March 26, 2020
Topline: The Senate passed the largest spending bill in its history late Wednesday night after six days of back and forth — a $2 trillion package that injects financial aid into all parts of the American economy — with one of the core tenets of the aid package direct cash payments to working Americans and here’s how that will work:
- The direct cash payments — originally proposed by GOP leadership and championed by Treasury Secretary Steve Mnuchin — are meant to help everyday Americans weather the coronavirus crisis and ignite a boost in spending.
- Under the Senate bill, American adults would receive a one-time direct deposit payment of $1200 each, and $500 per child (couples would receive $2400).
- The payments would begin to phase out for individuals making over $75,000 (the phaseout begins at $112,500 for heads of household and $150,000 for married couples) at a rate of $5 for every $100 in additional income and cuts out completely for individuals making over $99,000 (it phases out at $198,000 for couples with no children and $146,500 for head of household filers .)
- A family of four, for example, would receive $3400 under the Senate bill.
- Low earning Americans are not excluded from the cash payments in the Senate bill like past GOP proposals.
- The Senate bill also includes a $600 per week across-the-board increase on top of what individual states pay for unemployment insurance for four months (Senate Minority Leader Chuck Schumer, D-NY, said Wednesday that the boost to unemployment insurance would extend to gig workers)
What to watch for: How soon you will get your check. The Trump administration is hoping to get the checks out within two weeks of the bill becoming law. However, it could take longer. In 2008, when Congress also sent money to Americans, it took two months for the checks to arrive. CNN reports it will “likely” take until May before checks are sent out.
The House isn’t expected to vote on the bill until Friday.
Further reading: How you can get your check, according to Forbes’ Personal Finance contributor Jim Wang: “With previous checks, you needed to file a tax return in the prior year. For example, you had to file a tax return for the 2007 tax return to get a stimulus check for the 2008 program.
“For the 2020 stimulus check, they would be based on 2018 tax returns, although the Senate bill contains a provision that a 2019 return could be used if you did not file a return for the 2018 tax year. (That’s a good reason, if you had income in 2019, but not 2018—say you’re a new college graduate—to get your 2019 return filed.)”
Surprising fact: People who receive Social Security as their only source of income would still receive the direct cash payments under the Senate bill, according to Axios.
Tangent: New York Times’ reporter Carl Huse writes about how the direct payments in the coronavirus stimulus bill came from an “unlikely source: conservatives.”
“It was a striking populist turn for a party that has been dominated for decades by small-government activists, including some who rose to political prominence in the wake of the Wall Street bailout and are now determined to steer federal help to the most vulnerable of their constituents,” writes Huse about Republicans backing direct cash payments.
Chief Critic: Former Democratic presidential candidate Andrew Yang made universal basic income — direct cash payments from the government to citizens — a key pillar of his campaign. He told The Guardian on Friday that he doesn’t think $1000 in cash payments during the coronavirus pandemic is enough: “A thousand dollars per person should be the baseline.”
“I think we should be looking at trillions of dollars of stimulus and the lion’s share of that should go to people,” he added.
Key background: This $1,200 per person number in the GOP bill doesn’t come out of thin air. One week’s pay for a typical full-time working American is $936, according to Labor Department data, as reported by the Washington Post .
Crucial quote: Schumer said the stimulus bill provides “unemployment insurance on steroids.”
Still, the New York senator added that he believed the $2 trillion stimulus bill “probably” wasn’t enough to protect workers and save the economy.