President Joe Biden’s $ 1.9 trillion coronavirus relief plan would provide a third round of federal stimulus checks to millions of Americans. Although, although lawmakers on both sides of the aisle have expressed support for the proposal, there is less agreement on who should be eligible for the $ 1,400 direct.
Democrats in Congress are moving forward by passing Biden’s relief plan through a process called budget reconciliation, which would allow the Senate to approve the effort without any Republican support. As the process progresses, House and Senate committees will discuss spending priorities before drafting and voting on legislation. It is expected to occur later in the week of February 8, according to Goldman Sachs economists.
On Feb. 4, the Senate approved a bipartisan plan introduced by Democratic Sen. Joe Manchin and Republican Sen. Susan Collins to block “higher-income citizens” from the next round of stimulus checks. However, it should be noted that the plan does not define “higher income”. The measure would ensure that “families who need it most” receive the checks, Collins said in a statement.
The amendment adds “the uncertainty of whether all Senate Democrats will support President Joe Biden’s full plan, with Joe Manchin already expressing doubts about the need to send $ 1,400 stimulus checks to those who don’t need the money “Paul Ashworth, chief U.S. economist at Capital Economy, told investors in a research note.
But the economy continues to struggle with layoffs and other setbacks. Almost 800,000 people he applied for unemployment benefits the week ending Feb. 6, which represents a slight drop from the previous week, the Labor Department said Thursday.
“An additional fiscal stimulus and a wider spread of the vaccine will allow the labor market to heal, but, as January’s employment data showed, current conditions are still quite weak,” Oxford economists said on Thursday. Economics, Nancy Vanden Houten and Gregory Daco.
House Democrats completed their bill increases this week with no major changes to Biden’s $ 1.9 trillion proposal, Height Security analyst Hunter Hammond wrote in a research note from the February 12th. The bill will go through more House committees, likely to reach a vote during the week of Feb. 22, he said. The analyst predicts the Senate will vote on the bill in early March.
This is what experts say about the next stimulus check and who may be eligible.
Why is income limits a problem?
The first two government stimulus checks ($ 1,200 for the first round and $ 600 for the second round) also set income thresholds that made higher-income families ineligible for payments. In the previous two rounds, single people earning up to $ 75,000 and married couples earning up to $ 150,000 received full payment.
People with higher incomes received lower payments as their incomes increased, until payments were cut completely for higher-income families. In the first round, the phasing out stood at $ 99,000 for single people and $ 198,000 for married couples.
In the second round, the elimination was slightly lower: $ 87,000 a year per single person and $ 174,000 per married couple. But this was a function of the smaller size of the checks, as the law reduced the two checks by 5% for every $ 100 earned above the income limits for full payments.
Recent economic research indicates that finances have stabilized for many middle- and upper-income families who have managed to work from home during the coronavirus pandemic. This is sparking a debate among lawmakers and experts as to whether direct aid should be directed to lower-income households, who are more likely to feel the continued economic impact of COVID-19 and its spread.
Households earning less than $ 78,000 a year quickly passed their second stimulus checks after receiving them in January, while those with incomes above that level spent most of the money, according to research of the Opportunity Insights Economic Tracker, a nonprofit group led by Harvard economics professor Raj Chetty.
“Since mid-June, the recession in jobs for higher-income families is over: employment has been the same as before the pandemic” because their jobs can be done remotely, he told CBS MoneyWatch Michael Stepner, Economist at Opportunity Insights. .
Are there new income limits for getting a check?
Not yet, as nothing has been decided. Still, Mr Biden has expressed a willingness to negotiate, with the president saying he would insist on $ 1,400 checks while suggesting he was willing to direct checks to people who need more help.
That could cause Democrats to lower the income threshold to qualify for a payment to single people earning $ 50,000 or less and to married couples with incomes of $ 100,000 or less, according to the Washington Post. If this occurs, it is likely that millions of households that received the two previous stimulus controls would not qualify for the third.
For example, the IRS said it sent 30 million payments to households earning more than $ 75,000 during the first round of stimulus checks. Under the income thresholds reported by the Washington Post, it is likely that many of these households will not qualify for the full $ 1,400 check.
But on Feb. 8, House Democrats pushed back those lower limits, proposing to keep revenue thresholds at the same level as for previous controls. This would ensure that full relief payments of $ 1,400 would go to people earning $ 75,000 or less, while couples earning $ 150,000 would be entitled to $ 2,800. Payments would decrease incomes above these levels, eliminating them completely for single people earning $ 100,000 and couples earning $ 200,000.
“Right now there is a discussion about what this threshold will be like. No conclusion has been finalized,” said Jen Psaki, White House press secretary.
What do the experts say?
Wall Street analysts don’t make many changes, as Goldman Sachs expected the same income thresholds as with the first checks: $ 75,000 for individuals and $ 150,000 for married couples.
Some lawmakers reject limiting payment to a smaller group of households, such as Vermont-independent Sen. Bernie Sanders.
“It’s absurd for some Democrats to think we should tell a worker who earns $ 52,000 a year that he’s“ too rich ”and can’t get the total $ 2,000 benefit we promised him,” he wrote on Feb. 7. on Twitter.
When would you receive a $ 1,400 check?
Not for several weeks, analysts predict. House and Senate committees must draft and vote on legislation. The relief law is likely to be passed in mid-March, Barclays analysts said in a Feb. 10 research note. Democratic lawmakers have said they want to pass a new relief law before the current $ 300 in additional weekly unemployment benefits expire on March 14th.
“As we wrote, we are still waiting for a $ 1-2 trillion stimulus package (an early estimate that seems very reasonable to the eye) in mid-March, when the most recent extension for unemployment, ”Barclays analysts wrote. “If policymakers need more time to finalize the details, they may consider a short-term extension” of unemployment benefits.
Once the relief bill has been approved, it must be signed by Mr. Biden. After that, the IRS would direct stimulus checks to eligible households. Under previous payment schedules, checks could arrive by direct deposit a week after Mr. Biden signed the invoice.
However, people who do not have bank accounts or payment information registered with the IRS should probably wait longer for paper checks or prepaid debit cards to arrive in the mail.
With reports from the Associated Press.