When President Donald Trump said there would be a second round of coronavirus stimulus checks from the IRS, the odds of it happening went up significantly. However, he still had to convince conservative Republicans who are worried about the federal deficit.
Now it sounds like he has as Senate Majority Leader Mitch McConnell made a comment that could cement a second round of coronavirus stimulus checks from the IRS, at least for one group of people.
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McConnell on second round of coronavirus stimulus checks from IRS
McConnell was asked at one of the three public events he attended in his home state of Kentucky on Monday whether the phase four package would include a second round of coronavirus stimulus checks from the IRS. He said it "could well" include more direct payments.
Mitch also provided some specifics on who might be eligible to receive a second coronavirus stimulus check from the IRS. He believes those who earn about $40,000 per year or less have been the hardest hit. That just increased the odds of low-income households receiving a second check dramatically.
McConnell said many of those who earn $40,000 a year or less work in the hospitality industry. He added that the industry, which includes hotels and restaurants, "got rim-racked" by the pandemic. Thus, a second coronavirus stimulus check "could well" be included in the phase four package.
Conservative Republicans have been the big holdout when it comes to convincing lawmakers to send a second stimulus check to the general public. Their big concern is the extreme levels of federal deficit spending Congress has pushed out to deal with the pandemic.
However, McConnell's comments line up with what we've been hearing from other GOP lawmakers and White House officials like National Economic Council Director Larry Kudlow. Those who are low income are more likely to be eligible for a second round of coronavirus stimulus checks from the IRS.
"One last boost" for the economy
We've also been hearing a lot about the expected timeline for the phase four stimulus package. July 20 is the date to watch because that's when Congress will be back working on legislation. The Senate is currently on recess, and the House of Representatives is doing committee work right now.
McConnell said during another event that he plans to put forward legislation for the phase four stimulus package after the Senate returns from recess on July 20. He said he will reveal "something which will be a starting point" and that they will be "dealing with the administration and the Democrats."
He also warned that he couldn't "comfortably predict" that there would be a sense of bipartisan unity like there was a few months ago when they passed the first three stimulus packages.
"The atmosphere has become much more political than it was in March, but I think we will do something," he said. "The country needs one last boost."
How much will the second coronavirus stimulus check from the IRS be?
Now that we have a better idea about those who might be eligible for a second coronavirus stimulus check from the IRS, the next question is how much it will be. McConnell didn't mention any amounts for the next check.
House Democrats passed the HEROES Act in May, and it included $1,200 checks, although it cast a wider net than the first round of checks. More people were eligible for the checks, including illegal immigrants.
Republicans are unlikely to agree to that, although President Trump has said he would like to see the second round of stimulus checks be more than what the Democrats suggested. If the Republicans can convince the Democrats to limit the number of households that will receive the checks, it is possible that they will be more than $1,200.
We already know that Senate Democrats support direct payments that are more targeted to those who need it most, so they may be easy to convince about the $40,000 upper income limit. The key question will be whether they can convince their House counterparts to agree to a lower income threshold than the first round of checks.
Another big question is whether Democrats will agree to a second round of checks that don't cover illegal immigrants. Republicans are unlikely to agree to send money to those who are here illegally.
What else might be in the phase four stimulus package?
While everyone wants to know if a second round of coronavirus stimulus checks from the IRS will be included in the next package, other provisions will also be included. Lawmakers are expected to address unemployment as the extra $600 in weekly federal benefits expires at the end of the money.
Democrats support an extension of the extra $600 in benefits, but Republicans would prefer to see the amount of weekly benefits reduced. They are focused on getting the economy back up and running, and that won't happen if people are unwilling to return to work because they get paid more on unemployment than they did on the job.
Republicans also want to see a temporary suspension of the payroll tax, although Democrats are unlikely to support that. Democrats may try to include student loan forgiveness. That does have a chance of receiving bipartisan support, although it may end up being lower priority than the other provisions.
State and local government aid may also receive support from both sides of the aisle, although Republicans are likely to want it restricted to extra expenses incurred as a result of the pandemic. They want to avoid digging out states that have been having budget problems for years.