Democrats Consider Withholding Coronavirus Stimulus Checks From Wealthier Households

A more "targeted" approach to COVID-19 relief would result in some households missing out on checks.

Democrats are exploring ways to limit the cost of stimulus checks that would go to households in hopes of gaining Republican support for their next coronavirus pandemic relief bill.

During a meeting at the White House on Wednesday, President Joe Biden and top Senate Democrats held “a conversation about the direct payments and how those might be modified in a way to ensure they’re targeted,” Sen. Chris Coons (D-Del.) told reporters.

White House press secretary Jen Psaki, meanwhile, said the administration is considering lowering “the income level of people who receive the check” but not the amount of money itself.

Democrats have embraced Biden’s American Rescue Plan, a $1.9 trillion package that includes unemployment benefits, vaccine distribution funding and direct payments worth $1,400 per person, and have begun the legislative process that would allow them to pass a bill without any Republican support.

Congress approved $1,200 payments to most Americans in March 2020 and followed up with a round of $600 payments in December. Biden’s proposal would make up the difference between the recent checks and his campaign promise to deliver payments worth $2,000.

The more “targeted” approach, as lawmakers call it, would lower the annual income threshold above which people no longer receive the full payment. Lowering the threshold would likely result in some of the wealthier households that got $600 payments missing out on the $1,400 follow-up.

Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee, which has jurisdiction over tax rebate policy, cautioned against fussing with eligibility for the payments, saying Wednesday that “families who received the first two checks will be counting on a third check to pay the bills.”

In the last two rounds of payments, individuals with prior-year incomes above $75,000 and couples with combined incomes above $150,000 got smaller checks or none at all. A whopping 90% of U.S. households received payments from the last round.

Democrats may lower the phaseout threshold to $50,000 for individuals and $100,000 for married couples, according to Democratic aides. (The Washington Post first reported the lower threshold was under consideration.)

Earlier this week, a group of 10 Republican senators met with Biden at the White House and pitched him on a significantly smaller $600 billion relief package. Their plan calls for just $1,000 direct payments while reducing the income limit that determines eligibility to $50,000.

Although the meeting was cordial and both sides pledged to continue bipartisan conversations, Biden left no impression that he would be backing off a larger-scale pandemic package. He did, however, seem receptive to the argument that direct payments needed to be more targeted.

It’s unclear whether any Republicans will ultimately support the next coronavirus relief bill even if Democrats agree to narrow the pool of eligible stimulus check recipients. GOP senators are particularly opposed to provisions in Biden’s plan that would give $350 billion in aid to states and localities, for example.

“If President Biden works with Republicans, and we make some modifications to his plan, it’s entirely possible that there would be some Republican support,” Sen. Mitt Romney (R-Utah) said Wednesday. “But if it goes forward without any changes from what was originally proposed, I would predict that not a single Republican will support the $1.9 trillion plan.”

Democrats have made clear that it is their intention to pass a big coronavirus aid bill ― with or without Republican support. They can do so with a simple majority vote under a special budget process known as reconciliation, which they formally kicked off this week in Congress.

“There’s agreement, universal agreement we must go big and bold,” Senate Majority Leader Chuck Schumer (D-N.Y.) said after meeting with Biden on Wednesday. “We hope our Republican colleagues will join us. ... We want to do it bipartisan, but we must be strong. We cannot dawdle, we cannot delay, we cannot dilute.”