Millions of Americans missed the first stimulus check. Here's how Congress could fix the next one
On Mondays, Wednesdays, and Fridays, volunteers in a community outside Seattle set up tables on the street and open their laptops to help homeless people sign up for economic stimulus payments.Posted — Updated
Organized by a nonprofit called Angel Resource Connection, the group has registered about 400 people for the federal aid since April and are still finding those who haven't yet applied.
While more than 160 million Americans have received the federal payments, an estimated 12 million of the most vulnerable Americans may have missed out.
Most eligible adults received the money automatically. But very low-income people who don't normally file tax returns have to submit an online form so the Internal Revenue Service knows how to reach them.
It was an obvious problem from the start but wasn't addressed in the rush to pass the $2 trillion CARES Act this past March and get the money out as quickly as possible -- and hasn't been dealt with since, even as Congress considers a second round of stimulus checks.
Less than 60% of people at or below the federal poverty level had received their payment by late May, compared to nearly 78% of those with higher incomes, according to a study from the Urban Institute.
A second round of stimulus payments isn't a done deal. The White House is pushing for it, and Majority Leader Mitch McConnell said Tuesday that he's in favor of including them in the next stimulus package. But the GOP appears divided over the issue and there's a long way to go before the Republican-controlled Senate and Democratic-controlled House agree on a bill.
In the first round, individuals were due a one-time payment of up to $1,200 and families could receive $2,400 plus $500 per child. The size of the payments scaled down by income level and phased out altogether for higher-income Americans.
A Democratic proposal that passed the House in May would be more generous, providing $1,200 per child for a maximum payment of $6,000. It also would make undocumented immigrants, who were excluded from the first round, eligible for the money.
Yet it's clear that the government will need to take additional steps to get money to those who need it most. There's evidence that state governments have information on about 75% of those at risk of missing the first round of payments because they either participate in SNAP or Medicaid, according to the Center on Budget and Policy Priorities.
But Congress didn't specify in the CARES Act that data from those programs could be used to send out the stimulus payments. But if a new stimulus bill includes a second round of payments, lawmakers have a chance to tweak the program.
"I think what we're seeing right now is a huge disconnect between federal, state and local governments. But I think Congress should be more aggressive in directing efforts to find these people," said Elaine Maag, a research associate in the Urban-Brookings Tax Policy Center.
Groups like Angel Resource Connection that provide social services and meals to homeless communities found themselves left trying to bridge the gap over the past four months.
"It's an enormous problem that's been ignored," said Penelope Protheroe, the CEO of the nonprofit, who suggests Congress fund the outreach effort.
The group found other social service organizations willing to allow people to list their addresses so they have a location where the payment can be sent. They also provide a shuttle van to help people pick up their checks when they arrive.
"So many more people are homeless due to the pandemic," Protheroe added. "We need compassion in Congress to take a look at these people and not kick them while they're navigating the most challenging time in their lives."
Still, it's likely people will need access to the internet, which proved to be a hurdle for many low-income people, especially during a pandemic when tax assistance offices closed along with libraries that offered free internet.
The nonprofit group Tax Help Colorado shutdown in March, but moved its services online and is helping people over the phone. Director Courtney O'Reilly said many people she's worked with are still waiting to receive the money and confused about why.
The IRS created an online tool people can use to find out the status of their payment. But for some people, it has taken a while before it gives an estimated delivery date. That makes it hard to plan when budgets are already tight for so many who've lost their jobs.
"This is who the stimulus payments were designed to help, and some aren't able to access it," O'Reilly said.
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