President Joe Biden’s $ 1.9 trillion coronavirus relief plan is advancing, raising hopes for another round of stimulus checks for most Americans. THE House approved the bill at dawn last Saturday, and the legislation is already in the hands of the Senate.
In brief comments after the House vote, Biden said he expected “quick action” from the senators over the spending package, dubbed the American Rescue Plan.
“We have no time to lose. If we act now, decisively, quickly and boldly, we can finally overcome this virus ”, he said. “We can finally get our economy moving again. And the people of this country have suffered a lot for a long time. We need to alleviate that suffering. The American Rescue Plan does just that.”
The Senate started debate on the aid package on Friday, starting an effort to bring the final bill to the president’s desk before several major aid programs expire on March 14. While the 628-page bill is supported by all 50 Democratic senators, Republicans intend to delay its approval by forcing votes on dozens of amendments. The so-called “raw vote” may run until the weekend, although Republicans are unable to prevent the bill from being passed.
“We expect the approval of the COVID bailout bill in the Senate this weekend with the House to approve this version next week, sending it to the president for signature,” noted Benjamin Salisbury of Height Securities in a research note on Friday.
If the bill passes the Senate this weekend, analysts say, it could move quickly towards Biden’s desk for his signature. This could result in a third stimulus check arriving in the bank accounts of eligible people as early as the weekend of March 13, according to Chris Krueger of Cowen & Co.
“Next weekend, a couple who earn less than $ 160,000 may well have $ 2,800 deposited in their checking account,” he said in a research note.
Less checks?
Congress still needs to correct some wrinkles that emerged during the negotiations. Among the issues are income limits for stimulus checks, with a new deal between Biden and moderate Democratic senators, which would limit the number of families eligible for the $ 1,400 checks. The revised limits would make millions of Americans ineligible for payment.
Some lawmakers have also been pushing for more targeted stimulus checks, arguing that low-income families are more in need than middle- and upper-income families.
According to the pending agreement, confirmed by CBS News, direct payments of $ 1,400 would start to decrease by $ 75,000 for individuals, but would cut eligibility for singles earning more than $ 80,000. For couples filing a joint federal income tax return, phasing out would begin for those earning $ 150,000 and end at $ 160,000.
“I wanted to keep the income cap at the previous levels” – $ 75,000 for singles and $ 150,000 for couples – Senator Ron Wyden of Oregon said on Wednesday in a call to reporters. “And we were successful on that front.”
He added: “I would have preferred what we had before, but I don’t want to distract people from the basic achievement” of maintaining the $ 75,000 and $ 150,000 income limits.
Minimum wage issue
Another obstacle is a provision in the House measure that would increase the federal minimum wage to $ 15 an hour by 2025. The Senate bill will hardly include the increase after the Senate parliamentarian decided on Thursday that the salary increase cannot be included in the upper house version of the aid plan.
Faced with these obstacles, a “Plan B” to tax some large corporations that pay below an unspecified salary, as proposed by some Senate Democrats, is now off the table, a senior Democratic aide told CBS News.
“The project has an increasingly direct path to approval after a procedural decision removed the issue of the minimum wage from the table,” Height Securities analyst Benjamin Salisbury said in a research note. It gives the American Rescue Plan an 85% chance of passing the Senate and becoming law.
Although the loss of the wage increase is a blow to low-income workers, its withdrawal from the Senate talks will help accelerate approval of the bill by mid-March, analysts said. The Senate may vote on the package later this week, with the House then casting its final vote on the weekend of March 6 or during the week of March 8, according to analysts.
If approved, another massive injection of cash into the economy should help spur a recovery, with Oxford Economics chief economist Gregory Daco, forecasting growth of up to 7% in 2021 amid pent-up demand from consumers and businesses. That would be the fastest rate of economic expansion in the U.S. since the early 1980s,
Ticket before March 14?
Democrats are pushing to approve the bill before March 14, when the current $ 300 extra in weekly unemployment benefits is due to expire. A recently reached agreement in the Senate would extend the $ 300 increase through September, in contrast to the House bill that would increase the increase to $ 400 a week through August.
In addition to the $ 1,400 checks, the project would provide financing for small businesses, schools, cities and states; offering tax incentives to families with children; and increase government spending on COVID-19 testing and contact tracking.
Certainly, disputes or disagreements can still make the bill unfeasible. But Democrats are using a process called budget reconciliation to pass legislation, which means that only a simple majority in the Senate is needed for approval, instead of the 60 votes required by most bills to overcome a potential obstruction. In other words, Democrats do not need the support of Republican senators to approve the bailout plan.
IRS Schedule
If the bill is approved by March 12, the Friday prior to the expiration of the extra unemployment benefit, stimulus checks may begin to reach bank accounts from a few days to a week after that, based on the IRS deadline for distribute the second round of stimulus checks in December.
Earlier this month, the IRS said it is looking at the relief bill to prepare to distribute the next round of payments. “We are keeping our eyes on the hill,” said Ken Corbin, the IRS taxpayer’s chief experience executive, although he did not anticipate when the tax agency could distribute the checks.
The IRS depends on the taxpayer’s most recent income tax return to determine how much they should receive and when they can receive it. That’s why some tax experts are encouraging taxpayers to file your returns as soon as possible, especially if they have had a major life change, such as the birth of a child or the loss of a job or income in the past year.
Since the IRS officially began accepting tax returns on February 12 and will close the filing window on its usual April 15 date, the plan can be approved in the middle of the tax filing season.
If a taxpayer fails to file its 2020 tax returns before Congress approves its next relief bill, the agency is likely to rely on its 2019 tax return to calculate the payment of the stimulus check – and this 2019 return may not reflect the loss of income during last year’s economic crisis or a new child, for example. In this case, the taxpayer may not receive as much stimulus money as he is entitled to.
Income limits
A person’s income is the main determinant of whether they will receive a check, as well as the amount of the payment.
Payments would add up to $ 1,400 for a single person or $ 2,800 for a couple taking action together. Only individuals earning up to $ 75,000 will receive full payments, as will couples with incomes up to $ 150,000. Payments would decrease for rents above that limit.
Under the agreement with Biden, the Senate bill would cut singles with incomes in excess of $ 80,000 and couples in incomes in excess of $ 160,000. Under the first stimulus check, the cuts were higher, at $ 100,000 for individuals and $ 200,000 for couples.
Some lawmakers argued that checks should be directed to low-income families, citing surveys that show that high-income families are recovering from the economic impact of the pandemic. But other surveys signal widespread financial problems across the country, with the ranks of adults struggling financially last month, little changed from December, according to Morning Consult economist John Leer.
A third round of $ 1,400 checks would allow nearly 23 million adults to pay their expenses for more than four months without incurring further debt or consuming their savings, his analysis concluded.
“This third stimulus check is absolutely vital,” Colleen McCreary, credit director for Credit Karma, told CBS MoneyWatch. “I don’t see a world in which people have a solid financial position without some additional stimulus money.”