(CBS Detroit) — The likelihood of a third stimulus check has drawn a lot of interest. But the $1.9 trillion economic relief package includes so much more than a $1,400 payment. The American Rescue Plan looks to address the economic pain and suffering brought on by the ongoing pandemic. And it would do that through programs designed to support struggling families, communities and small businesses, and to stop the advance of COVID through testing, tracing and vaccinations. Some of these efforts could even put more money in your pocket.
Exactly how much money depends on what happens in the Senate. The House passed the stimulus package on Saturday along party lines and largely unchanged from Biden’s proposal. The Senate will now take it up, with the minimum wage proposal having already been ruled out of bounds given the reconciliation process under which the bill is moving forward.
Here’s where things stand right now.
Third Round Of Stimulus Checks
After $1,200 last spring and $600 this winter, a third payment seemed likely if the economy continued to sputter. It was more a matter of how much and when. The $1,400 number came about after the former president requested a $2,000 payout rather than the then-pending $600. Democrats quickly threw their support behind a larger stimulus check, passing a bill in the House that would more than triple the second stimulus check. Republican Senators David Perdue and Kelly Loeffler, who were embroiled in close runoff elections in Georgia, also supported the increase.
A larger second stimulus never came to pass, but the number stuck. And when Democrats Jon Ossoff and Raphael Warnock won those two January elections, tilting control of the Senate to their party, the effort gained some steam. Democrats would soon hold the presidency and both houses of Congress and could push through a third stimulus.
While $1,400 remains the topline number, some people could receive less or more, depending on their income and dependents.
Many higher earners saved rather than spent their previous stimulus checks. That gave rise to the idea of lowering the annual income requirement for recipients. In early February, Democratic Senator Joe Manchin and Republican Senator Susan Collins of Maine proposed an amendment aimed at “targeting economic impact payments to Americans who are suffering from the effects of COVID–19, including provisions to ensure upper-income taxpayers are not eligible.”
To that end, lowering the income threshold from $75,000 (and $150,000 for married couples) to $50,000 ($100,000) has been considered. The previous two checks fell by five percent for every dollar earned over the limit. Assuming that same five percent formula, a $1,400 ($2,800) payment would actually be $700 ($1,400) at an annual income of $64,000 ($128,000) and $0 at an annual income of $78,000 ($156,000).
On the other hand, those with older dependents could see more money. A dependent was defined as anyone under the age of 17 living in your household the last time around. The American Rescue Plan looks to expand the pool of eligible dependents to include those over the age of 16. In that group would be college students and older adults with certain kinds of disabilities. If the same methodology otherwise holds this time around, many households would benefit. Such a change could make an estimated 13.5 million more people eligible to receive stimulus checks.
Other Assistance To Families
A third relief payment would account for $422 billion of the $1 trillion earmarked to assist families. But some small portion of the remaining $570 billion-plus could also find its way into your pocket. Proposed assistance to families also includes additional unemployment benefits, a more generous child tax credit, and more.
The current weekly federal unemployment insurance bonus of $300 expires on March 14. The American Rescue Plan would up that to $400 and extend it through the last week of August. It would also help those who have burned through their benefits, as well as freelancers who weren’t eligible for aid in pre-pandemic times but may have since received Pandemic Unemployment Assistance.
Under the revised child tax credit, the IRS would pay out $300 per month for each child up to five years old and $250 per month for each child ages six through 17. That adds up to $3,600 or $3,000 per year, rather than the current $2,000 credit received at tax time. Payments would be issued automatically in a similar fashion to stimulus checks, and would not be dependent on the recipient’s current tax burden. In other words, qualifying families would receive the full amount, regardless of how much they owe in taxes. Additional payments would phase out beyond a $112,500 annual income for individual parents or $150,000 for married couples.
The credit would be fully available to families accounting for 27 million children, according to the Center on Budget and Policy Priorities. That covers approximately half of all Black and Latino children, whose families have been hit particularly hard by the economic fallout from the COVID pandemic. Anywhere from eight to 12 million children currently live in households facing food insecurity due to lack of money, according to recent Census data. Estimates suggest that expanding the child tax credit would push 9.9 million children beyond or closer to the poverty line.
An extension of eviction protection and the Supplemental Nutrition Assistance Program (SNAP) bonus are also part of the American Rescue Plan. The ban on evictions would be extended through September, and the $30 billion in rental assistance and $10 billion more in mortgage assistance is also provided. Expiration of the additional 15 percent in SNAP benefits provided by the second stimulus package would also be extended from June to September. The 15 percent bonus provides about $27 more in food assistance per person per month, or over $100 for a family of four.
A $15 minimum wage is also part of the latest stimulus package, at least for now. The proposal, as laid out in the original bill, would increase the current $7.25 federal minimum to $9.50 this year, $11.00 in 2022, $12.50 in 2023, $14.00 in 2024, and $15.00 in 2025. In the short-term, that could mean a raise of up to $2.25 per hour.
The House passed the American Rescue Plan with the increase included. But the Senate’s official parliamentarian recently ruled that the minimum wage hike isn’t related to the budget and therefore can’t be passed using reconciliation, the process that allows bills to proceed with a simple majority. It will have to be reworded or stripped out. A backup plan, whereby large corporations are penalized for paying workers less, also seems to be going nowhere.
On the off chance Democrats find a way to reword the minimum wage provision, Manchin, the party’s most conservative member in the Senate, still only supports an $11 per hour minimum wage. How progressives in the House react to a reduced or — most likely — removed increase is still another concern. Congresswoman Alexandria Ocasio-Cortez from New York has suggested that the far-left wing pressure the party like its conservative wing in the Senate has.
The Rest Of The Stimulus Package
There’s a lot more to the economic relief package than stimulus checks and other aid to families. The American Rescue Plan also includes $440 billion to help communities and small businesses and another $400 billion to stop COVID and bolster the vaccination effort.
States and localities have been hit hard by declines in tax revenue, with 26 Democrat and Republican-led states experiencing budget shortfalls. Since most states are required by law to balance their budget, that generally means eliminating public jobs and services. As of mid-February, approximately 1.3 million state and local government jobs have been lost, mostly related to education. A budget shortfall could also necessitate a rise in taxes. With the allotted $350 billion, states and local governments could address this key area of need. This part of the plan would also feature $47 billion for the disaster relief fund and $28 billion in support for transit systems. Restaurants and bars would also receive $25 billion.
The best way to return the economy to some semblance of normal is to eliminate the threat people would face when resuming their pre-pandemic lives. That requires a bulked-up COVID response. Biden sees vaccination centers in communities around the country as important for broadening the vaccination effort nationwide. This expansion of the anti-COVID infrastructure also calls for a public health jobs corps to disseminate factual information to the public and contact-trace. That would cost $19 billion. Another $50 billion would go toward expanded testing and tracing and $16 billion for distributing vaccines.
Schools would receive $130 billion to help with reopening efforts, with another $40 billion set aside for colleges and universities. The bill also reestablishes the requirement that employers provide paid leave to those who catch COVID and/or must quarantine makes it easier to purchase individual health insurance.
Why Another Stimulus Package Is Still Needed
The economy shrank by 3.5 percent in 2020, the largest single-year decline since the end of World War II. Weekly unemployment figures remain historically high, with approximately 730,000 people initially applying for unemployment insurance in the third week of February. (For reference, a typical pre-pandemic week saw about 250,000 new unemployment applications.) An additional 451,000 sought Pandemic Unemployment Assistance. Another 1 million people received Pandemic Emergency Unemployment Compensation, benefits for those whose unemployment aid has otherwise run out. That group now totals 5 million people.
At the start of February, approximately 19 million people were receiving unemployment benefits of one kind or another. That’s one out of every nine workers. While the official unemployment rate is 6.3 percent, the actual rate is probably closer to 10 percent, given all the people who have dropped out of the labor force.
An economic bounceback depends on the widespread distribution of a COVID vaccine. But efforts to inoculate the public have proceeded somewhat sluggishly at times. Shortages and winter weather have forced some areas to temporarily close vaccination centers and scale back administering the vaccine in recent weeks. Many who qualify have faced problems in scheduling appointments. On the bright side, the Food & Drug Administration just authorized Johnson & Johnson’s one-shot vaccine. Four million doses have been shipped. And Dr. Anthony Fauci, the country’s top infectious disease expert, believes vaccination will be open to everyone by July, when demand will no longer outpace supply. But mask-wearing and a general lack of normalcy could continue into 2022. Currently, domestic COVID cases exceed 28 million, while deaths have surpassed 510,000.