Republicans reportedly want to shrink the 2nd round of $1,200 stimulus checks for low-income Americans and limit who gets government cash
- Congressional Republicans are weighing whether to narrow the recipients of a second stimulus check to Americans with lower incomes, though they haven't settled on an income threshold, The Washington Post reported.
- Senate Majority Leader Mitch McConnell on Monday opened the door for another stimulus check, singling out people earning under $40,000 a year as being among the hardest hit.
- About 20 million people could be left out of a second direct payment if Republicans move ahead with a $40,000 income cap, the economist Ernie Tedeschi estimated.
Republicans are reportedly weighing whether to narrow the recipients of a second round of stimulus checks to Americans with lower incomes who are in dire financial straits as a result of the pandemic, limiting who could get extra government cash.
The Washington Post reported on Thursday that congressional Republicans were seeking to scale back government spending in the next economic relief package, set to be debated later this month, which could mean lowering the income threshold for people to get a full stimulus check.
In March, Congress authorized a wave of direct $1,200 payments for individuals earning up to $75,000 a year, and the size of the check diminished until phasing out for those making above $99,000. Nearly 160 million so-called Economic Impact Payments have been sent so far.
The Post cited four officials familiar with internal deliberations as saying that talks were fluid and that no income cap had been established yet. However, Senate Majority Leader Mitch McConnell on Monday opened the door to another stimulus check for Americans with lower incomes, particularly those earning under $40,000 a year.
"I think the people who have been hit the hardest are people who make about $40,000 a year or less," McConnell said during a public appearance in Kentucky. "Many of them work in the hospitality industry."
McConnell's office did not immediately respond to a request for comment.
Ernie Tedeschi, the head of fiscal analysis at Evercore ISI and a former economist in the Obama administration, estimated that limiting the pool of eligible recipients to individuals earning $40,000 and under could leave out 20 million middle-class Americans who benefited from the initial wave of payments.
President Donald Trump has expressed support for a second round of direct payments, but Republicans on Capitol Hill are more split on the proposal. Some have said it's not needed to boost the economy, while others, like Sen. Thom Tillis, have signaled that they're open to targeting it toward people who are financially struggling.
Republicans and Democrats have already clashed on what should be included in another stimulus package and how big it should be. The GOP is seeking to keep it below $1 trillion, which is likely to spark heated debate with Democrats seeking a larger spending initiative.
"I think we want to make sure that people that are still unemployed or hurting are protected, but at the same time, we want to take into consideration the fact the economy is bouncing back and want to try to contain the amount of spending," Marc Short, Vice President Mike Pence's chief of staff, told Bloomberg Radio on Tuesday.
In May, House Democrats passed a $3 trillion spending bill that would send another round of $1,200 direct payments, increase the payment for dependents to $1,200 from $500, extend aid to states and healthcare systems, keep the $600 federal supplement in unemployment benefits in place until January.
Some progressive Democrats, such as Sen. Bernie Sanders, have called for a $2,000 recurring monthly check during the pandemic. On Tuesday, 156 economists published a letter also calling for recurring direct payments, though it didn't specify a frequency or cash amount.