US coronavirus

Second stimulus check: could eligibility criteria change with new legislation?

Republicans and Democrats are debating a new economic package with both parties reportedly in agreement over a second round of stimulus checks.

Second stimulus check: could eligible criteria change with new legislation?
ERIN SCOTT REUTERS

Republicans and Democrats are this week debating the exact make-up of the latest coronavirus stimulus package to kick-start the ailing US economy after the shedding of tens of millions of jobs due to the Covid-19 crisis in the country. And while both sides of the senate floor emain divided on the exact make-up of a fresh batch of incentives to aid businesses and individuals, there is some consensus emerging that a second round of stimulus checks, or Economic Impact Payments, will be provided to US citizens feeling the pinch of a lengthy lockdown and the knock-on economic effects of the pandemic.

On Tuesday it was reported that senior Republicans had clashed over the details of a new stimulus package, but both US President Donald Trump and Senate Majority Leader Mitch McConnell have both expressed their support for a second round of EIPs to be provided for Americans in need. McConnell is believed to favour a package in the region of $1 trillion while the Democratic proposal of a $3 trillion package – known as the HEROES Act and passed by the House of Representatives in May – is unlikely to receive backing from the Republican-controlled Senate.

McConnell: "We want another round of direct payments"

"We want another round of direct payments - direct payments to help American families keep driving our national comeback," McConnell said on Tuesday after a reportedly testy meeting between Republican heavyweights.

Trump has also said he backs another round of payments to individuals and households and claimed he favors a more generous package than that proposed under the HEROES Act, but the president warned: “It’s got to be done properly.”

Under the CARES Act, a $2.2tn relief package passed in March, Americans earning less than $75,000 were given a check for $1,200. Checks for a steadily smaller amount were also available to higher earners, up to a final income limit of $99,000.

McConnell suggested earlier in July that a second round of payments may be capped at a level of annual earnings of $40,000 per individual citizen or $80,000 per married couple, with provisions for dependent children along the lines of the $500 additional payment included in the Cares Act.

Who will be eligible for a second stimulus check?

Senate Majority Leader Mitch McConnell arrives to a luncheon on Capitol Hill in Washington, U.S. July 23, 2020.

Observers in Washington are expecting an announcement to be made on a new stimulus package this week although a finalized bill might not go through until the first week of August. Under the Cares Act, some 160 million EIPs have been sent out to the tune of around $270 billion, but it is estimated that around 12 million eligible recipients have not received a first check.

As to who will be eligible, both Republicans and Democrats appear to be nearing agreement on another round of EIPs worth $1,200 per individual, $2,400 per married couple and up to $6,000 per household but the exact figures are yet to be revealed.

Under the HEROES Act, unregistered immigrants, adult dependents over the age of 17 and Americans married to non-US citizens would also be eligible for stimulus checks after being excluded from the first round of payments. The Democrats also want to retroactive payments of the initial batch of EIPs to these groups.

What also remains on the table is the question of the $40,000 cap, which could see some 20 million US citizens eligible for the first round of checks excluded from a second.

Republicans considering unemployment benefit extension

Speaking on Thursday, U.S. Treasury Secretary Steve Mnuchin said is interested in getting a trillion-dollar coronavirus relief bill out quickly and that the White House was working with Senate Republicans to hammer out language on extending enhanced unemployment benefits of $600 that are due to expire on July 31.

"We're not going to pay people more to stay home than to work. So we're looking at something that looks like a 70% wage replacement and working on the mechanics." Mnuchin told reporters.