Americans spent their stimulus checks on rent, utility bills

Stimulus package should be ‘targeted’ to Americans in need: Rep. Tom Reed

Rep. Tom Reed, R- N.Y., discusses the need for Democrats and Republicans to ‘work together’ in order to come to agreement on an economic relief plan.

As congressional Democrats debate which Americans should receive a third stimulus check in the latest coronavirus relief package, new data shows how recipients of the $600 payments distributed at the beginning of January spent the money.

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According to a report published by Apartment Guide, a majority of Americans — roughly 38% — used the cash to either pay for rent or cover their utility bills.

A significant number of adults also stashed the money away for future use: Close to 15% of respondents said they put the money into a savings account.

About 12% of respondents indicated they had used the money to buy food or groceries, including ordering from restaurants, and another 12% said they would put the money toward paying down credit card debt.

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Other common ways to spend the money included using it to pay for student loans (4%), car payments (3%), clothing (2.2%) and health care (2%). Americans barely spent the money to boost other struggling sectors of the economy, and only a tiny percentage used their stimulus checks on travel (1.33%) or entertainment (1.22%).

The report comes as Congress debates whether or not to narrow the eligibility criteria for a third $1,400 stimulus check. Under both the CARES Act and the $900 billion relief package passed in December, Americans earning less than $75,000 received the fully promised payments of $1,200 and $600, respectively.

But President Biden has indicated that he's open to lowering the income threshold in hopes of securing some GOP support for the nearly $2 trillion relief bill.

One proposal floated by senior Democrats includes lowering the threshold for the payments to begin phasing out above $50,000 for single taxpayers, $75,000 for people who file as the heads of households, and $100,000 for married couples, according to The Washington Post.

Treasury Secretary Janet Yellen said Sunday that Americans earning $60,000 per year should receive the promised payment.

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“The exact details of how it should be targeted are to be determined, but struggling middle-class families need help,” Yellen said during an interview on CNN’s “State of the Union.”

New research published by Opportunity Insights, a nonpartisan policy institute based at Harvard University, laid out evidence that the money would be most effective at boosting the U.S. economy if it targeted lower-income Americans.

The economists found that when the government sent out $600 checks as part of the $900 billion relief package Congress approved in December, spending among households making less than $46,000 rose 7.9% from Jan. 6 to Jan. 19 compared to the year-ago period.

By comparison, spending inched up just 0.2% for households making more than $78,000.

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