Third stimulus check: Will you get a $1,400 check? – CBS News
President Joe Biden’s $1.9 trillion coronavirus relief plan would provide a third round of federal stimulus checks to millions of Americans. Yet while 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 payments.
Congressional Democrats are moving forward with passing Mr. Biden’s relief plan through a process called budget reconciliation, which would allow the Senate to pass the effort without any Republican support. As the process moves forward, House and Senate committees will discuss spending priorities before drafting and voting on legislation. That’s expected to occur later this week, according to economists at Goldman Sachs.
On February 4, the Senate approved a bipartisan plan introduced by Democratic Senator Joe Manchin and Republican Senator Susan Collins to block “upper income citizens” from the next round of stimulus checks. Notably, however, the plan doesn’t define “upper income.” The measure would ensure that “the struggling families that need it most” would receive the checks, Collins said in a statement.
The amendment adds “uncertainty whether all the 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 that might not need the money,” Paul Ashworth, chief U.S. economist at Capital Economics, told investors in a research note.
Here’s what the experts are saying about the next stimulus check and who may be eligible.
Why are income limits an issue?
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 households ineligible for the payments. In both earlier rounds, single people who earned up to $75,000 and married couples who earned up to $150,000 received the full payments.
People with higher earnings got smaller payouts as their incomes rose, until the payments cut off entirely for higher-income families. In the first round, the phaseout stood at $99,000 for single people and $198,000 for married couples.
In the second round, the phaseout was slightly lower — $87,000 a year per single person and $174,000 per married couple. But that was a function of the smaller size of the checks, given that the law reduced both 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 higher-income families. That is stirring debate among lawmakers and experts over whether the direct aid should be targeted toward lower-income households, who are more likely to feel the ongoing economic impact of the coronavirus pandemic.
Households earning under $78,000 annually quickly spent their second stimulus checks after receiving them in January, while those with incomes above that level socked away most of the money, according tofrom the Opportunity Insights Economic Tracker, a nonprofit group led by Harvard economics professor Raj Chetty.
“Since the middle of June, the recession in jobs for higher-income households is over — employment has been just like it was before the pandemic” because their jobs can be done remotely, Michael Stepner, an economist with Opportunity Insights, told CBS MoneyWatch.
Are there new income limits to get a check?
Not yet — 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 the checks to people who need the most help.
That could result in Democrats lowering the income threshold to qualify for a payment to single people who earn $50,000 or less and married couples with income of $100,000 or less, according to The Washington Post. If that occurs, millions of households who received the prior two stimulus checks likely wouldn’t qualify for the third.
For instance, 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’s likely many of those households wouldn’t qualify for the full $1,400 check.
But on February 8, House Democrats pushed back on those lower limits, proposing to keep the income thresholds at the same level as for the previous checks. That would ensure the full $1,400 relief payments would go to individuals making $75,000 or less, while couples earning $150,000 would be entitled to $2,800 relief payments. The payments would ratchet down for incomes above those levels, phasing out entirely for single people earning $100,000 and couples earning $200,000.
Mr. Biden has said he will not allow the per-person payments to fall below $1,400 but has indicated flexibility on the income thresholds.
“There is a discussion right now about what that threshold will look like. A conclusion has not been finalized,” said White House press secretary Jen Psaki.
What do the experts say?
Wall Street analysts aren’t banking on many changes, with Goldman Sachs expecting the same income thresholds as with the first checks — $75,000 for individuals and $150,000 for married couples.
Some lawmakers are pushing back against limiting the payout to a smaller group of households, such as Senator Bernie Sanders, an independent from Vermont.
“It is absurd that some Democrats think we should tell a worker making $52,000 a year that they are ‘too rich’ and cannot get the full $2000 benefit we promised,” he wrote February 7 on Twitter.
When would I get a $1,400 check?
Not for several weeks, according to analysts. The House and Senate committees must first draft and vote on legislation.
“At this stage, we will learn much more about the details, size and timing of particular provisions,” Goldman Sachs economists noted. “However, the key decision might not be made for another few weeks, when the Senate is likely to take up its version of the COVID-relief bill.”
There’s a strong likelihood that a stimulus package valued at $1.5 trillion to $2.25 trillion will pass by the end of March, according to Heights Securities analyst Hunter Hammond. “We expect there to be tension about the overall cost, both from a political standpoint and an economic one,” he said.
Lawmakers are keeping an eye on the March 14 expiration of expanded unemployment benefits, which include an extra $300 in weekly federal jobless aid. But that could “take until late March if things do not go smoothly,” Goldman Sachs noted.
Once the relief bill is passed, it must be signed by Mr. Biden. After that, the IRS will direct the stimulus checks to eligible households. Based on past payment schedules, checks could arrive via direct deposit within a week of Mr. Biden signing the bill.
However, people who don’t have banking accounts or payment information on file with the IRS might have to wait longer for paper checks or prepaid debit cards to arrive in the mail.
—With reporting by the Associated Press.
Published at Tue, 09 Feb 2021 14:07:00 +0000