WASHINGTON — With money already heading to personal checking accounts, the impact of the latest round of stimulus funding is designed to have an impact on the economy — tires and rubber included.
Cash has begun pouring into the coffers of millions of Americans to the tune of $1,400 per person, and certainly some of that money will go to essentials like tire replacement and car repairs, observers are saying.
While legislators debated on the federal level about the pros and cons of another stimulus relief package, the ultimate new package created a $1.9 billion economic turbo charge.
In the dichotomy that is COVID-19, many people do not actually need the help while others are in the most desperate of desperate situations.
Many will simply use the extra cash to survive another month, some will pay off debt, some will put the cash away in savings and others will splurge.
Direct cash payments of $1,400 per person are going to people making $75,000 or less a year and $150,000 or less per year as a couple. The payments start to phase out with higher income.
The current stimulus payments are the biggest chunk of change being sent to Americans since the pandemic began.
Initial payments were $1,200 per person with $500 for eligible dependents. The second round was $600 per person and $600 per qualifying dependent. This time around, the $1,400 payment is going to eligible adults and qualifying dependents, the definition of which has been relaxed.
The Tire Industry Association (TIA) frequently fields calls from members trying to make it through the pandemic. While TIA CEO Roy Littlefield has yet to hear of any closures directly related to COVID-19, he said there are tire dealers who report they would have gone out of business without the help of the stimulus aid, including the Paycheck Protection Program (PPP).
Not only did PPP money help keep dealers afloat during the past year, the extra money provided to citizens through the overall stimulus efforts helped drive business to tire shops, Mr. Littlefield said.
"It's obviously going to put some money in people's hands who don't have it, which is a good thing," he said of the new round of funding. "They haven't been maintaining their cars. They haven't been buying passenger tires the way they probably should have."
The extra cash will provide some people the means to make those repairs, but Mr. Littlefield said those who are struggling will still pay rent and bills and put food on the table before making tire purchases.
That's just the way it is.
With dire conditions facing the country, TIA supports the stimulus package, which includes enhanced unemployment benefits.
Adding nearly $2 trillion to the federal deficit is not a good thing, but Mr. Littlefield said the country needs to balance immediate needs with the long-term impact.
"This is a case where this is a unique situation, so we support it," he said. "It's a high-priority for most business groups like ours to have a balanced budget, so we want to get back to that. And it's going to be difficult, especially in the short term."
The U.S. Tire Manufacturers Association (USTMA) also weighed in on the latest round of stimulus and highlighted how it will help the tire industry and its workers be safe in one particular way.
"USTMA and its member companies have been vocal about supporting a national plan to coordinate, expedite and expand vaccine distribution to get our economy on track and Americans back to work," the Washington-based trade group said.
"We are encouraged that the target timelines for full vaccination have been shortened and that the American Rescue Plan includes dedicated funding to ensure these more aggressive vaccine distribution plans can be met.
"U.S. tire manufacturers are a critical part of the American economy and ensuring the health and well-being of the nearly 100,000 dedicated individuals working to manufacture tires in the U.S. is of paramount concern to our members. Our industry stands ready to work with Congress and the Administration and applaud their focus on our nation's economic recovery," the trade group said.
The United Steelworkers (USW) union called the $1.9 trillion stimulus package "one of the most significant legislative initiatives of the 21st Century."
"This rescue plan is a groundbreaking set of much-needed relief efforts and significant improvements to our social contract, which will quickly put American workers, families and communities on the road to recovery," USW International President Tom Conway said.
While the $1,400 in cash is front-and-center in many people's minds, the USW also pointed to help for small business as well as extended benefits for the unemployed.
The wide-ranging bill also provides funding for housing, nutrition and child-care assistance as well as support for health care.
"This law puts us back on solid footing and is a major first step toward a rebirth of the American Dream," Mr. Conway said.
Without the stimulus funding, including PPP, Mr. Littlefield said many TIA members indicated they would not have survived.
"A lot of dealers said they couldn't have made it without it. They couldn't have kept their employees. They couldn't have stayed in business," he said.
"You look at what happened with restaurants and it's a pretty scary proposition."