With unemployment at a record high, and widespread business closures becoming permanent, Americans are desperate to know whether they should expect another economic stimulus check.
The good news is that Congress is currently negotiating the details of a second stimulus package. The Democrat-controlled House of Representatives proposed a bill for the second wave of stimulus funding on May 15. The bill is currently making its way to the Republican-controlled Senate, where it will likely be watered-down before it is voted on.
Keep reading for details on the yet-unfinished stimulus package…
What’s Included In The Package?
The second package, which is called the Heroes Act, takes a multifaceted approach to tackling the coronavirus situation. The Heroes Act would lengthen the expiration of enhanced unemployment benefits from July 31 of this year to January of 2021. This means unemployment payments would continue at $600/week.
But Republicans take exception to the generous unemployment payout, worrying that elongated $600 weekly payments do not incentivize people to return to work. GOP senators hope to negotiate unemployment down to $250 to $300 per week.
The Act would also expand the employee retention tax credit, which incentivizes businesses to keep workers on payroll. The bill also adds funds to the Paycheck Protection Plan and the US Postal Service, all part of an effort to keep business running.
While the push to bolster business is certainly a bipartisan priority, President Trump has threatened to veto any bill that attempts to bail-out the Postal Service, one of the country’s oldest and most dependable public programs which could plummet into bankruptcy if not immediately reinforced by an act of Congress. Provisions to buttress the ailing service could be a snag in passing the bill in the Senate.
The bill also includes a budget for directly tackling the coronavirus, setting aside $75 billion for testing and $1 trillion for healthcare workers’ salaries.
When and How Much?
Federal Reserve Chair Jerome Powell has urgently recommended additional relief measures, as has the International Monetary Fund, goes further, warning of a global recession on par with the Great Depression if world powers do not respond swiftly.
Heeding the call, the Heroes Act is 50% larger than its predecessor, the CARES Act, wracking up a proposed expenditure of $3 trillion. Some congressional Republicans agree that further stimulus is necessary, but would prefer to cut the budget to $1 trillion. Others, meanwhile, would rather wait and see the full effect of the CARES Act before any further stimulus legislation is passed.
According to presidential aides who have spoken with The Wall Street Journal, the package will likely be complete by July.
Who Can Get the Stimulus Check?
The bill has not yet been passed in the Senate, so specific payments will likely be altered in the negotiation process. But the House version of the package outlines additional personal stimulus payments as follows:
Individuals who made less than $75,000 in 2019, (or 2018 if they haven’t yet filed their taxes), should receive $1,200. As with the first stimulus check, there will be a sliding scale to determine payments for those who made more than that amount. This section of the bill is generally unchanged from the CARES Act.
The bill differs drastically from the last stimulus package when it comes to family payments. The CARES Act provided $500 per child aged 16 and under. The Heroes Act provides $1,200 per dependent. This means anyone who is labeled a dependent, whether a child, a college student, or even a disabled relative who is under the care of the filing individual, could be entitled to their own $1,200 payment.
The bill also stipulates retroactive payments for dependents who were not compensated by the last package, a key reason behind the much-larger budget.
Heads of households will receive the full $1,200 for income of up to $112,500, and married couples will each receive the full amount if their combined income is less than $150,000.
Households with many dependents should be warned that the maximum payment is $6,000 per household, meaning a total of five family members will count towards the stimulus payment.
One of the most significant differences from the CARES Act is that those without a Social Security number can now qualify for the stimulus payment. People who don’t have an SS number can use their individual taxpayer identification number to qualify.
But Will the Bill Pass?
In its current form, it is unlikely that the Heroes Act will make it through the upper chamber of Congress. And with President Trump’s threats to veto any package that does not meet his standards (see: Postal Service bailout), the Senate will likely amend the Heroes Act in a way that is most amenable to the President, to prevent a potential veto.
Small-government Republicans have already decried the massive spending required of the package, and Senate Majority Leader Mitch McConnell has labeled it a Democratic “idealogical wish list.”
McConnell has recognized the need for another package, but is anxious to pump the breaks on federal spending until the full effect of the stimulus can be measured. Rumors have also circulated that the White House could release its own stimulus proposal, which Senate Republicans can use as a roadmap for amending the Heroes Act.
Still, McConnell says that decisions will be made on the Heroes Act in the coming weeks, but warned that if it passes it will be the “final” stimulus package of the coronavirus era.