President Joe Biden’s $ 1.9 billion coronavirus relief plan is moving forward, raising hopes of another round of stimulus checks for most Americans. The House passed the bill early Saturday, and the legislation will now pass to the Senate.
In a brief remark after the vote in the House, Mr. Biden said he hopes for a swift action by senators on the spending package, called the U.S. bailout plan.
“We have no time to waste. If we act decisively, swiftly and boldly now, we can finally get ahead of this virus,” he said. “We can finally get our economy back on track. And the people of this country have suffered far too much for too long. We need to alleviate the suffering. The American rescue plan is just doing it.”
The Senate will probably act on the measure next week and will have to iron out wrinkles that arose during the negotiations. The biggest problem is a provision in the House Measure that will increase the federal minimum wage by 2025 to $ 15 per hour. The Senate Bill is unlikely to increase after the The Senate MP decided on Thursday that the salary increase cannot be included in the version of the legal aid of the upper chamber.
“We may see some final attempts by progressive Democrats next week to include a wage increase in the current relief bill, but we ultimately do not see these efforts being successful,” Raymond James analysts wrote in a report.
Although the loss of the pay rise is a blow to low-income workers, its removal from the Senate negotiations could effectively speed up the bill, according to Hunter Security analyst Hunter Hammond.
“While this decision is disappointing for progressives, the calculation of the bill is made much easier for Democrats,” Hammond said in a research note to investors. ‘They will avoid a tough battle in the Senate, where two Democratic senators oppose an increase to $ 15 an hour (although at least one of them said he could support a smaller increase), which means the party is subject could be to a cruel internal fight over the subject. ‘
The bill also increases the weekly unemployment benefits from $ 300 to $ 400; provide funding for small businesses, schools and cities and states; offer families with children a tax break; and increase government spending on COVID-19 testing and contact tracing.
The Senate could vote on the package by the end of next week, and the House will then cast its final vote over the weekend of March 6 or during the week of March 8, Hammond predicted. Lawmakers want to pass the bill before March 14, when the extended unemployment benefit of $ 300 a week expires.
To be sure, disputes or disagreements can still derail the bill. But Democrats use a process called budget reconciliation to pass the law, which means only a simple majority in the Senate is needed for approval, rather than the 60 votes most bills need to overcome a potential filibuster. In other words, Democrats do not need the support of Republican senators to pass the bailout plan.
IRS timeline
If the bill is passed on March 12, the Friday before extra unemployed aid expires, incentive tests could begin to reach bank accounts, a few days to a week later, based on the IRS ‘time frame for distributing the second round of stimulus tests in December.
Earlier this month, the IRS said it was taking into account the relief bill to prepare for the spread of the next round of payments. “We are keeping a close eye on the hill,” said Ken Corbin, the IRS’s chief taxpayer experience, although he did not predict when the tax agency could distribute the checks.
The IRS relies on a taxpayer’s most recent tax return to determine how much they should receive and when they can receive it. That’s why some tax experts ask taxpayers submit their return as soon as possible, especially if they have had a major life change, such as the birth of a child or the loss of job or income last year.
Since the IRS officially begins accepting tax returns on February 12 and will close the filing window on its April 15 customary date, the plan could be implemented in the middle of the tax filing season.
If a taxpayer does not file their tax returns for 2020 before Congress passes its next relief bill, the agency is likely to rely on their 2019 tax return to calculate their payment from a stimulus check – and that the 2019 proceeds may not include revenue losses. during the economic crisis of last year. or for example a new child. In that case, a taxpayer may not receive as much incentive money as he is entitled to.
Income limits
The income of someone determines the most important question whether he / she will receive a check as well as the payment amount.
Like the previous two stimulus checks, the payments would be $ 1400 for a single person or $ 2800 for a couple filed jointly. But only individuals earning up to $ 75,000 will receive the full payment, as well as married couples with an income of up to $ 150,000. Payments will fall for income above the thresholds, and will phase out more than $ 100,000 for individuals and $ 200,000 for couples.
Some lawmakers have argued that the checks should be aimed at lower-income families, citing research showing that higher-income families are recovering due to the economic impact of the pandemic. But other research points to widespread financial pain in the country, and the number of adults experiencing financial difficulties last month has changed little since December, according to John Leer, an economist at Morning Consult.
A third round of $ 1,400 checks would enable nearly 23 million adults to pay their expenses for more than four months without incurring more debt or eating up their savings, according to his analysis.
“The third stimulus check is absolutely essential,” Colleen McCreary, chief executive officer of Credit Karma, told CBS MoneyWatch. “I do not see a world where people would have their financial position without extra money.”