As Congress begins to tackle the next stimulus package, Republicans and White House officials are considering proposals to lower that number to below $ 75,000, according to four people who are informed of internal discussions and on condition of anonymity speak private consultations. The exact number they will be looking for is unclear because the conversations are fluid. One person warned that the Republicans could ultimately revive the original proposal due to the difficult administrative challenges that result from trying to tightly control controls.
At two events this week, Senate Majority Leader Mitch McConnell (R-Ky.) Said payments should primarily be sent to those earning less than $ 40,000, but it wasn̵
“The people I think were hit hardest throughout this episode were people who make $ 40,000 a year or less. Many of them work in the hospitality industry, in hotels and restaurants – we will be well aware that this particular part of our population will flow into this next package, which we will be putting together in the next few weeks, ”said McConnell on Wednesday in Winchester, Ky.
McConnell added, “These people who worked in the hospitality industry and were hit so hard – I think those direct controls were particularly important to them.”
The attempt to limit the size of the stimulus payments comes from the fact that the Republican leadership is trying to reconcile the pressure from the conservatives to limit spending in the next bill with the urgent economic and health needs across the country, which is always are still affected by the pandemic.
Numerous Conservatives in both Congress and the White House have raised concerns that they have already spent too much tax money on fighting the virus. Legislators have already thrown more than $ 3 trillion into the pandemic response. Earlier this week, a top vice president from Pence told Bloomberg News that the government intended to limit the package’s spending to $ 1 trillion. This is similar to McConnell’s goal.
When asked about a possible $ 40,000 income limit for the checks on Thursday, Treasury Secretary Steven Mnuchin declined to comment on the details of ongoing negotiations with Congress legislators. However, the finance minister confirmed that GOP lawmakers are trying to figure out how to structure another round of stimulus payments.
“We can put that on the bank accounts of hard-working Americans very quickly. We will discuss the level and criteria with the Senate, ”Mnuchin told CNBC.
Keeping the cost of the legislation below $ 1 trillion could prove very difficult, congress officials from both parties say. President Trump, who is under political pressure months before his re-election to stabilize the economy, has shown little concern about the growing budget deficit. One of Trump’s best economic advisers, Peter Navarro, said just a few weeks ago that the president wanted the package to cost $ 2 trillion. The House Democrats approved laws that cost more than $ 3 trillion, and Mnuchin, the president’s chief negotiator with Congress, has so far approved large bipartisan spending agreements.
Restricting the amount of aid could prove unpopular during a national emergency. Ernie Tedeschi, who worked as an economist in the Obama administration, would limit the next round of short-term audits to those earning less than $ 40,000 compared to the first round of checks to save about $ 200 billion. This would also mean that 20 million fewer middle-class Americans would not receive the financial lifeline.
The plan to reduce performance is another challenge as the finance department sets eligibility to review taxpayers’ income statement for 2019. Americans who have earned more than $ 40,000 last year, but whose income has dropped dramatically or have since disappeared, would not receive a stimulus check despite their suffering if the new threshold is adopted.
According to an earlier Washington Post analysis, at least 4 million private sector workers have seen wage cuts during the pandemic, and many of them are likely to fall below the income threshold. The unemployment rate initially rose to almost 15 percent in April after 3.5 percent in February. In June it was 11 percent.
A Republican tax expert, who spoke on condition of anonymity to discuss private consultations, predicted that the GOP would likely withdraw plans to contain payments because of the administrative hurdles to effectively targeting funding. The GOP will also face political pressure not to curb economic stimulus payments for middle-class households during an election year.
“As the income threshold is lower than last time, more people are injured,” said Dorothy Brown, a tax specialist and professor at the Emory University School of Law, who found that many Americans are faced with eviction become moratorium. “This will have drastic human consequences.”
Republican lawmakers disagreed whether another round of checks should be mailed at all. Trump, Mnuchin and some Senate Republicans have expressed their support for another round and believe they offer both political and economic benefits. Some senior White House officials remain skeptical and believe that many Americans just pocket money instead of spending it on the economy – a view some economists share. Sens. Mike Rounds (SD) and Mitt Romney (Utah) are among the Senate Republicans who have spoken out against the idea.
The lower income threshold could be a compromise between the camps, although this would require democratic support. House Speaker, Nancy Pelosi (D-Calif.), Approved laws that included another round of $ 1,200 stimulus checks and $ 1,200 per child. (The original round of stimulus checks only delivered $ 500 per child.) Some more liberal Congress Democrats have requested that every American be given a $ 2,000 check every month until the pandemic subsides.
Leading Congress Democrats, however, are primarily focusing on calling for an extension of the $ 600 weekly unemployment benefit approved by Congress in March, which is due to expire later this month. Jared Bernstein, who acted as advisor to suspected Democratic presidential candidate Joe Biden, said he would help lower the threshold from $ 75,000 a year to $ 60,000 – around the national average.
“It is crucial that this kind of help comes out of the door quickly. But I would be careful not to set the bar too low, ”said Bernstein.