Talks of a $40,000 income cap for the next coronavirus stimulus checks are growing louder with every passing day. It is believed that many in the Senate support this income cap, including Senate Majority Leader Mitch McConnell. However, there are many voices against the $40,000 coronavirus stimulus checks as well.
Coronavirus stimulus checks: $40k income cap won’t help?
McConnell, if he wants to add the $40,000 income cap, will face the strongest opposition from House Speaker Nancy Pelosi. During a recent news conference at the U.S Capitol, Pelosi expressed dissatisfaction at the $40,000 income cap for coronavirus stimulus checks.
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“I think there are many families, depending on the size of the family, so many different things, that $40,000 would have to be explained, justified, the rest,” she said.
Further, she noted that families earning over $40,000 might also need assistance “depending on their family situation.”
The HEROES Act, championed by Pelosi, offers a stimulus check of $1,200 to individuals earning up to $75,000. This proposal has already passed the Democrat-run House of Representatives in May.
Greg McBride, the Chief financial analyst for Bankrate, also suggests that a $40,000 cut-off for the next stimulus check may not address the issue fully.
As per a survey by Bankrate, about 49% of U.S. households witnessed a drop in their income during the coronavirus pandemic. Of those, only 17% say their income is back to normal, compared to 42%, who expect another six months before their income returns to normal, the survey says.
“Replacing this lost income will help keep consumers current on bills and maintain a level of spending that is beneficial to the economic recovery,” McBride says. “Getting money into those consumers’ hands is needed sooner rather than later,” McBride says.
Generous stimulus checks needed
There are also concerns that with the federal $600-a-week unemployment benefit expiring later this month, it would be very hard for many Americans to survive the coronavirus pandemic.
Amanda Novello, a senior economic policy associate with The Century Foundation, noted that about 25 million people will lose the additional unemployment insurance later this month. About 30% of Americans missed housing payments last month, the expert said.
“We shouldn’t be means testing—especially at such a limited level—in the face of such insurmountable need,” Novello said, possibly referring to the speculations about the $40,000 income cap, according to a Forbes report.
Novello says a person who earned $50,000 last year, has no savings, lost his job this year and is about to lose the federal unemployment benefit wouldn’t qualify for coronavirus stimulus checks if there is a $40,000 income cap.
“This policy says they don't qualify for assistance. That's just absurd,” Novello adds.
Novello suggests that things are similar to what it was three months ago. Thus, there is a need of a similar package, which includes a federal unemployment benefit, a moratorium on evictions and generous stimulus checks.