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There’s still no stimulus deal. What does that mean for you?

Another stimulus package remains on hold until after the presidential election, threatening to delay urgently needed unemployment aid and a second round of $1,200 direct payments by at least two weeks. 

That would affect millions of out-of-work Americans who are struggling financially following a wave of job losses in the coronavirus recession, especially those in hard-hit industries like travel and hospitality who are relying on another stimulus check to make ends meet, experts say. 

With less than two weeks until the election, 1 in 5 Americans could be out of money by Election Day, data from consumer finance company Credit Karma shows. 

“People are going to be forced to make tough choices,” says Colleen McCreary, chief people officer at Credit Karma. “There are a lot of Americans who either haven’t been in this situation in a long time or have never had to face this reality. Many will have to sacrifice and prepare because it could get worse before it gets better.”

Republicans in the Senate are set to take up a $500 billion plan Wednesday that would reauthorize small business loans, reissue a federal boost to unemployment benefits, send more than $100 billion to schools and allocate funding for testing and vaccine development.

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Finances are top of mind for most Americans. In a separate survey, about 56% of Credit Karma respondents who plan to vote in November said economic recovery is the issue that matters most to them, topping other issues, including health care reform (45%), racial justice (38%) and immigration (29%). And more than one-third of respondents said they have seen their finances worsen during the pandemic.

For those who are suffering financial strains, McCreary suggests creating a budget and recommends that people reach out to creditors as soon as possible because lenders will likely have hardship plans available for those who need help, she said. 

How we got here

Congress hasn't approved additional coronavirus relief since March, when both chambers came to bipartisan compromises on a handful of bills that totaled more than $3 trillion, including one-time $1,200 checks to Americans and a $600 weekly unemployment boost.

But most of that relief dried up, including a loan forgiveness program for small businesses called the Paycheck Protection Program. Airlines have warned of mass layoffs and furloughs as their billions of dollars in federal payroll assistance expired. 

Republicans in the Senate are set to take up a $500 billion plan Wednesday that would reauthorize small business loans, reissue a federal boost to unemployment benefits, send more than $100 billion to schools and allocate funding for testing and vaccine development. The price tag of that bill is much lower than the roughly $1.8 trillion offered by the White House this month and the $2.2 trillion package Democrats put forward.

House Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steven Mnuchin continue to negotiate a bill.

Pelosi and Mnuchin talked by phone Tuesday, and Pelosi spokesperson Drew Hammill said their conversation "provided more clarity and common ground as they move closer to an agreement."

They plan to speak more Wednesday.

A caravan protest on unemployment benefits in New Orleans on July 22, 2020.

What should struggling Americans do?

Michael Foguth, president and founder at Foguth Financial Group in Brighton, Michigan, says more timewithout stimulus aid would be detrimental to many Americans. He’s advising his clients to focus on paying the minimum on debts. 

“While you’re waiting on a second stimulus check, remember to pay all the minimum payments on debt and bills,” Foguth said in a note. “If you have any money left over after paying the minimums, then put more money towards the debt with the highest interest.”

Experts advise taking a look at your expenses to identify where you can cut costs if you're facing unemployment. 

Pulling funds from retirement accounts out of fear isn’t the best immediate course of action, wealth advisers say. Experts typically advise against it, but the fallout from the crisis has left many people scrambling to pay their bills after being laid off or furloughed.

“A loan from your retirement account may be an option. However, ensure you understand any rules and penalties for doing so,” Foguth added. 

Contributing: Nicholas Wu

Contributing: Nicholas Wu and Christal Hayes