“The ability to pay off debts with stimulus checks is a wonderful gift that will help families survive another day,” said Jan Lepore-Jentleson, executive director of East End Community Services on Xenia Avenue, Dayton. “But it’s only temporary. They’ll likely be in the same boat next month. “

Will the hiatus in Congress affect the second stimulus test?

More than 6 million Ohio households received an initial round of economic impact payments last June, valued at $ 10.1 billion. according to the IRS. Initial payments were up to $ 1,200 per person and $ 500 per qualified child.

The IRS and the US Treasury Department began providing a second round of direct payments worth up to $ 600 per person per qualified child in late December.

President Joe Biden and most of the Democrats in Congress support a new $ 1.9 trillion COVID-19 relief package that includes direct payments for economic impacts worth up to $ 1,400 Claim will help families and workers struggle and small businesses in local communities.

“We have to invest directly in the people who make this country work,” said US Senator Sherrod Brown, Ohio, during his speech in the Senate late last month. “It helps people pay the bills, stay in their homes, and get through this downturn.”

Some Republicans, like R-Dayton’s Mike Turner, say direct payments have made it a lot easier for families and they support another round of redistribution.

“People continue to struggle with the effects of coronavirus shutdowns and need food, rent and support for their families,” he said. “The $ 1,400 payment has widespread support in Congress and I believe we should get it moving as soon as possible.”

Rep. Mike Turner and Rep. John Carter visit WPAFB Monday

In mid-June, nearly two-thirds of Ohioans who received, or expected to receive, a stimulus payment said they would use the money primarily for expenses such as groceries, take-away, housewares, and personal care products. according to the US Census Experimental Household Pulse Survey.

About 17% of residents said they would use or would use the direct payments to pay off debts, and about 18% expected that they would add the money primarily to their savings.

On average, Americans spent about a quarter to a third of their first stimulus checks in the first six weeks of receiving payments. said Scott Baker, associate professor of finance with the Kellogg School of Management at Northwestern University in Chicago.

Many people chose to save most of the money they received or use it to pay off debt, Baker said analyzed how people used their paymentstogether with researchers from Columbia Business School, the Booth School of Business at the University of Chicago and the University of Southern Denmark.

Buying habits for stimuli vary among groups with different incomes and financial resources, and recipients with little cash in the bank tend to spend more than half of their checks, while those with thousands of dollars in their accounts spend more than a tenth of their payments .

“Those who make more than $ 60,000 a year typically spend half as much as those who make $ 10,000-20,000 a year,” Baker said.

Stimulus recipients who spent the money tended to buy consumables and groceries and make payments on loans, rents and mortgages, he said.

Baker said he suspects many people will again save most of their second stimulus checks until more of the economy reopens and people are more comfortable going to restaurants, movie theaters, and travel destinations.

“Because of all of these savings, I don’t think the stimulus checks really help boost the economy,” he said. “Some people definitely need the checks, but since they are relatively untargeted, they tend to go to people who still have their jobs and income and don’t have many places to spend the money.”

WASHINGTON DC, March 17, 2020 - Photo taken on March 17, 2020 shows U.S. dollar banknotes in Washington DC, the United States.  The Trump administration on Tuesday expressed its intention to offer cash payments to working Americans as part of a stimulus package amid coronavirus outages.

WASHINGTON DC, March 17, 2020 – Photo taken on March 17, 2020 shows U.S. dollar banknotes in Washington DC, the United States. The Trump administration on Tuesday expressed its intention to offer cash payments to working Americans as part of a stimulus package amid coronavirus outages.

Photo credit: Liu Jie / Xinhua via Getty

Photo credit: Liu Jie / Xinhua via Getty

According to an analysis by Liberty Street EconomicsAt the beginning of the pandemic, there was a sharp increase in the US savings rate.

At the end of June, around 29% of stimulus payments were used for consumption, 35% for paying off debts and 36% for savings. after an analysis of the group , which publishes insights and analysis from New York Fed economists.

In one New York Fed special August pollOn average, the respondents expect to save about 45% of all second stimulus payments, to use 31% to pay off debts and to spend about 24%.

Families understand that saving is prudent to weather the next financial storm and they will save money if they can after paying their bills, Lepore-Jentleson said with East End.

But very low-income families that East End works with face strenuous challenges in meeting basic needs for food, shelter and transportation, she said.

“Believe me, very low-income households don’t spend their extra, precious stimulus dollars lightly,” said Lepore-Jentleson.