(TBEN Detroit) – A third stimulus check is a key part of President Biden’s $ 1.9 trillion economic relief plan. The direct payment of $ 1,400 has the backing of Democrats and Republicans and will likely remain in the final version of the bill. The US bailout, in its current form, also includes higher unemployment benefits, an improved child tax credit, and additional help for millions of Americans facing economic hardships caused by the COVID-19 pandemic. In progress. While a third check appears to be for bank accounts, the actual timing is still a bit unclear.
When could my stimulation check arrive?
The administration’s goal is to sign the American Rescue Plan by March 14. This is also when the current federal unemployment premium of $ 300 expires. Assuming President Biden was able to sign the relief package on March 14, direct deposits would likely begin the week of March 22, with checks starting to arrive the week of March 29.
But the House appears poised to pass the US bailout this week without change. House Speaker Nancy Pelosi recently reiterated her more aggressive schedule, saying the bill could be passed by the end of February. The Senate could then adopt it next week by a direct vote online. If so, the stimulus package could leave Congress before March 5 and be enacted on March 8. Direct deposits would start arriving in bank accounts on March 15, and checks would start mailing out on March 22. Both deadlines could be extended for a number of reasons.
What could be delaying my stimulation check?
One possible slowdown for the next stimulus check is the ongoing disagreement over the $ 15 minimum wage. Due to budget reconciliation, Democrats can bypass the Senate obstruction and pass the stimulus package by simple majority. That means 51 votes instead of 60, with Vice President Kamala Harris making the tiebreaker. But Democratic Senator Joe Manchin of West Virginia believes that more than doubling the federal minimum wage (currently $ 7.25 an hour) would place an undue burden on rural states. Instead, he proposed to increase the required hourly rate to $ 11. Kyrsten Sinema, a Democratic senator from Arizona, also pushed back. Without the votes of Manchin and Sinema, the US bailout is unlikely to reach the Senate. No Republican has come out in favor of the stimulus plan.
It is also unclear whether the proposed minimum wage of $ 15 can even be included in the bill, given the rules surrounding reconciliation. The process requires that all provisions be linked to the budget. And a valid argument can be made for or against. The parliamentarian of the Senate, who decides on these issues, will indicate whether the increase in the minimum wage is admissible. Democrats can then accept or ignore the decision.
What could reduce my stimulation test?
The increase in the federal minimum wage could be withdrawn in the interests of passing the larger package. But that’s not the only sticking point. The idea of reducing the annual income requirement to receive a stimulus check has gained momentum. In early February, Manchin and Republican Senator Susan Collins of Maine proposed an amendment to “target economic impact payments to Americans suffering from the effects of COVID-19, including provisions to ensure that high-income taxpayers do not are not eligible ”.
The previous two stimulus checks were phased out for people with Adjusted Gross Income (AGI) over $ 75,000 per year and married couples with AGI over $ 150,000. (The AGI is the total of your wages, interest, dividends, alimony, retirement distributions, and other sources of income less some deductions, such as interest on student loans, support payments, and pension contributions.) For every dollar of income over the threshold, the amount preceding two stimulus payments fell by 5%. Thus, the $ 1,200 CARES Act payment fell to $ 0 for incomes greater than $ 99,000 ($ 198,000), and the $ 600 of the second stimulus decreased to $ 0 for incomes greater than $ 87,000. $ ($ 174,000).
Late last week, Treasury Secretary Janet Yellen assured TBEN that Biden was looking to “make sure that [the next stimulus check is] targeted so that they reach those in need. You know, not to very high income people who don’t need it.
To this end, the Biden administration has considered lowering the income threshold to $ 50,000 ($ 100,000). Assuming the same five percent formula applied to the first two checks, a payment of $ 1,400 ($ 2,800) would actually be $ 700 ($ 1,400) with annual income of $ 64,000 ($ 128,000) and $ 0 with an annual income of $ 78,000 ($ 156,000).
The goal of lowering the income threshold is to ensure that more money is spent in the wider economy rather than saved. According to a Federal Reserve Bank of New York survey, the average percentage of the first stimulus payment that a household spent on basic necessities declined as income increased. The average percentage of the first stimulus payment a household saved increased as income increased. Heads of household earning $ 40,000 or less per year spent 22.3% on basic necessities and saved 31.2%. Heads of households earning more than $ 75,000 per year spent 14.7% on essentials and saved 40.8%. A survey last summer predicted that the second stimulus check would see this gap between spending and savings widen. The same dynamic could play out with the third check, if the income limits are not reduced.
Why do we need stimulation controls?
The economy shrank 3.5% in 2020, the biggest drop in a single year since the end of World War II. Weekly unemployment figures remain historically high, with 861,000 people applying for unemployment insurance for the first time last week. Another 516,000 people have requested assistance in the event of an unemployment pandemic. (A typical week before the pandemic saw about 250,000 new jobless claims.) At the end of January, about 18 million people were receiving unemployment benefits in one form or another. That’s one in nine workers. While the official unemployment rate is 6.3%, the actual rate is probably closer to 10%, considering all the people who have dropped out of the workforce.
An economic rebound depends on the widespread release of a COVID vaccine. But efforts to vaccinate the public have gone a bit slowly. Shortages and winter conditions have forced some areas to temporarily close vaccination centers and reduce vaccine delivery in recent weeks. Many of those who qualify have encountered problems making an appointment. On the bright side, the federal government began distributing the vaccine to some pharmacies earlier this month. And Dr Anthony Fauci, the country’s leading infectious disease specialist, believes vaccination will be open to everyone by July, when demand no longer exceeds supply. But mask-wearing and a general lack of normality could continue until 2022. Currently, COVID cases nationwide exceed 28 million, while deaths have exceeded 500,000.
Originally published Feb. 4 at 6:06 p.m. ET.