CORONAVIRUS

Democrats Unveil First Draft Of $1,400 Stimulus Checks Bill

In a win for progressives, the proposal retains the previous income threshold below which Americans would qualify for the full payment.

Democrats are beginning to write President Joe Biden’s proposal for emergency COVID-19 relief into actual legislation, unveiling a bill Monday that covers some of the biggest parts of what is expected to be a $1.9 trillion package.

That includes another round of stimulus checks. Most U.S. households would receive $1,400 per person under the legislation House Ways and Means Chair Richard Neal (D-Mass.) released, though for this third series of checks, Democrats are cutting off higher-income Americans. 

The legislation is a win for progressives who have been fighting against calls from more moderate Democratic and Republican colleagues to reduce the number of families that would receive direct payments by lowering the income eligibility thresholds.

Nonetheless, the House bill is a compromise. All individuals making $75,000 or less (and all joint filers earning $150,000 or less) would receive full payments of $1,400, as Biden originally proposed, but the checks will cut off altogether for individuals who make more than $100,000 (or twice that for joint filers). The changes appear to be partly due to the White House’s concerns about higher-earning Americans receiving direct payments. 

“Our nation is struggling, the virus is still not contained, and the American people are counting on Congress to meet this moment with bold, immediate action,” Neal said in a statement. “From increasing direct assistance to those who need it most to expanding tax credits for low- and middle-income workers, we deliver substantial solutions in this package.”

The bill also extends federal unemployment programs, but only through August instead of September, as Biden had proposed in his original outline of the COVID-19 relief plan. Current emergency federal unemployment benefits are set to expire in mid-March, which threatens the livelihoods of an estimated 11.2 million Americans, according to one estimate.

Republicans and some moderate Democrats have sought to taper down some of Biden’s proposals in recent weeks, spurring backlash from some lawmakers who emphasized that Democrats won the White House and their narrow majority in the Senate on a promise of another round of stimulus checks and a robust emergency package.

It’s unclear whether Senate Democrats will keep the exact same structure for direct payments in their coronavirus relief legislation. Both chambers are tasked with writing separate legislation under special budget rules that will allow Democrats to pass the $1.9 trillion package via a simple majority vote. The goal is to merge the two bills and send the final product to Biden’s desk by March. 

Sen. Joe Manchin (D-W.Va.), a key moderate who had called for slimming down portions of the bill, said he was open to the House Democrats’ proposed changes for direct payments.

“As long as we’re targeting to people that really need it,” Manchin told reporters on Monday.

The House bill also includes a major proposal to expand the child tax credit from $2,000 to $3,600 and make it “fully refundable” so that parents with no income can receive the credit as cash refunds. The extra payments could sharply reduce child poverty. 

The legislation tells the Internal Revenue Service to distribute the payments in advance, on a monthly basis, so that the credit essentially becomes a child allowance ― but only if the IRS can handle the task. 

A summary of the legislation says the “payments are intended to be delivered on a monthly basis” starting in July, but if the IRS discovers that the job is “infeasible,” then it can “issue the payments as frequently as is feasible.”

Despite concerns about feasibility, Democrats stuck with their child tax credit expansion even after Sen. Mitt Romney (R-Utah) proposed a similar monthly child benefit that would be paid by the Social Security Administration, an agency with a lot more experience paying monthly benefits. 

Democrats have very little room for error if they want to make good on Biden’s first and most pressing campaign promise and pass these bills before federal benefits programs expire on March 14. 

It’s become increasingly clear that Republicans aren’t going to sign on to Biden’s proposal, and the White House has been adamant that significantly slimming down the relief package would fail to address the current public health and economic crisis. That means every Senate Democrat has to be on board with the final package to pass it through budget reconciliation.

“The risk here is not doing too much, it’s doing too little,” Jared Bernstein, a member of the president’s Council of Economic Advisers, told HuffPost last week. 

The stakes continue to be high. Treasury Secretary Janet Yellen warned over the weekend that the job market was “stalling” in an interview with CBS Sunday. The January jobs report showed meager improvements to the economy and bleak numbers for the job market. The labor force is shrinking, millions remain unemployed, and key industries like retail, health care, transportation and hospitality are still shedding jobs.

With the March benefits deadline just more than a month away, Democratic-led House committees, like the Ways and Means Committee, which handles all tax-related policy in addition to unemployment programs and benefits for families, are releasing their portions of what will ultimately be the $1.9 trillion package. 

On Monday, a separate House committee on labor and education also released a bill that covers Biden’s plan to safely reopen schools. It includes $130 billion in funding for ventilation systems, reducing class sizes and obtaining protective gear, among other things. The legislation allocates $39 billion for child care providers to cover costs for families struggling to keep up with tuition.

Notably, Democrats included the hotly debated proposal to increase the minimum wage to $15 an hour over the next four years — something Manchin has already said he opposes. At this point, it’s not even clear raising the minimum wage complies with Senate rules around budget reconciliation.

But for now, it looks like House Democrats are going to try to push the policy as far as they can.