(CBS Detroit) – A third stimulus test is probably still pending. The $ 1,400 direct payment is a key part of President Biden’s $ 1.9 trillion economic aid package, which aims to reduce the economic impact of COVID and put the economy on better footing . It is backed by both Democrats and Republicans and appears to end up in the final version of the American bailout plan. The broader package also includes higher unemployment benefits, an improved child tax credit, and much more. While a third check appears to be destined for bank accounts, the specific timeline is still up in the air.
When could my stimulus check arrive?
The government continues to focus on signing the American rescue plan through March 14th. This is the day the current $ 300 unemployment benefit expires. Assuming President Biden can sign the aid package on March 14th, direct deposits will likely begin the week of March 22nd and checks will begin the week of March 29th.
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However, there’s a good chance the March 14 target date will slip. The House passed the American rescue plan early Saturday morning with minimal changes. But the bill faces a more rocky road in the Senate when the debate starts this week. If the upper chamber passes the bailout package with amendments, it will return to the lower chamber for a re-vote. Assuming the stimulus package leaves Congress by March 22nd, it is expected to be incorporated into law on March 23rd. Direct deposits would be in bank accounts starting March 29th, and checks would be sent out starting April 5th. The deadline could be extended for any number of reasons.
What could delay my stimulus testing?
A possible speed bump for the next stimulus check is the turbulence that has surrounded the minimum wage of 15 US dollars. The House passed the American bailout plan with the increase. However, the Senate’s official MP recently ruled that the minimum wage increase is not budget related and therefore cannot be passed with reconciliation. This process allows simple majority bills to be expired. It needs to be reformulated or removed. A backup plan that penalizes large companies for paying fewer workers also seems to be going nowhere.
Manchin, the party’s most conservative member in the Senate, still only supports a minimum wage of $ 11 an hour. Another problem is how the progressives in the house react to a decreased or most likely distant increase. New York Congresswoman Alexandria Ocasio-Cortez has suggested that extreme left pressure wield the party like its conservative wing in the Senate. Would they withdraw support or otherwise delay the process? That remains to be seen.
Senate Democrats have also questioned other aspects of the stimulus package, such as the framework for expanded unemployment benefits and the funding made available to states and communities. Concerns have also been raised about who will receive stimulus checks. The president has contacted the Senate Democrats to lobby for his case.
Senate Majority Leader Chuck Schumer expects “… a heartfelt debate and some late nights”. He also seems determined to bring up the task at hand.
“But the American people sent us here to help the country at this moment of extraordinary challenges. To take action to end the greatest health crisis our country has faced in a century. And that’s exactly what we’re going to do. “
Distributing the third stimulus check can also lead to delays. The Internal Revenue Service (IRS), the agency charged with sending payments, is in the middle of the tax season. While the CARES Act controls ran around the same time last year, the tax deadline has been postponed from April 15 to July 15. No extension was announced this year. The IRS faces the double burden of sending millions of aid payments while receiving and processing millions of tax returns.
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What could reduce my stimulus check?
The idea of lowering the annual income requirement to get a stimulus check has gained some momentum. In early February, Manchin and Republican Senator Susan Collins of Maine proposed an amendment aimed at “making payments to economically impacted Americans suffering the effects of COVID-19, including provisions to ensure that taxpayers with higher rates Income are not eligible “.
The previous two stimulus checks were discontinued for individuals with an Adjusted Gross Income (AGI) greater than $ 75,000 per year and for married couples with an AGI greater than $ 150,000. (AGI is the sum of your wages, interest, dividends, child support, retirement payouts, and other sources of income minus certain deductions, such as student loan interest, child support, and retirement contributions.) For every dollar of income above the threshold of the previous two stimulus payments decreased 5 percent . For example, the $ 1,200 payment from the CARES Act shrunk to $ 0 for incomes over $ 99,000 ($ 198,000) and the $ 600 from the second incentive to $ 0 for incomes over $ 87,000 ($ 174,000).
The Biden government is open to the idea of lowering the income threshold to $ 50,000 ($ 100,000) in order to better target those in need of the money. Assuming the same five percent formula for the first two checks, a payment of $ 1,400 would actually be $ 700 ($ 1,400) for an annual income of $ 64,000 ($ 128,000) and $ 0 for an annual income of 78,000 USD (156,000 USD).
The goal of lowering the income threshold is to ensure that more money is being spent in the wider economy than is being saved. According to a survey by the Federal Reserve Bank of New York, the average percentage of the first stimulus payments a household spent on essentials fell as income rose. The average percentage of the first stimulus payment a household saved increased as income increased. Heads of household earning $ 40,000 or less annually spent 22.3 percent on essentials and saved 31.2 percent. Heads of household, who raised over $ 75,000 annually, spent 14.7 percent on essentials and saved 40.8 percent. A survey last summer found that the second stimulus check would widen the gap between spending and saving. The same dynamic could affect the third check if income limits are not lowered.
Why do we need stimulus checks?
The economy contracted 3.5 percent in 2020, the largest decline in a year since the end of World War II. Weekly unemployment rates remain historically high. In the third week of February, around 730,000 people initially apply for unemployment insurance. (For reference, about 250,000 new jobless claims were filed in a typical week leading up to the pandemic.) Another 451,000 applied for pandemic unemployment assistance. Another 1 million people received pandemic unemployment benefits, benefits for those whose unemployment benefits otherwise have expired. This group now numbers 5 million people.
At the beginning of February around 19 million people received unemployment benefits of one kind or another. That is one in nine workers. While the official unemployment rate is 6.3 percent, the real rate is likely closer to 10 percent given all people who have left the labor force.
Economic recovery depends on the widespread use of a COVID vaccine. Efforts to vaccinate the public have been slow at times, however. Shortages and winter weather have forced some areas to temporarily close vaccination centers and reduce vaccine administration in recent weeks. Many who qualify have had trouble scheduling appointments. Even so, over 50 million people have received at least one dose of vaccine.
The Food & Drug Administration has just approved Johnson & Johnson’s one-shot vaccine. Four million cans were sent on Monday. And Biden’s coronavirus coordinator Jeff Zients has stated that the government has secured enough doses to allow 300 million Americans to be vaccinated by July 31. Dr. Anthony Fauci, the country’s foremost infectious disease expert, also believes vaccination will be open to everyone by July, when demand no longer exceeds supply. However, wearing masks and a general lack of normalcy could continue through 2022. Currently, domestic COVID cases top 28 million while the death toll has topped 515,000.
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Originally published on February 4 at 6:06 p.m. ET.