Apparently, Christmas was not over on December 25th. Two days later, our feckless Federal Government promised Americans piles of Christmas “goodies.” Oh, and incidentally, also to the Sudanese, Jordanians, Cambodians, Burmese, Egyptians, Pakistanis, Costa Ricans, Salvadorians, Guatemalans, Nicaraguans, Panamanians, Belizeans, and (indirectly) the Russians. We could go on.
Whether you prefer the legal name Consolidated Appropriations Act of 2021, or my moniker, “Son of Stimulus,” it is a behemoth. In a mere 5,593 pages, Congress broadcast our money far and wide, “saving” the world from ravages of the COVID-19 economic disaster, world politics, or whatever else.
Americans, who should always be first in line for our own tax dollars, are being treated with an appalling lack of respect. Both quantity and severity of our citizens’ problems have been underrepresented in this massive spending bill, which was made available for Congress to read and absorb for a staggering 4 hours prior to casting their “Aye” and “Nay” votes.
What could possibly go wrong?
Here is a brief look at a few of the good, bad, and ugly features affecting the finances of Average Americans:
- Low and middle-income Americans are slated to receive individual payments of $600, down from “Stimulus Part 1,” when the amount was $1,200 each. The current payment represents a classic “too little, too late” scenario. President Trump’s quest to increase the $600 payments to $2,000 was not abandoned upon signing the bill into law but faces opposition from both sides.
- Required Minimum Distributions, or RMDs, which were waived for 2020, are back in 2021 for Qualified and/or Inherited Retirement Account owners. A further extension of the moratorium would have been helpful to many taxpayers, but “Son of Stimulus” failed to address the issue.
- Expired Supplemental Unemployment Payments were restored at the weekly rate of $300, reduced from $600; welcome, but not extravagant, as too many businesses remain involuntarily closed.
- People with Flexible Spending Accounts (the notorious “use it or lose it” accounts) will have increased time to use unspent Plan funds from 2020. Instead of the current deadline to drain the 2020 accounts, owners will now be able to roll all remaining balances into their 2021 accounts, and this rule will extend again into 2022.
As you might surmise, in a 5,593-page spending and taxing bill are buried an embarrassment of rules and handouts, most of which affect relatively few taxpayers, and are not covered here. As more information becomes available, we will keep you informed about additional changes.
The dictionary definition of “feckless” includes ineffective; incompetent, and futile, having no sense of responsibility; indifferent; lazy. Thomas Jefferson told us, “The government you elect is the government you deserve.” Examining both the content and process of passing “Son of Stimulus,” it is easy to conclude that we deserve our feckless governing body. In all likelihood, we will have exactly that for the near future. Americans must take care of their own personal finances; we can help.
Van Wie Financial is fee-only. For a reason.
