposed, to give stimulus payments to another group of people who were excluded by the CARES Act. Those American citizens who are married to somebody without a social security number.

Kind of a similar line of thought here with Representative Rush’s bill, to give a stimulus check to those, another group of people who were excluded by the CARES Act stimulus.

So, is this a sign of things to come? Are we going to see kind of maybe not the whole blanket stimulus payments we saw in the CARES Act, maybe it’s these more targeted type things.

I sure hope not.

Because I know that if they try to do it very targeted, there will be some people who fall through the cracks.

Secretary Mnuchin did say when asked about this, he basically implied that, “No, if there is another round of stimulus, it would go to the same people who got it before.”

But please keep in mind that Treasury Secretary Mnuchin is not the king, that Donald Trump is not the king. Everybody has to be on board with the next stimulus idea. So please keep that in mind.

Operation Warp Speed

Basically the White House has planned their initiative to get a coronavirus vaccine developed, tested, approved, and distributed to 300 million doses by January 2021. They’re calling it Operation Warp Speed.

What does that imply? That implies speed.

And truly that goal to get a vaccine for COVID-19, gone through all the processes, all the trials, the approval and the distribution for the 300 million doses by January 2021.

That is lightning fast for a vaccine.

Usually vaccine developments, I’m not an expert in this, but from what I’ve read, usually that takes years. Years, and years, and years and years to develop a safe and effective vaccine.

But due to the crisis White House has this Operation Warp Speed that wants to get it done basically like that.

Nevertheless, the FDA this morning, or at least guidance outlining its conditions for approving a COVID-19 vaccine, including requirement that any vaccine be at least 50% more effective than a placebo in preventing the disease.

FDA said it will not reduce its standards or cut corners in its review to approve a vaccine.

I’m supportive of that. Yes, I like the idea of Operation Warp Speed. I want a vaccine to come out just as soon as anybody does. But it really has to be safe.

We talked about Remdesivir yesterday, and Gilead’s price points they’re putting on that. That’s more of a treatment, this is a vaccine, different thing.

COVID-19 and Business Insurance

Finally, let’s talk about COVID-19 and insurance. So as we all know many businesses, especially low margin businesses, restaurants, and places like that have been hurt severely by the coronavirus pandemic.

A lot of these businesses have something called Business Interruption Insurance that pays them when their business has been interrupted. And COVID-19 has obviously interrupted their businesses to no fault of their own.

So they’re making these claims to insurance companies, “Hey, we want to be paid out on our business interruption policy because our businesses have certainly been interrupted.”

However, Wall Street Journal reports that insurance companies have largely refused to pay claims under this coverage because there’s usually a requirement in the policy that there be physical damage.

And more than half of these business interruption policies enforced today, specifically exclude viruses. However, for those policies that don’t exclude viruses, they typically still have some kind of physical damage requirement.

However, the argument that these companies are making for how they still have physical damage out their businesses is saying that the coronavirus sticks to surfaces and therefore renders their workplaces unsafe.

Lawyers looked to past cases that say, “Events rendering a property unusable may constitute property damage.”

For example, in New Hampshire, the state’s highest court said physical loss didn’t include only changes that could be seen or touched. But in the case in New Hampshire cat odor permeating a condominium building was enough for there to be considered physical damage for coverage under a business interruption policy.

And some of these lawyers for these companies are saying, “Well look, COVID-19 is a lot scarier thing than cat odor. We think the same line of thinking should apply here.

We can get past that physical damage requirement by showing, “Hey, there’s a virus going around. You can’t see it, but it sticks to surfaces. It’s in the air, it makes people feel unsafe coming to our business.”

Hundreds of lawsuits have been filed and lawyers anticipate many more.

Masks

This is from Goldman Sachs and it’s kind of on the issue of health. So, don’t look too much into this, because I don’t know really how much Goldman Sachs knows about health.

But basically Goldman Sachs says, “That a national mask mandate, like a mask you wear for COVID could raise the percentage of people who wear masks by 15 percentage points, cutting the daily growth rate of cases by one percentage point and saving the economy for a 5% GDP head.”

So again, it’s Goldman Sachs. Last I heard they weren’t disease experts.

But nevertheless, they crunched their numbers somehow, probably using a ton of assumptions. And that’s what they come up with.

So if you have any people in your life who don’t want to wear masks, tell them, “Hey, it’s for the economy.”