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Skinny bill or a second $1,200 stimulus check? Here’s the latest on who could be eligible

Sen. Mitch McConnell speaks to reporters
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One of the biggest cliffhangers of 2020 has been whether lawmakers can strike a deal to get another round of coronavirus relief flowing to hard-hit American households — and that deadline is nearing, at least if officials want to get aid out before the elections.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued talks Tuesday on some of the key issues that have divided both parties for the past seven months. Pelosi has telegraphed that she’s optimistic lawmakers can bridge the divide between both parties and Trump administration officials, but policy analysts are hesitant about whether Republican senators will still want to approve the deal.

The Senate, meanwhile, is scheduled to vote Wednesday on two “skinny” stimulus bills likely totaling $500 billion, one of which would extend Paycheck Protection Program (PPP) funding and another that’s similar to the HEALS Act.

“The question of priorities is as much a political (one) as an economic one,” says Mark Hamrick, Bankrate’s senior economic analyst and Washington bureau chief. “This is one reason why the Senate, House and White House have been struggling to find areas of common agreement.”

Top of mind for many Americans are a supplemental boost to unemployment benefits and a second stimulus check similar to the $1,200 CARES Act-backed direct payment. All measures proposed by the House, Senate and White House could potentially include some type of relief along these lines but would look different depending on which bill makes it to the finish line.

Here’s what you need to know about which path the next round of relief could take, including who would be eligible for another round of direct payments and how much of a boost the nearly 26 million jobless Americans might see in their weekly unemployment checks.

Coronavirus relief? Here’s what all the key players involved want and the latest on where those measures stand

All three key players — the White House, the Senate and the House of Representatives —  have different objectives in mind. Getting relief out there is going to require “political handicapping,” says Dan North, chief economist at Euler Hermes.

“We really have three different stimulus ideas going on here,” he says. “It’s hard enough to predict the economy. It’s much harder to predict what the political strategy is and how it’s going to play out.”

Republicans and the Senate’s ‘skinny’ bills

Senate Majority Leader Mitch McConnell has expressed that he’s unsure whether GOP leaders would be willing to sign on to a deal between the White House and Pelosi if it totals trillions of dollars. Those concerns come at a time when the budget deficit has soared to $3.1 trillion, more than double the previous record.

“My members think half a trillion dollars, highly targeted, is the best way to go,” McConnell told reporters on Oct. 15, though it’s important to note that two days later, he also said “the Senate would of course consider it” if the White House struck a deal with Pelosi. He also added Tuesday that he’d organize a vote.

Instead, Senate Republican leaders are buying into the idea of moving forward with ‘skinny’ bills, smaller than the $2 trillion-plus CARES Act that might be faster to sign and quicker to filter through while lawmakers negotiate other disputed relief.

Here’s what could be in those bills:

  • Another round of PPP funding, this time with new application requirements.
  • Financial support for the U.S. Postal Service.
  • A supplemental boost to unemployment benefits totaling $300 a week.
  • Liability protections so schools, businesses and health care providers aren’t sued if visitors contract the virus, a top priority for Republicans.

The full text hasn’t been released, but McConnell has said the proposals would also send checks to “those who have been hit the hardest,” though eligibility isn’t explicitly stated.

Republicans seemingly do support sending another round of $1,200 stimulus checks, which was included in the HEALS Act from the end of July.

Democrats and the House of Representatives

Pushing through a “skinny” bill is contingent upon whether the House would buy on to the idea. Pelosi has indicated that Democrats are unwilling to take that approach, though other Democratic leaders have cautioned that a small deal is better than no deal at all.

The measures they’d prefer are most likely similar to the $2.2 trillion relief bill that the House passed in early October, which would:

  • Send another round of up to $1,200 direct payments and $500 per every dependent, even adults.
  • Reinstate the $600 weekly unemployment insurance (UI) boost that expired back in July.
  • Pave the way for another round of PPP loans.
  • Send $436 billion in direct aid to state and local governments.

The White House

President Donald Trump’s priorities have been harder to pin down, with the president first abruptly directing lawmakers on Oct. 6 to halt negotiations for more aid until after the elections. Since then, the president has also said he’d be willing to offer up $1.8 trillion (an increase from the original $1.6 trillion that Pelosi initially rejected). On one occasion, the president has also said he’d be willing to go higher than Pelosi’s $2.2 trillion.

That $1.8 trillion appears to be the most likely route officials in the White House would want to go. According to The Washington Post, here’s what could be in that bill:

  • A $400 boost to weekly unemployment benefits.
  • Another round of stimulus checks up to $1,200 and $1,000 for each dependent child (up from the $500 allotted to families through the CARES Act).
  • $300 billion for cities and states (up from $250 billion in the original $1.6 trillion offer).

Pelosi and Mnuchin are mainly negotiating over the White House and Democrats’ proposals.

“You’ve got the Supreme Court nomination making its way through, you’ve got elections right around the corner and it sounds like there’s still some significant hurdles that remain, not just between Democrats and the White House, but between the White House and Senate Republicans,” says Sameer Samana, senior global market strategist for Wells Fargo Investment Institute. “That’s where it seems like maybe things may end up breaking down, even if the White House and the House reach an agreement.”

For a second stimulus check, ‘skinny’ bill or not, here’s who would be eligible

Regardless of what shape the next round of relief takes, another round of stimulus checks through a separate “skinny” bill, unrelated to what the Senate is working on, isn’t entirely out of the question. Trump encouraged lawmakers to move forward with a stand-alone stimulus bill in an Oct. 6 tweet and said he would be willing to “immediately” sign it if it meant sending another round of $1,200 stimulus checks.

“Senate Majority Leader Mitch McConnell has pushed for a less costly measure, but whether the Republican-controlled chamber would approve another round of relief is unclear,” Hamrick says. “Prospects for final legislative approval, meaning something approved by both chambers with differences reconciled, is also questionable. My sense is that the president would just like to get something approved in order to bolster his re-election hopes.”

Those $1,200 checks are gearing up to look different this time around, though mostly on the grounds of eligibility rather than dollar amounts.

Part of that could be for incarcerated individuals, after a California judge ruled that the IRS cannot discount individuals who are imprisoned from receiving a check. If so, those individuals might receive both a second $1,200 stimulus check and another retroactively.

Individuals who live in a joint-immigration status household (individuals with an Individual Taxpayer Identification Number, or ITIN) could potentially also be eligible for both a second check and a first one retroactively, with Democrats pushing for this in the HEROES Act. Whether that actually happens depends on the Senate and the Trump administration’s final vote, but it might have gained traction among Republicans. Sen. Marco Rubio, a Republican from Florida, also supports this idea.

The biggest change would be how much individuals receive for those they claim as dependents. The White House’s amped up $1,000 extra amount would only be for “child” dependents — in other words, an individual who Americans claim on their tax filings that is under 17. Democrats’ proposed extra $500 would be for adult dependents, or those claimed on a tax filing that they are over age 17.

Income qualifications are most likely to stay the same, with individuals who earn up to $75,000 in their adjusted gross income (AGI) receiving the full $1,200 amount. After that, reduced checks would go out to individuals who make up to $99,000 a year, with the amount falling by $5 for every $100 over the $75,000 limit. Married couples who earn a combined $150,000 would be eligible for a full relief check and up to $198,000 for a partial check.

What you can do right now

Experts say that striking a deal before the election is going to be tough, given these differing priorities. The election around the corner also threatens to slow down the process of getting money out quickly, even if a deal is reached.

“What’s unclear is, even if they do reach an agreement, first of all, whether something would be able to come together before the election given all the other priorities,” says Shai Akabas, economic policy director at the Bipartisan Policy Center. “If politics were not part of the equation, you could pass the pieces you agree to and come back to other parts later.”

This week’s passage deadline is more of an artificial one, with the more pressing deadline potentially getting relief out to hard-hit retailers and cash-strapped Americans before the holiday season or another wave of lockdowns if a second wave of infections perks up, according to North.

Both passing and not passing a bill would have implications for the U.S. economic outlook. More spending could exacerbate debts and deficits, but none at all could stifle the rebound at a time when the pace seems to be weakening.

“There will be a cost to passing further legislation and there will be a cost to fail to pass it,” Hamrick says. “It seems unlikely that the economy would be given too much of a push from whatever emerges, given that the Federal Reserve, for example, doesn’t see the economy returning to so-called full employment until 2023.”

If lawmakers decided to move forward with a skinny stimulus check bill while still rejecting those other offers floated by the White House and the House, you’d likely see that money quickly. Mnuchin has said that the IRS could potentially send out the first round of checks through direct deposit within a week of signing the bill. Mailed checks, however, might take even longer.

That means it’s important to prioritize finding ways to cut back on expenses and juice up your emergency fund. It’s no question that many Americans might find it challenging to do more than they already have at this point, given that two rounds of supplemental UI boosts have mostly already expired. A separate survey from Bankrate found that the $1,200 stimulus checks wouldn’t keep nearly a third of Americans going for a full month.

In the meantime, take advantage of the IRS’ extension to the $1,200 stimulus check collection deadline, now Nov. 21 instead of Oct. 15, if you still haven’t received your check.

“We’re going to have a hard time keeping the economy running well,” North says of not having a relief package. “We have people who are unable to make their mortgage payments, unable to make rent and going delinquent on their loans. More and more debt slows down our growth rate in the longer term. That’s the risk of overdoing it today, but maybe it’s a risk worth taking.”

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Written by
Sarah Foster
U.S. economy reporter
Sarah Foster covers the Federal Reserve, the U.S. economy and economic policy. She previously worked for Bloomberg News, the Chicago Tribune and the Chicago Daily Herald.
Edited by
Senior wealth editor