Senate Democrats on Saturday afternoon approved their nearly $ 1.9 trillion version of the U.S. bailout plan, but not before making some major changes to the bill’s version of the bill. the House of Representatives last week.
Some of the most notable changes between the two relief bills include the drop in a provision to gradually increase the minimum wage to $ 15 per hour and reduce the number of people who qualify for an incentive payment of $ 1,400. .
The value of federal enhanced unemployment insurance (UI) benefits was also changed to appease moderate Democratic Sen. Joe Manchin of West Virginia, who threatened not to support the bill. As in the House, no Republican lawmaker voted in favor of the legislation, saying it was unnecessary.
“This is not a pandemic rescue package,” Senate Minority Leader Mitch McConnell, RK.Y., said Friday. “It’s a parade of left-wing pet projects going through during a pandemic.”
The bill maintains many of the progressive provisions of the House version and added a provision to make student loan forgiveness pass between December 31, 2020 and January 1, 2026 tax-free.
“Covid has affected almost every aspect of life,” Senate Majority Leader Chuck Schumer, DN.Y. “The American Rescue Plan will provide more help to more people than anything the federal government has done in decades.”
These are some of the major changes between the House and Senate version of the bill that may affect your pocket.
Minimum wage
As expected, the provision to gradually raise the minimum wage to $ 15 per hour was withdrawn from the Senate bill after the parliamentarian, a non-partisan official who decides which bills meet the requirements to pass the chamber high through reconciliation, determined last week that the provision did not comply with standard legislation must be complied with to pass it by simple majority.
It is unclear if it would have been included anyway: seven Democratic senators and Angus King, the Maine independent who is arguing with the Democrats, voted against an amendment proposed by Vermont Senator Bernie Sanders, also an independent, to raise the minimum wage.
Stimulus payments
The bill provides funding for a third payment for economic impact, worth up to $ 1,400 per person per dependent.
Individuals earning an adjusted gross income (AGI) of up to $ 75,000 (and married couples earning up to $ 150,000) are eligible for the full $ 1,400 each, plus $ 1,400 for each dependent. In the Senate version, payments are eliminated much faster than in the House version: no one with an AGI above $ 80,000 or couples earning more than $ 160,000 will receive it. Housekeepers earning up to $ 112,500 will receive the full amount and will be completely eliminated at $ 120,000 for applicants.
In the previous version of the bill, payments completely disappeared at $ 100,000 for individuals and $ 200,000 for couples. It is estimated that 12 million fewer adults will be able to get a stimulus compared to previous rounds.
Many Americans were upset by the decision to lower the maximum income eligibility threshold, and called it “slapping” middle-class Americans who had the money and no longer met the requirements. .
Payments are based on 2019 or 2020 income, depending on when a taxpayer files their 2020 return.
Unlike previous stimulus payments, dependent adults, including college students, adults with disabilities, and U.S. seniors, may be eligible for a $ 1,400 payment.
Student loans
The Senate bill includes a provision to tax-free any forgiveness of student loans between December 31, 2020 and January 1, 2026. Normally, forgiven debt is considered taxable income.
The Senate bill does not directly include student debt forgiveness, but would make it easier for President Joe Biden to forgive $ 10,000 in student debt, as he has said he wants, by executive action, if Congress fails to do so.
Unemployment insurance
The Senate bill will expand the federal unemployment benefit supplement to $ 300 a week through Sept. 6 and make the first $ 10,200 in UI received in 2020 not taxable for households with incomes below $ 150,000.
This differs from the House bill, which extended unemployment programs through Aug. 29 and gave an extra $ 400 in weekly benefits. It did not include the provision that none of the benefits would be taxable.
Now the House will have to sign the changes before the president can sign the bill.
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