Waiting on Another Federal Stimulus Check?

Prepare to keep waiting.

A flurry of dismal news including a somber May jobs report and a less than encouraging report from Federal Reserve Chairman Ben Bernanke sent stocks and spirits lower midweek. Traditionally, that combination of factors leads to talk of a federal stimulus to give the economy a bit of a shot in the arm.

In early 2008, with the country veering towards a recession (even though nobody wanted to call it that at the time), President Bush signed the Economic Stimulus Act of 2008. Under the law, low-to- middle class taxpayers were entitled to receive a stimulus check of up to $600 per qualifying adult and $300 per qualifying child; checks were mailed out in the middle of 2008. Taxpayers who did not receive a check in the mail but were otherwise entitled to a check could have the stimulus applied towards their taxes due in the form of the Rebate Recovery Credit .

The idea was to get cash into circulation by giving it to those who were most likely to spend it. All of that spending was supposed to buoy retailers and create jobs thus getting even more money into the economy. Cake, right?

Only it didn’t happen that way. Just a few months later, the effect of the stimulus package appeared to be to push the federal deficit to a then all high of $165.9 billion . The continued slowdown prompted our guy, Federal Reserve Chairman Ben Bernanke to advise Congressional leaders that “consideration of a fiscal package by the Congress at this juncture seems appropriate.” And despite the fact that Republican leaders were apprehensive about a second stimulus plan, preferring additional tax breaks, then President Bush was warming to the idea .

Despite a number of rumors that a second check would be mailed out in 2008, it didn’t happen. Then President Elect Obama had increased speculation about a second check when he stated days after his election :

Obama took care to say “stimulus package” and not “stimulus check.”  And that’s exactly what happened. A few months later, the American Recovery and Reinvestment Act of 2009 (sometimes called “ARRA”) was pushed through Congress. ARRA provided for a one time payment of up to $250 for retirees and disabled persons, referred to as the Economic Recovery Payment (ERP) . Eligible recipients received a check for $250 directly from the Social Security Administration, Veterans Administration or the Railroad Retirement Board, not from the IRS.

Waiting on Another Federal Stimulus Check?

Prepare to keep waiting.

A flurry of dismal news including a somber May jobs report and a less than encouraging report from Federal Reserve Chairman Ben Bernanke sent stocks and spirits lower midweek. Traditionally, that combination of factors leads to talk of a federal stimulus to give the economy a bit of a shot in the arm.

In early 2008, with the country veering towards a recession (even though nobody wanted to call it that at the time), President Bush signed the Economic Stimulus Act of 2008. Under the law, low-to- middle class taxpayers were entitled to receive a stimulus check of up to $600 per qualifying adult and $300 per qualifying child; checks were mailed out in the middle of 2008. Taxpayers who did not receive a check in the mail but were otherwise entitled to a check could have the stimulus applied towards their taxes due in the form of the Rebate Recovery Credit .

The idea was to get cash into circulation by giving it to those who were most likely to spend it. All of that spending was supposed to buoy retailers and create jobs thus getting even more money into the economy. Cake, right?

Only it didn’t happen that way. Just a few months later, the effect of the stimulus package appeared to be to push the federal deficit to a then all high of $165.9 billion . The continued slowdown prompted our guy, Federal Reserve Chairman Ben Bernanke to advise Congressional leaders that “consideration of a fiscal package by the Congress at this juncture seems appropriate.” And despite the fact that Republican leaders were apprehensive about a second stimulus plan, preferring additional tax breaks, then President Bush was warming to the idea .

Despite a number of rumors that a second check would be mailed out in 2008, it didn’t happen. Then President Elect Obama had increased speculation about a second check when he stated days after his election :

Obama took care to say “stimulus package” and not “stimulus check.”  And that’s exactly what happened. A few months later, the American Recovery and Reinvestment Act of 2009 (sometimes called “ARRA”) was pushed through Congress. ARRA provided for a one time payment of up to $250 for retirees and disabled persons, referred to as the Economic Recovery Payment (ERP) . Eligible recipients received a check for $250 directly from the Social Security Administration, Veterans Administration or the Railroad Retirement Board, not from the IRS.

Congressional Record

Newsweek

Reproducible Copies of Federal Tax Forms and Instructions, 2008

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