The House Democrats have come up with a stimulus plan that sort of rejects the Republicans’ demand to make the stimulus package more targeted. However, as a consolation, the Democrats’ plan offers coronavirus stimulus checks that phase out more quickly than proposed by Biden’s stimulus plan.
Coronavirus stimulus checks: new plan from House Democrats
In their plan introduced Monday, the House Ways and Means Committee said those making up to $75,000 (and couples up to $150,000) would get a full payment of $1,400. However, the direct payment amount would phase out more quickly than under previously proposed legislation.
Here’s what Charlie Munger had to say at the Daily Journal meeting
Charlie Munger spoke at the Daily Journal Corporation's Annual Meeting of Shareholders today. Although Warren Buffett is the more well-known Berkshire Hathaway chief, Munger has been at his side through much of his investing career. Q4 2020 hedge fund letters, conferences and more Charlie Munger's speech at the Daily Journal meeting was live-streamed on Yahoo Read More
As per the new legislation, individuals with an AGI (adjusted gross income) of $100,000 or more ($200,000 for couples) would get no payment at all. A point to note is that it is not the final structure, and it may change going forward.
“There is a discussion right now about what that threshold will look like. A conclusion has not been finalized,” Jen Psaki, White House press secretary, said.
This new proposed income structure is the same as was there in the first two rounds of coronavirus stimulus checks. Republicans, however, are asking for significantly narrowing eligibility. A Republican-backed proposal, if approved, would have excluded about 29 million households, who got the payment in the earlier rounds.
The Republican-backed proposal calls for giving stimulus checks of $1,000 to those making $40,000 or less (couples earning less than $80,000). Moreover, the payments phase out faster as well, giving no payment to those making more than $50,000 (couples earnings over $100,000).
This new plan from House Democrats should come as a disappointment for the Republicans, especially after President Joe Biden indicated that he is open to negotiations on lowering the income thresholds.
Treasury Secretary Janet Yellen reiterated the same on Sunday, telling CNN that the President is "willing to work with Congress to find a good structure for these payments.”
Will the new proposal win support?
Eligibility for stimulus checks is a key sticking point for the third round of payments. It is very important for Democrats to keep all members on board. Even with special budget rules, the party would need every Democratic vote for a simple majority in the 50-50 Senate.
Sen. Joe Manchin has called for a more targeted payment only to those who need it the most. However, Senate Budget Committee Chairman Bernie Sanders believes lowering the income threshold is “absurd.”
Thus, it will be interesting to see who all supports this new proposal from the House Democrats.
“While it is still our hope that Republicans will join us in doing right by the American people, the urgency of the moment demands that we act without further delay,” said Richard Neal, Chairman of Ways and Means, according to MarketWatch.
Along with stimulus checks, the proposal by the Ways and Means Committee also calls for unemployment benefits of $400 per week through August 29. Previously, the Biden administration called for unemployment benefits to last through September.