Time is running out for the U.S. government to approve a second coronavirus relief package. So where does that leave Americans anxiously awaiting a second federal stimulus check — the cash payments that were distributed earlier this year? As lawmakers are negotiating a scaled-down deal, the popular stimulus checks aren't likely to be part of another round of aid.

Lawmakers could still pass a stimulus bill before the Senate adjourns for its holiday recess on December 18, but even the most generous of the two proposals under consideration would fall far short of the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act that was signed into law in March and which provided $1,200 checks to most Americans. 

Even with some form of economic stimulus by year-end, experts say those $1,200 checks are unlikely to recur — at least until after a new session of Congress begins in early January. The two new stimulus proposals — one from a bipartisan group of lawmakers and a less-generous plan from Senate Majority Leader Mitch McConnell — don't include funding for more direct payments to Americans, though they would provide money for unemployment aid and other support.

Given ongoing negotiations, Wall Street analysts say they believe there's a higher likelihood of a deal this month, with Heights Securities now pegging its chance at 75%, up from 50% before this latest round of talks. However, their analysis finds it "unlikely" that $1,200 checks will be included in the next package.

Instead, the next round will likely focus on extending unemployment benefits, which will otherwise expire for 12 million jobless workers on December 26, and on providing aid to businesses through the Paycheck Protection Program, Heights Securities said.

Some lawmakers are urging for the inclusion of another round of $1,200 checks, such as Senator Bernie Sanders of Vermont, an independent. Sanders said he wouldn't support the stimulus package unless it were "significantly improved."

The bipartisan proposal should "provide, at the very least, a $1,200 direct payment to working class Americans and $500 for their kids," Sanders said December 4. "Tens of millions of Americans living in desperation today would receive absolutely no financial help from this proposal."

Dueling plans

The first plan comes from a bipartisan group of lawmakers who are proposing more than $900 billion in stimulus spending. Democratic Senator Joe Manchin of West Virginia last week tweeted that the group would direct $288 billion to refresh the Paycheck Protection Program for small businesses and $180 billion in unemployment aid. However, the bill doesn't include funding for another round of stimulus checks.

Sen. Dick Durbin of Illinois, the second-ranking Democrat, indicated that excluding the checks, while assuring the inclusion of small-business aid and renters' assistance, was the only way to reach an agreement with Republicans who are putting firm limits on the bill's final price tag.

"The $1,200 check, it cost, we believe, nationally $300 billion to give you an idea," he said. "The Democrats have always wanted a larger number, but we were told we couldn't get anything through the Republicans, except this $900 billion level."

The second plan comes from Senate Majority Leader Mitch McConnell, who last week said there is "no reason" why another stimulus package shouldn't be passed.

Last Tuesday, McConnell unveiled a proposal for a "targeted relief package," which is far less comprehensive than the bipartisan effort from Manchin and other lawmakers. It would direct about $330 billion toward a one-month extension of two unemployment programs that expire on December 26, the Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs, as well as provide aid for the Paycheck Protection Program.

McConnell's proposal also would provide liability limitations for coronavirus-related lawsuits against businesses. But it also doesn't include another round of $1,200 checks. McConnell said he believes his proposal has the best chance of getting President Donald Trump's signature, adding, "We just don't have time to waste time." 

Speaker Nancy Pelosi told reporters at her weekly press conference on December 4 that she would like to attach new coronavirus relief legislation to a government funding omnibus, which must pass within the next week. She and Senate Minority Leader Chuck Schumer have voiced support for the $900 billion bipartisan proposal. 

Maintaining distance on key issues

Democrats and Republicans have remained far apart on several key issues, such as providing hundreds of billions in funding for states and cities that have been hit by declining tax revenues amid the coronavirus pandemic and are facing the hard prospect of mass layoffs of local government workers.

"A sentiment that appears to have grown over the weekend as new signs of bipartisan negotiations emerged among rank-and-file Senators," Height Securities analysts wrote in a recent report. "We caution that there is no expectation for a vote on this bill, but it is a sign that Senators are at least trying to see what is possible."

Even if Congress passes an aid bill that includes stimulus check funding, it could take weeks for the IRS to electronically deposit the funds into people's bank accounts, much less mail out millions of paper checks. It took between one and three months for most Americans to get their so-called Economic Impact Payment after the bill was signed into law this spring.

Without a new stimulus bill by year-end, many households and businesses would be left hanging, with millions set to lose their unemployment benefits by year-end and nationwide eviction moratoriums lapsing in the new year. The number of Americans applying for jobless aid rose for the second week in a row in November, a sign that the economic recovery is losing speed.

Millions of Americans are "heading for a bleak winter as safety nets expire," Nancy Vanden Houten, lead economist at Oxford Economics, said in a report. "We are pessimistic about the prospect of any significant near-term fiscal relief, and fear several social safety-net programs may be allowed to expire, affecting millions of households across the country."

Rather than try to break the months-long impasse on stimulus funding, experts think Congress is more likely to focus on passing legislation to finance the federal government after December 11, averting a government shutdown.

Deutsche Bank economists Peter Hooper and Matthew Luzzetti think Congress could thrash out a slimmed-down stimulus package early next year. Janet Yellen, President-Elect Joe Biden's choice for Treasury secretary, would likely push for a speedy bill, the economists told investors as word of her pending nomination first circulated. 

Still, Yellen wouldn't be taking on the role until the Biden administration is ushered in on January 20, and would also require approval from a politically divided Senate.

And a spokesman for President-elect Joe Biden's transition team pushed back on a report that Mr. Biden would support a quick relief bill even if it meant cutting back on some of the Democrat's priorities, such as aid for local governments, the congressional news source The Hill reported on November 23. "The President-elect fully supports the Speaker and Leader in their negotiations," transition spokesperson Andrew Bates said in a statement. 

What's holding up a bill?

House Democrats had passed an updated Health and Economic Recovery Omnibus and Emergency Solutions (HEROES) Act on October 1, but the $2.2 trillion bill ran into opposition from Republican lawmakers that has continued into December. 

Among the main disagreements: Whether the federal government should help cash-strapped cities and states weather the massive economic blow caused by the pandemic. The crisis could cause a $434 billion federal budget shortfall through 2022 under the most severe scenario, which would include a resurgence in the virus and a lack of more stimulus aid, according to Moody's Analytics.

The HEROES Act would have provided more than $400 billion in funding for state and local governments, but Republicans took issue with that aid, including President Donald Trump, who has objected to what he called "bailouts" for states helmed by Democrats. But the fact is many Republican-helmed states and cities are facing budget shortfalls as well, including Ohio and Texas, with the latter staring into a $4.6 billion budget hole. 

Democrats and Republicans also remain far apart on the issue of unemployment aid, with Democrats pushing for a renewal of the extra $600 in weekly pay provided under the CARES Act. Republicans have argued that enhanced jobless benefits are too generous and dissuade people from returning to work, despite a lack of economic data that supports the contention. 

Edge of a cliff

More certain is that millions of households face deepening financial problems, which are only likely to worsen once aid and protections from the CARES Act expire at the end of the year. 

About 6.7 million people could be evicted in the coming months as a federal eviction moratorium ends on December 31 according to a report from the National Low Income Housing Coalition and the University of Arizona. That would approach the number of people who lost their homes to foreclosure during the 2008 financial crisis and ensuing recession.

And almost 12 million jobless workers are slated to be cut off from unemployment aid the day after Christmas, according to an analysis by The Century Foundation, a progressive think tank. That cutoff would reduce total household income by about $19 billion per month, Oxford Economics said, potentially dragging down overall consumer spending as the economy is slowing.

More than 125 economists last month signed an open letter urging lawmakers to earmark for money for stimulus checks.

"Recurring direct payments will help families meet basic needs, boost state and local economies, and speed the recovery," they wrote in the letter. "Cash reaches millions who are struggling economically, including those who don't qualify for unemployment benefits."

—With reporting by The Associated Press.