President Joe Biden’s $ 1.9 trillion coronavirus control plan is progressing, raising hopes of another round of stimulus controls for most Americans. The House has taken the bill early last Saturday, and the legislation is now in the hands of the Senate.
In brief remarks after the House vote, Mr. Biden said he hoped for “swift action” from senators on the spending package called the US bailout.
“We have no time to waste. If we act decisively, quickly and with courage now, we can finally get ahead of this virus,” he said. “We can finally get our economy going again. And the people of this country have suffered far too much for too long. We need to alleviate that suffering. The American bailout is doing just that.”
The Senate began debate on the aid package on Friday, an attempt to get the final bill to the president’s office before several major aid programs expire on March 14. While the 628-page law has the backing of all 50 Senate Democrats, Republicans are trying to slow its passage by enforcing it. votes on dozens of amendments. That so-called “vote-a-rama” could continue into the weekend, although Republicans cannot block the bill.
“We expect the Senate to pass its COVID bailout bill with the House this weekend to pass this version next week and send it to the president for signature,” Height Securities’ Benjamin Salisbury noted in a Friday investigation note.
If the bill passes through the Senate this weekend, analysts say, it could quickly go to Mr. Biden’s office for his signature. According to Chris Krueger of Cowen & Co. could lead to a third stimulus check ending up in eligible people’s bank accounts as early as the weekend of March 13.
“Next weekend, a couple earning less than $ 160,000 could get $ 2,800 in their checking account,” he said in a research note.
Fewer checks?
Congress has yet to get rid of some of the wrinkles that emerged during the negotiations. Among the issues are income limits for the stimulus controls, with a new agreement between Mr. Biden and moderate Democratic senators, which would limit the number of households eligible for the $ 1,400 checks. The revised limits would make millions of Americans ineligible for the payment.
Some lawmakers have also pushed for more targeted stimulus controls, arguing that lower-income households have more needs than middle- and higher-income households.
Under the ongoing deal, confirmed by CBS News, the $ 1,400 direct payments would begin to taper down to $ 75,000 for individuals, but single people making more than $ 80,000 would no longer be eligible. For couples filing a joint federal income tax return, the phase-out would begin for those making $ 150,000 and end at $ 160,000.
“I wanted to keep the income threshold at the previous level” – $ 75,000 for singles and $ 150,000 for couples – Oregon Senator Ron Wyden said Wednesday in a meeting with reporters. “And it worked.”
He added, “I would have preferred what we had before, but I don’t want to distract people from the fundamental performance” to keep the $ 75,000 and $ 150,000 income thresholds.
Minimum wage issue
Another problem is a provision in the House measure that would raise the federal minimum wage to $ 15 an hour by 2025. Senate law is unlikely to see the post-hike increase. Senate MP ruled Thursday that the pay rise cannot be included in the version of the reception plan for the upper room.
In light of those roadblocks, a ‘Plan B’ is to tax some large corporations paying below unspecified wages, as suggested by some Senate Democrats. now off the table, a senior Democratic assistant told CBS News.
“The bill has an increasingly direct path to passage after a procedural decision removes the minimum wage issue,” elevation control analyst Benjamin Salisbury said in a research note. He gives the American bailout an 85% chance of passing the Senate and becoming law.
While the loss of the pay rise is a blow to low-income workers, the removal from Senate negotiations will help speed passage of the bill in mid-March, analysts said. The Senate could vote on the package later this week, with analysts saying the House will cast its final vote on the weekend of March 6 or the week of March 8.
If passed, another massive injection of money into the economy should spur a revival, with US chief economist Gregory Daco of Oxford Economics predicting growth of up to 7% by 2021 amid subdued consumer and business demand. That would be the fastest rate of US economic expansion since the early 1980s,
Transition before March 14?
Democrats are pushing to pass the bill by March 14, when the current additional $ 300 in weekly unemployment support will expire. A newly reached deal in the Senate would extend the $ 300 increase through September, contrary to the House law that would raise the increase to $ 400 a week through August.
In addition to the $ 1,400 checks, the bill would provide funding for small businesses, schools, and cities and states; offer families with children a tax advantage; and increase government spending on COVID-19 testing and contact tracing.
Certainly, disputes or disagreements can still derail the bill. But Democrats use a process called budget reconciliation to pass the legislation, meaning only a simple majority in the Senate is required for approval, rather than the 60 votes required for most bills to get a potential filibuster. to win. In other words, Democrats don’t need the support of Republican senators to approve the bailout.
IRS timeline
If the bill passed on March 12, the Friday before the additional unemployed aid expires, incentive checks could end up in bank accounts anywhere from a few days to a week after, based on the IRS’s time frame for dividing the second round. of incentive checks in December.
Earlier this month, the IRS said it is looking at the redemption law to prepare for the next round of payments to be split. “We’re keeping our eyes on the hill,” said Ken Corbin, the chief taxpayer experience officer at the IRS, though he had not predicted when the IRS might distribute the checks.
The IRS relies on a taxpayer’s most recent tax return to determine how much they should receive and when they might receive it. That is why some tax experts urge the taxpayer submit their declarations as soon as possibleespecially if they have had a major change in their lives, such as the birth of a child or the loss of a job or income last year.
Since the IRS has officially started accepting tax returns on Feb. 12, and will close the filing window on the usual April 15 date, the plan could be passed midway through the tax filing season.
If a taxpayer doesn’t file their 2020 tax returns before Congress passes its next bill, the agency will likely rely on their 2019 tax returns to calculate the stimulus check payment – and that 2019 return may not reflect income losses during the economic crisis. from last year. or a new child for example. In that case, a taxpayer may not receive as much incentive money as he is entitled to.
Income limits
A person’s income is the main determinant of whether or not a check is received, as is the amount of payment.
The payments would be $ 1,400 for a single or $ 2,800 for a married couple filing jointly. Only individuals making up to $ 75,000 would get the full payout, as would married couples with incomes up to $ 150,000. Payments would drop for incomes above that threshold.
Under the deal with Mr. Biden, the Senate bill would cut off single people with incomes over $ 80,000 and married couples earning more than $ 160,000. At the first stimulus check, the cut-offs were higher at $ 100,000 for individuals and $ 200,000 for married couples.
Some lawmakers have argued that controls should target lower-income families, citing research showing higher-income families are recovering from the economic impact of the pandemic. But other research points to widespread financial pain across the country, with the ranking of adults experiencing financial difficulties last month having changed little since December, according to Morning Consult economist John Leer.
A third round of $ 1,400 checks would allow nearly 23 million adults to pay for their expenses for more than four months without incurring more debt or eating their savings, his analysis found.
“That third stimulus check is absolutely essential,” Colleen McCreary, Credit Karma’s Chief People Officer, told CBS MoneyWatch. “I don’t see a world where people will have their financial base without some extra stimulus money.”