Senate Democrats passed their nearly $ 1.9 billion US bailout version of the bill on Saturday afternoon, but not before making some major changes to the version of the bill passed by the House of Representatives last week.
Some of the most notable changes between the two bills include dropping a provision to gradually increase the minimum wage to $ 15 per hour and reducing the number of people eligible for a $ 1400 incentive payment.
The value of the Federal Benefits for Improved Unemployment Insurance (UI) has also been changed to appease moderate Virginia Senator Joe Manchin of West Virginia, who has threatened not to support the bill. Just like in the House, no Republican lawmakers voted in favor of the legislation, saying it was unnecessary.
“This is not a rescue package for pandemic,” Senate Leader Mitch McConnell said on Friday. “This is a parade of left-wing pet projects they are going through during a pandemic.”
The bill adheres to many of the progressive provisions of the House’s version, adding a provision to make forgiveness for student loans tax-free between December 31, 2020 and January 1, 2026.
“Covid has influenced almost every aspect of life,” Senate Leader Chuck Schumer, DN.Y., said Saturday. “The U.S. bailout plan will provide more assistance to more people than anything the federal government has done in decades.”
Here are some important changes between the House and Senate versions of the bill that could affect your pocketbook.
Minimum wage
As expected, the provision to increase the minimum wage gradually to $ 15 per hour was stripped of the Senate bill after the parliamentarian, a non-partisan official who decides which bills are eligible to enter the upper chamber through reconciliation pass, last week determined that the provision does not comply with the standard legislation to pass with a simple majority.
It’s not clear that this would be the case anyway: Seven Democratic senators and Angus King, the Maine independent joining the Democrats, are voting against an amendment proposed by Senator Bernie Sanders, also independent, in Vermont to increase the minimum wage.
Stimulus payments
The bill provides funding for a third economic impact payment, valued at up to $ 1400 per individual and dependent.
Individuals earning an adjusted gross income (AGI) up to $ 75,000 (and married couples earning up to $ 150,000) are eligible for the full $ 1,400 each, plus $ 1,400 for each dependent. In the Senate version, payments phase out much faster than in the House version: No individual with an AGI of more than $ 80,000 or couples earning more than $ 160,000 will receive one. Households earning up to $ 112,500 will receive the full amount, which will be phased out to the amount of $ 120,000.
In the previous version of the bill, payments were completely phased out at $ 100,000 for individuals and $ 200,000 for couples. It is estimated that 12 million fewer adults will be eligible for a stimulus payment compared to previous rounds.
Many Americans were upset about the move to qualify for the highest income, calling it a ‘slap in the face’ of middle-class Americans counting on the money and no longer qualifying.
The payments are based on the income of 2019 or 2020, depending on when a taxpayer submits their tax return for 2020.
Unlike previous incentive payments, adult dependents, including college students, disabled adults, and elderly Americans, may qualify for a $ 1400 payment.
Student loans
The Senate bill contains a provision to make any forgiveness for student loans tax-free between 31 December 2020 and 1 January 2026. Exemption is usually treated as taxable income.
The Senate bill does not contain direct forgiveness of student debt, but it will make it easier for President Joe Biden to forgive $ 10,000 in student debt, as he has said he will, through executive action, if Congress does not. .
Unemployment insurance
The Senate bill would extend the federal supplement to unemployment benefits to $ 300 a week until Sept. 6, making the first $ 10,200 in UI received in 2020 taxable for households with incomes of less than $ 150,000.
This is different from the Home Account, which extended unemployment programs until August 29 and gave extra $ 400 a week in benefits. It did not include the provision not to make any of the benefits taxable.
The House will now have to sign off on the changes before the president can sign the bill.
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