A third stimulus check seems likely, but it won’t necessarily be the $1,400 amount that everyone keeps talking about.
(CBS Detroit) — A third stimulus check is part of the Biden administration’s $1.9 trillion economic relief package. Aside from the $1,400 payment, the American Rescue Plan also includes extended unemployment benefits, a bigger child tax credit and billions more dollars to stop the spread of COVID-19. These and other programs aim to support millions of Americans dealing with financial troubles brought on by the pandemic. They’re also designed to support the economy as vaccinations continue. How the ongoing debate in the Senate proceeds will determine how much money actually reaches the public. The President and politicians from both sides of the aisle favor another stimulus check. That it polls very well may have something to do with it. However, Republicans and some centrist Democrats have pushed back against the overall price tag. Other specific aspects of the plan, like the minimum wage hike and the unemployment insurance increase, have also been questioned. Democrats control both houses of Congress and are willing to pass stimulus legislation on a straight party-line vote. And budget reconciliation lets them sidestep the filibuster in the Senate and move the stimulus package forward with a simple majority. The 51-50 split — including Vice President Harris as the tiebreaker — leaves them no margin for error. It also gives moderate Democrats like Joe Manchin of West Virginia more power to make changes. The topline $1,400 number that’s drawn so much attention seems destined to become a reality. But the actual amount that people receive could change based on income restrictions, the number of dependents and other factors. The previous two stimulus checks phased out for individuals with an adjusted gross income (AGI) over $75,000 per year and married couples with an AGI over $150,000. (AGI is the total of one’s wages, interest, dividends, alimony, retirement distributions and other sources of income minus certain deductions, such as student loan interest, alimony payments and retirement contributions.) For every dollar of income over the threshold, the previous two stimulus payments decreased by five percent. So the $1,200 payment from the CARES Act shrank to $0 for incomes over $99,000 ($198,000), and the $600 from the second stimulus shrank to $0 for incomes over $87,000 ($174,000). The idea of changing the annual income requirement has gathered some steam. In early February, Manchin and Republican Senator Susan Collins of Maine proposed an amendment aimed at “targeting economic impact payments to Americans who are suffering from the effects of COVID–19, including provisions to ensure upper-income taxpayers are not eligible.” To that end, the Biden administration has agreed to phase out checks more quickly. So while the threshold would remain at $75,000 ($150,000), those earning $80,000 ($160,000) or more would receive nothing. If the phase out progresses at a constant rate — in this case,32 percent — that would mean people would receive $.32 less for every $1 they earned over the limit. The idea behind targeting stimulus checks to reach lower-income people is to better ensure that the money gets spent in the broader economy rather than saved. According to a survey from the Federal Reserve Bank of New York, the average percentage of the first stimulus payment that a household spent on essentials decreased as income increased.
