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Stimulus check: who'll qualify for second Economic Impact Payment?

Senate Republicans are preparing to present CARES 2, a proposal for a coronavirus relief bill that is set to include a second stimulus check.

US Senate Majority Leader Mitch McConnell, speaks to the press after a Republican policy lunch on Capitol Hill in Washington, DC on July 21, 2020. (Photo by Olivier DOULIERY / AFP)

Republican senators are due to present their proposal for the next coronavirus relief package early next week, with a second stimulus check set to be among the measures included in the bill, called CARES 2.

"Republicans want to send a second round of direct payments"

Republicans want to send a second round of direct payments to American households,” Senate Majority Leader Mitch McConnell said on Thursday, as he announced a "framework [package] that will enable Congress to make law and deliver more relief to the American people that is tailored precisely to this phase of the crisis".

McConnell’s endorsement of another round of stimulus checks follows that of United States President Donald Trump, who told Fox earlier in July that he favors bigger payments than those sent out as part of the CARES Act, a $2.2tn relief package signed into law in March. "I support actually larger numbers than the Democrats […],” Trump said. "I want the money getting to people to be larger so they can spend it."

CARES 2 is, notes CNET, "the Republican response to the HEROES Act", a $3tn Democrat-backed stimulus bill that passed the House of Representatives in May, but has met with resistance in the GOP-controlled Senate. After the proposal is presented, the media outlet adds, Senate Republicans are set to commence talks with Democrats in Congress in a bid to “find common ground on the CARES 2 bill”, discussing issues that include who would qualify for a second check.

Mnuchin talks of similar structure to CARES Act checks

Going by remarks made by US Treasury Secretary Steve Mnuchin this week, the parameters of the next round of stimulus checks could well mirror those of the CARES Act direct payments. "Our proposal is the exact same provision as last time," Mnuchin told reporters on Thursday, in quotes published by Bloomberg.

Who was eligible for the CARES Act stimulus checks?

The CARES Act stimulus checks, officially known as Economic Impact Payments, have seen individuals earning less than $75,000 given a check for $1,200, with joint tax filers on under $150,000 getting $2,400. Checks for a steadily smaller amount were also made available to higher earners, up to a final income limit of $99,000 for individuals and $198,000 for joint filers. Households have also been able to claim an extra $500 per dependent aged 16 or below.

Who did the HEROES Act's proposed payments include?

The HEROES Act also proposed checks of up to $1,200, with the same income thresholds - but sought to broaden eligibility. Having been left out of the first round of payments, immigrants without a Social Security number stood to receive a HEROES Act check and also retroactively qualify for the CARES Act money.

People aged 17 to 24 who were listed as dependents in 2018 or 2019 tax returns have also been excluded from the CARES Act payments, as they qualify neither for a stimulus check nor for the $500 household credit. The HEROES Act proposed including over-16s in its extra payments for dependents, in addition to raising this amount from $500 to $1,200 and giving out the $500 not granted under the terms of the CARES Act.

As CNET points out, the broader eligibility structure laid out in the Democrat-supported HEROES Act is helpful in determining the outer limit of who would be likely to qualify for the second round of checks. Republicans cannot reasonably be expected to seek to build on the scope of the HEROES Act and, as Mnuchin’s words above suggest, are likely to narrow it back down.

$40,000 income cap on second stimulus check?

Indeed, McConnell has even hinted that a far lower income cap could be imposed, leading eligibility for a second stimulus check to be significantly more limited than in the CARES Act. "The people that I think have been hit the hardest during this whole episode have been people making $40,000 a year or less", he told reporters two weeks ago.

He added: “Many of them work in the hospitality business, hotels, restaurants - we're going to be acutely aware of that particular segment of our population going into this next package that we'll be putting together in the next few weeks."

However, citing a source close to discussions over the next stimulus bill, Bloomberg has since reported that a cut-off point as low as $40,000 "is not seen as likely".

$40,000 limit would disqualify 20m more Americans from stimulus checks

According to the economist Ernie Tedeschi, who served as an adviser to former President Barack Obama, such an income threshold would mean around 20 million Americans who qualified for a CARES Act stimulus check would be left out of the second round of payments.

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