President Joe Biden’s $ 1.9 trillion coronavirus relief plan is moving forward and waiting for another round of stimulus checks for most Americans. He House approved the bill last Saturday early, and legislation is already in the hands of the Senate.
In brief comments after the House vote, Mr Biden said he expected a “swift action” from senators on the spending package, dubbed the American Rescue Plan.
“We don’t have time to waste. If we act now, decisively, quickly and boldly, we can finally get ahead of this virus,” he said. “We can finally get our economy moving again. And the people of this country have suffered too much for too long. We need to alleviate that suffering. The American Rescue Plan does exactly that.”
The Senate began debate on the relief package on Friday, giving a boost to get the final bill to the president’s office before several key relief programs expire on March 14th. While the 628-page bill has the support of the Senate’s 50 Democrats, Republicans intend to slow it down by forcing dozens of amendments. That so-called “vote-to-branch” could be extended until the weekend, though Republicans will not be able to block the passage of the bill.
“We hope the Senate approves its COVID bailout bill this weekend with the House to approve this version next week, sending it to the president for signature,” said Benjamin Salisbury of Height Securities. , in a research note Friday.
If the bill goes through the Senate already this weekend, analysts say, it could move quickly to Mr. Biden’s table for signature. This could result in a third stimulus check landing on eligible bank accounts as early as the weekend of March 13, according to Chris Krueger of Cowen & Co.
“Next weekend, a couple earning less than $ 160,000 could have deposited $ 2,800 into their checking account,” he said in an investigation note.
Fewer checks?
Congress has yet to resolve some wrinkles that have arisen during the negotiations. Among the problems are the income limits for stimulus checks, with one new agreement between Mr. Biden and moderate Democratic senators who would limit the number of households collecting checks to $ 1,400. The revised limits would make millions of Americans ineligible for payment.
Some lawmakers have also pushed for more specific stimulus controls, arguing that lower-income families have more needs than middle- and upper-income families.
According to the pending agreement, confirmed by CBS News, direct payments of $ 1,400 would begin to be phased out to $ 75,000 for individuals, but the eligibility of single people earning more than $ 80,000 would be cut. For couples filing a joint federal income tax return, the phasing out would begin for those earning $ 150,000 and ending at $ 160,000.
“I wanted to keep the income threshold at previous levels” – $ 75,000 for singles and $ 150,000 for couples – Sen. Ron Wyden of Oregon said Wednesday in a call to reporters. “And we’ve got it on that front.”
He added, “I would have preferred what we had before, but I don’t want to distract people from the basic accomplishment” of keeping the $ 75,000 and $ 150,000 income thresholds.
Issuance of the minimum wage
Another problem is a House provision that would raise the federal minimum wage to $ 15 an hour by 2025. It is unlikely that the Senate bill will include the increase after the The Senate MP ruled Thursday that the pay rise cannot be included in the upper house relief plan version.
Faced with these hurdles, there is a “plan B” to tax some large companies that pay below an unspecified salary, as proposed by some Senate Democrats. now off the table, a senior Democratic aide told CBS News.
“The bill has an increasingly direct path after a procedural decision removes the issue of the minimum wage from the table,” Benjamin Salisbury, an analyst at Height Securities, said in a research note. It gives the U.S. bailout plan an 85% chance of going to the Senate and becoming law.
While the loss of the pay rise is a severe blow to low-income workers, their withdrawal from negotiations in the Senate will help accelerate the passage of the bill in mid-March, analysts say. According to analysts, the Senate could vote on the package later this week and the House will cast its final vote on the weekend of March 6 or the week of March 8.
If approved, another massive injection of money into the economy should help rebound, with Oxford Economics US economist Gregory Daco forecasting 7% growth in 2021 amid demand accumulated by consumers and businesses. This would be the fastest rate of economic expansion in the United States since the early 1980s,
Passage before March 14?
Democrats are pushing for the bill to pass before March 14, when the extra $ 300 in weekly unemployment benefits is expected to expire. A newly reached agreement in the Senate would extend the $ 300 boost until September, in contrast to the House bill that would raise the increase to $ 400 a week through August.
In addition to the $ 1,400 checks, the bill would provide funding for small businesses, schools and cities and states; offer families with children a tax credit; and increase government spending on COVID-19 testing and contact tracking.
Of course, disputes or disagreements could still derail the bill. But Democrats use a process called budget reconciliation to pass legislation, which means only a simple majority in the Senate is needed to pass it, instead of the 60 votes required by most laws to overcome a potential hurdle. In other words, Democrats do not need the support of Republican senators to approve the bailout plan.
IRS Chronology
If the bill is approved on March 12, the Friday before the extra unemployment benefit expires, the incentive checks could start accessing bank accounts from a few days until the following week, depending on the deadline. distribution of the second round of IRS stimulus controls in December.
Earlier this month, the IRS said it was watching the relief bill to prepare to distribute the next round of payments. “We’re looking closely at the hill,” said Ken Corbin, who is primarily responsible for taxpayer experience at the IRS, though he didn’t predict when the tax agency could distribute the checks.
The IRS relies on a taxpayer’s most recent tax return to determine how much they should receive and when they could receive it. That’s why some tax experts are urging taxpayers to do so submit your statements as soon as possible, especially if they had a major life change, such as the birth of a child or the loss of a job or income last year.
Because the IRS officially began accepting tax returns on Feb. 12 and will close the filing window on the usual April 15 date, the plan could be approved in the middle of the tax filing season.
If a taxpayer does not file their tax returns by 2020 before Congress passes their next relief law, the agency is likely to rely on their 2019 tax return to calculate the payment of their stimulus check and that the 2019 statement does not reflect the loss of revenue during last year’s economic crisis. or a new child, for example. In this case, a taxpayer may not receive as much incentive money as he or she is entitled to.
Income limits
A person’s income is the main determinant of whether they will get a check as well as the amount of the payment.
Payments would amount to $ 1,400 for a single person or $ 2,800 for a married couple filing jointly. Only people earning up to $ 75,000 would get the full payment, as would married couples with incomes of up to $ 150,000. Payments would decrease for income above this threshold.
Under the agreement with Biden, the Senate bill would cut single people with incomes above $ 80,000 and married couples earning more than $ 160,000. According to the first stimulus check, the limits were higher, with $ 100,000 for individuals and $ 200,000 for married couples.
Some lawmakers have argued that controls should target lower-income families, citing research that shows higher-income families are recovering from the economic impact of the pandemic. But other research indicates widespread financial pain across the country, with ranks of adults experiencing financial hardship last month little changed since December, according to economist John Leer of Morning Consult.
A third round of $ 1,400 checks would allow nearly 23 million adults to pay their expenses for more than four months without collecting more debt or eating up their savings, the analysis found.
“This third stimulus control is absolutely vital,” Credit Karma CEO Colleen McCreary told CBS MoneyWatch. “I don’t see a world where people have their financial base with no extra money to stimulate.”