Stimulus checks have long been an important mechanisms for both federal and state governments to draw upon in order to assist citizens in time of low economic downturn and rising expenses and inflation. Playing a significant role in the Covid-19 pandemic, stimulus checks not only provide immediate financial relief to citizens, but they also encourage spending which is essential in order to prevent a recession. Lately, there has been news of a new $725 stimulus program in California.
The role of stimulus checks in assisting families
Stimulus checks are generally drawn upon during critical moments of economic crisis. While they are often utilized in state initiatives, federal stimulus checks are not as common. During the COVID-19 pandemic, the federal government distributed three rounds of stimulus checks between March 2020 and March 2021. This past tax season was the last year you could claim the third stimulus check.
“Stimulus checks typically only happen when the economy is in really bad shape and consumers need a push to start spending money again,” LendingTree senior economist Jacob Channel told CBS MoneyWatch in November 2024. “That’s not really the case in the present.”
Recently, the US stock market took a hit due to the new tariffs imposed by the Trump Administration. Many investors fear a prolonged trade war may force the nation into a recession; however, according to President Donald Trump, Americans should anticipate this as merely a “period of transition.” Additionally, the consumer sentiment index from the University of Michigan has dropped to its lowest point since November 2022. Despite this, it is unlikely the federal government will be releasing stimulus checks anytime soon.
California rolls out new $725 stimulus check round
Meanwhile, at the state level, California has recently rolled out a new round of stimulus checks from its relatively recent Family First Economic Support Pilot (FFESP). FFESP is a guaranteed income pilot program for parents or legal guardians of children aged 0 to 5 who live in specific Sacramento County zip codes and make less than 200% of the federal poverty line. For 12 months, 200 individuals chosen at random will get $725.00 a month.
The point of FFESP is to evaluate the long-term effects on families of providing guaranteed income to the eligible population. In addition to the monthly payments, families will have access to peer support groups, monthly financial webinars, one-on-one financial coaching, and connections to community-based organizations in their communities. United Way California Capital Region will work with the Sacramento County Department of Child, Family, and Adult Services (DCFAS) to administer and facilitate the pilot.
California has often taken on stimulus payment and other social welfare-program initiatives, including the Golden State Stimulus I & II programs administered by the California Franchise Tax Board during the Covid-19 pandemic. Regarding the FFESP program, the program is set to randomly select 200 applicants to partake in the program for 2025 with payments beginning to be distributed my mid-June this year.
DOGE to release $5,000 stimulus check?
If you do not live in California or are not part of the FFESP program, there may be some good news coming your way regarding stimulus payments. The new Department of Government efficiency (DOGE) has recently been rumored to be considering the release of a $5,000 stimulus payment to citizens if they meet their $2 trillion saving goal as part of the agency’s initiative to cut down on federal spending.
However, if this was to become a reality, the checks would need to be approved by Congress before they can be distributed to citizens. While a $5,000 stimulus payment would be most welcomed to the majority of taxpayers, many lawmakers believe that this additional money should rather go towards paying off the national debt instead of being distributed to consumers. However, it remains to be determined if this idea will manifest into reality.
