Retail leaders are cheering the latest development in what has been a contentious process to get much-needed relief to cash-strapped Americans amid the coronavirus pandemic. The U.S. House of Representatives on Monday voted to pass a bill that would increase stimulus payments to individual Americans from $600 to $2,000.
“Any time you inject more cash into the American economy — these kinds of direct payments have been shown to improve economic activity, [particularly] in the short term,” said Matt Priest, president and CEO of the Footwear Distributors and Retailers of America, drawing a comparison to the direct impact of annual tax refunds on consumer spending.
“People get tax refunds and they go out and spend that on discretionary items, including footwear — as we’ve consistently seen,” Priest added. “I’m always blown away by the fact that when that money gets into the system, footwear retailers really see an impact on sales.”
Still, the bill to increase stimulus payments to Americans faces an uphill battle in the Senate, where it requires a two-thirds majority vote in order to make its way to President Donald Trump’s desk for signing.
Although Priest cautioned that it’s difficult to predict with any certainty the future of the bill, he suspects the stimulus payments will remain at $600.
“Now that [the bill] has passed the House, the pressure is on the Senate and on Mitch McConnell,” he said. “This is one of those areas where President Trump has an ability to galvanize his base on an issue. The question comes down to, ‘Will there continue to be enough pressure put on the Republicans to try to do something to get to a vote that would incorporate the $2,000 stimulus check?’”
Trump last week urged Congress to boost the stimulus payment from $600 to $2,000 with House Speaker Nancy Pelosi setting up Monday’s vote on the House floor.
Like many footwear industry leaders, Priest said that while the industry largely supports measures to get more economic relief to millions of Americans who are impacted by the global health crisis, there are significant questions concerning the long-term plans for the U.S. economy. It’s a sentiment that Steve Lamar, president of the American Apparel and Footwear Association reinforced today.
“COVID-19 has created havoc everywhere you look,” Lamar told FN in a statement. “We have long said that, until the economy is strong enough to sustain itself, Washington needs to keep the economy sustained through relief measures. The measure recently signed into law, and the increased stimulus check approved by the House this week, are just two steps in a long path to recovery and are welcome developments for struggling American workers, businesses, and consumers.”
He added, “But stimulus is not a ‘one and done affair’ and these measures are only a down payment on what the American economy needs to make it to the other side of this crisis.”
After much back and forth, President Trump this week signed a sweeping stimulus bill that would avert a government shutdown and infuse financial aid into the coronavirus-crippled United States economy.
A statement on Sunday from the White House showed that the relief package includes another round of direct payments to individuals as well as additional weekly unemployment benefits. It also provides loans to small businesses, assistance for renters and appropriations for coronavirus vaccine distribution, plus other provisions.
The $900 billion measure, which was paired with a $1.4 trillion bill to continue funding government agencies through September, did not include liability protections for businesses that were championed by Republicans or other Democrat-supported state and local funding.