Another round of federal stimulus checks could soon be making their way to millions of U.S. taxpayers, with Treasury Secretary Steven Mnuchin signaling on Thursday that President Donald Trump is eager to move ahead with the payments.
Mnuchin announced Thursday that the White House and Senate Republicans have reached a "fundamental agreement" on an opening legislative proposal to provide Americans with additional coronavirus relief.
While the details aren't yet known, reports suggest that some Republican lawmakers could seek to limit the stimulus checks to lower-income households. Asked about another round of stimulus checks earlier this month, for instance, Senate Majority Leader Mitch McConnell noted that the people who have been hit hardest by the coronavirus pandemic are those earning less than $40,000 annually.
Limiting the checks to people who earn less than that amount, or $80,000 for married couples, would mean millions of middle-class taxpayers wouldn't qualify for the payments. An analysis of IRS data suggests that more than 60 million people, including married couples and single taxpayers, who qualified for the first round of stimulus checks could be excluded from the second round if the next bill reduces the income threshold. Altogether, the IRS has sent out more than 160 million stimulus checks, which the government calls "economic impact payments."
Here's what we know so far about a possible second stimulus check.
This stems from McConnell's statement at an event in early July saying he's open to more stimulus checks, but noting that he's focused on people who earn less than $40,000 a year.
That cap is not certain to survive wrangling on Capitol Hill. When asked about such a limit, House Speaker Nancy Pelosi questioned it. "I don't know where the $40,000 comes from," she said in a July news conference. "The $40,000 would have to be explained, justified and the rest."
Roughly 165 million married and single taxpayers fell below the income thresholds for the first stimulus checks, IRS data show. Under the Coronavirus Aid, Relief and Economic Security, or CARES, Act, single taxpayers who earn less than $75,000 and married taxpayers who earn less than $150,000 qualified for the full payments of $1,200 and $2,4000, respectively. Payouts declined incrementally until they phased out entirely for single people with annual income exceeding $98,000 and married couples earning more than $199,000.
Setting the income cutoff to qualify for a check at $40,000 for individual taxpayers — and assuming that would be doubled to roughly $80,000 for married taxpayers — would reduce the number of Americans eligible for a payment to about 106 million people, or about 60 million fewer people than received the first check.
Some economists support a more targeted approach to issuing stimulus checks, noting that higher-income households tend to save the money, especially during uncertain times, while lower-income households spend it, providing a greater boost to the overall economy.
"Lower-income households receive it, they spend it right away," said Moody's Analytics chief economist Mark Zandi in a conference call earlier this month to discuss the federal response to the recession caused by the coronavirus.
Yes. The proposed $3 trillion Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, Act would authorize another round of stimulus payments for most households. Yet while the bill was passed by the Democrat-controlled House in May, it's unclear whether the Republican-controlled Senate will adopt this measure.
The HEROES Act would offer a larger stimulus payment than the CARES Act. The measure calls for each member of a household to receive $1,200, including children. The income thresholds would remain the same as under the CARES Act, meaning that single taxpayers earning less than $75,000 and married taxpayers earning a total of $150,000 would receive the full payments. For instance, a family of four whose parents earn less than $150,000 would receive $4,800.
To see how much you would receive under the HEROES Act, you can check this stimulus calculator from OmniCalculator.
Depending on how negotiations go in Washington, new stimulus checks could be issued as early as August. President Trump's "preference is to make sure we send out direct payments quickly, so that in August, people get more money," Mnuchin told CNBC.
Mr. Trump told Fox News earlier this month he's in favor of providing a second round of stimulus payments that would be even larger than what the Democrats are proposing. Whatever the amount, it's clear that the White House — facing a tough re-election bid in November — favors a substantial payment.