- The latest unofficial stimulus check update we have is good news for anyone hoping that a new check is coming their way soon.
- The chatter had been that Senate Republicans were likely leaning toward including a $40,000/year income cap in new stimulus check legislation.
- A source close to the talks, however, has said that such a cap no longer appears likely.
When the chatter first started circulating that congressional leaders may limit a new round of stimulus checks to people making no more than $40,000 a year — a much lower income cap than was attached to the first round of checks — I predicted this ultimately wouldn’t come to fruition. If lawmakers feel that conditions are dire enough as a result of the coronavirus pandemic that more direct payments are warranted, better to target them at the most people so the checks do the most good, rather than narrowly aiming them at the people who need them the most. Because as we noted yesterday, for the people who need the checks the most — they’re the people most likely to spend the checks in ways that don’t fit what the Trump administration is hoping here. On things like bills and basic expenses, in other words, rather than splurging on things that would help get the economy going again.
Along these lines, a source identified as being “a person familiar with the talks” between congressional leaders (about the new stimulus legislation Congress is expected to take up next week) has told Bloomberg a key piece of news about new checks: An income cap at the $40,000 level is no longer seen as likely anymore.
Kentucky Republican and Senate Majority Leader Mitch McConnell a few weeks ago seemed to tip his hand with regards to new stimulus checks at an event in Kentucky, at which he said that “I think the people who have been hit the hardest (by the financial effects of coronavirus) are people who make about $40,000 a year or less.” It was thus assumed that an income cap along those lines would be baked into new stimulus legislation.
For now, that doesn’t appear to be the case anymore. However, one thing to watch as stimulus legislation that encompasses new checks comes together is how stimulus check payouts might instead be phased out as you slide up an income scale. For example, in the HEROES Act passed by the Democrat-controlled House of Representatives (which has gone nowhere in the Senate), stimulus check payouts would have been reduced by 5% for earnings above $75,000. That’s a way to achieve the same goal as an income cap.
While we wait to see what the actual terms are for new checks, one thing’s for sure: This is a rare legislative area where there’s actually wide room for agreement between Democrats and President Trump, both of whom want as many people as possible to get the biggest checks possible.