It was largely believed that the third stimulus package of $1.9 trillion would offer stimulus checks to most Americans. However, if Wednesday’s negotiations are anything to go by, then coronavirus stimulus checks for many adults could be at risk.
Q4 2020 hedge fund letters, conferences and more
It is being reported that during the Wednesday Senate negotiations over the eligibility for the next round of stimulus checks, President Joe Biden indicated making the direct payments more targeted.
As per the Institute on Taxation and Economic Policy (ITEP), the new plan, if approved, would cut out about 12 million adults from receiving the payment. This new plan likely comes due to the demand from some Senate Democrats of making the relief package more targeted to lower-income families.
Under the new plan, the stimulus check amount remains unchanged at $1,400. However, the coronavirus stimulus check amount would phase out faster.
Under the original $1.9 trillion proposal, a full payment of $1,400 would go to individuals making less than $75,000 ($2,800 to couples with adjusted gross income of less than $150,000). No payment would go to individuals making $100,000 or more (couples earning $200,000 or more).
After the Wednesday negotiations, however, the maximum income threshold has reportedly been reduced. Some Senate Democrats have reportedly proposed phasing out the payment to individuals making more than $80,000 (couples earning more than $160,000).
As per ITEP, the new income threshold would mean about 11.8 million adults and 4.6 million children wouldn’t qualify for the stimulus payment. ITEP calculates that about 280 million Americans would qualify for payment under the new plan.
Further, ITEP notes that the new plan, if approved, would have no impact on most people, including the bottom 60% of Americans, who need the help most.
Nothing official so far
As of now, there is no official announcement of the new plan, or if the cuts have been incorporated. White House press secretary Jen Psaki, however, told reporters that Biden is “comfortable” with the negotiations and that there would be more negotiations.
"He has been open from the beginning for that being more targeted and for there to be a steeper cliff at which that ramp-down ends," Psaki said.
It is also reported that there is consent on raising federal unemployment benefits to $400 per week through the end of August.
Republicans, on the other hand, continue to oppose the relief package. Mitch McConnell, Senate Minority Leader, said that he hopes all Republicans would vote against the bill. This means Biden would need the support of all Senate Democrats to pass the relief package.
"The Democrats had a choice. They chose to go it alone, tack to the left and leave families' top priorities on the cutting-room floor," McConnell said.
Senate Majority Leader Chuck Schumer seems confident on getting the bill approved. The Senate could vote on the bill by Friday.
