The first debate between President Donald Trump and his Democratic challenger Joe Biden last week failed to address many paperback subjects affecting Americans.
In fact, they were barely mentioned.
But one thing is clear: Americans have long been bad with their finances. According to a NextAdvisor survey, more than half have been worried about their money since the coronavirus pandemic started, and 54% of the unemployed said they had no plans to see the end of increased unemployment benefits after the July deadline.
The third quarter of the year ended with unemployment at a relatively high 7.9%, and Congress has yet to reach an agreement on the next coronavirus bailout package.
No new stimulus checks were approved. An eviction cliff looms as the mortgage deferral options expire. January will return to over $ 1 trillion in student loan debt. A majority of households with children are juggling financial stress and care, while many schools across the country remain closed, according to a recent survey.
So what’s the plan?
“For a lot of people who didn’t think politics or politics mattered, I think that now more than ever we are learning that they do. The decisions our elected leaders make matter. They trickle down to us, ”says Farnoosh Torabi, co-editor of NextAdvisor and host of the So Money podcast.
The bitter initial debate between the two men running for the presidency did not provide any answers to these open questions. And it’s unclear after President Trump tested positive for the coronavirus last week that the two remaining presidential debates will even take place.
But there will be at least one more debate between the two camps: Vice President Mike Pence and Democratic Vice President Kamala Harris will meet in Salt Lake City on Wednesday for their own and only debate.
Since this may be the only time both sides discuss financial issues, here are five topics we’d like to hear about in the VP debate.
1. Is another stimulus package on the way?
The House of Representatives, Senate and White House have been negotiating a new stimulus package for weeks, but it is unlikely that they will reach a compromise before election day, November 3, and that Republicans will not resume talks until after the election which makes many wonder what’s next.
Before the negotiations failed, the Democratic majority house passed a new version of the Heroes Act last week, which it had previously approved in May – and which also went nowhere. The new measure would provide $ 2.2 trillion in new stimulus spending.
But after that, the House of Representatives took a hiatus, and the Republican-controlled Senate is unlikely to vote on the proposal. Republicans are in favor of a smaller $ 1 trillion incentive, and the White House is somewhere between the two sides.
“What I want to know from the candidates is how they propose the executive and legislative branches and what they should do with regard to an additional stimulus package,” says Jill Schlesinger, certified financial planner and moderator of the “Jill on Money” podcast. “That is the main problem to look out for.”
Stimulus checks
Democrats and Republicans seem to agree that a second economic check of up to $ 1,200 per taxpayer and extra money for dependents is required. But no legislation to approve another round of payments has been pushed. If you haven’t received a stimulus check from the March Stimulus Legislature, the Internal Revenue Service has just extended the deadline to register to November 21 on who is considered a dependent and how old you must be to qualify.)
Increased unemployment benefits
The $ 600 additional unemployment benefit paid weekly by the federal government on top of regular state unemployment benefits ended in July. After Congress failed to agree on a plan to extend it, President Trump ordered a temporary measure of $ 300 in increased unemployment benefits for six weeks, but that money started running out in early September.
Millions of Americans are still unemployed, and there is currently no additional funding for unemployment benefits until the end of 2020.
In their current proposal, in addition to state benefits, the Democrats want to keep increased unemployment benefits of $ 600 per week – just like the Coronavirus, Aid, Relief, and Economic Security (CARES) Act in March – but Republicans want this number to be so high, significantly smaller.
2. Does the student loan deferral end?
In late August, Trump signed an executive order extending the temporary freeze on federal student loan repayment and interest charges until the end of the year.
This was essentially a three-month extension of the relief for student loans under the CARES Act, which was originally due to expire on September 30th.
So if you have a federal student loan, you don’t have to worry about the repayment or interest until January 2021. However, questions remain as to what will happen after the grace period.
Borrowers have more than $ 1.5 trillion in total student debt, most of which is held by the federal government. Resuming repayment of this enormous amount of outstanding debt is a major economic problem for many voters.
3. Will the wage tax deferral be extended?
Starting in September, some workers raised their paychecks thanks to an executive order deferring payroll taxes. However, these taxes were not abolished – their payment was just postponed.
Typically 6.2% of a worker’s total income goes into social security, but the deferral postpones the withholding of these social security taxes until January 2021. If this deadline is not extended, those who received the deferral will have to pay these taxes next year.
Remember, you will only see a difference in your paycheck once your employer has opted for the program.
4. What happens to the protection for tenants and homeowners?
Millions of Americans across the country are struggling to make rental and mortgage payments due to the coronavirus pandemic. New research suggests that 30 to 40 million renters in America are at risk of losing their homes in the next few months.
And nearly 3.7 million homeowners are in forbearance programs in mid-September, 22% less than the May high of 4.7 million, according to the latest data from Black Knight, a mortgage technology and data company. That’s 7% of all active mortgages.
Here is a breakdown of the protections put in place for renters and homeowners this year and what will come as we deal with the ongoing effects of the pandemic:
Mortgage Forbearance
Americans financially affected by COVID-19 this year were given the option to hit the pause button on government-sponsored mortgage payments by taking a forbearance under CARES law. This means that homeowners with eligible mortgages can apply for up to 180 days of temporary suspension of all or part of their mortgage payments.
The law came into force at the end of March, which means that all deferral agreements made at the time have already expired or may expire very soon. According to Black Knight, more than 2 million forbearance plans should expire in September.
There is an option to extend a deferral for an additional 180 days, but the request must be made before the initial deferral period has expired. It’s not automatic.
Recent data suggests that around six million homeowners have been lenient at some point since the pandemic began.
Unlike federal agencies, private lenders are not required to be lenient. Last June, Schlesinger told NextAdvisor, “Even if you don’t have a loan that’s backed by a federal agency, it’s definitely worth reaching out to your lender and asking for your indulgence.”
“If you just don’t do anything and miss out on payments, it will affect your creditworthiness and your chances of getting credit in the future,” she said.
Eviction ban and rental assistance
Renters across the country are protected from evictions until the end of the year as long as they complete the necessary paperwork and meet certain eligibility requirements.
State evacuation protection expired under the CARES Act in late July, but the U.S. Centers for Disease Control and Prevention used their health agency to put in place a temporary evacuation moratorium to limit the spread of COVID-19.
Aside from the House of Representatives’ new proposal to extend the moratorium, there is no information on whether the measure will continue beyond 2020. The updated Heroes Act provides evacuation protection for tenants and financial support for apartment owners to compensate for loss of rent.
5. When do jobs come back?
Just over half of the jobs lost in March and April have been fed back into the economy, but with coronavirus uncertainty still dominating the nation, a full recovery seems a long way off.
One of the top priorities for the next president will be to bring back jobs.
Both candidates promise millions of jobs through infrastructure investments, but have different approaches.
Trump plans to cut more taxes and regulations to boost employment growth, according to his campaign agenda. Biden pledges to raise taxes on the rich (anyone who makes more than $ 400,000 a year) and businesses, arguing that more government spending will help Americans during this period of high unemployment.
“We need to talk about how we can get people back to work.” says Torabi. “I think it’s great that they want to propose incentives and all these tax breaks, and I know we have to put the patch on things now, but what’s the longer-term plan?”
