Third stimulus check: will be there a new round of payments?

A brand new coronavirus economic aid package which was unveiled by US president-elect Joe Biden last week is offering qualifying Americans a third stimulus check of up to $1,400.

The "American Rescue Plan" proposes a range of promises including unemployment benefit extensions and billions to speed up the covid-19 vaccine rollout. As well as including proposals for a third stimulus check to Americans in need, Biden's new plan includes a minimum wage overhaul.

Why is there a third stimulus check so soon after the second?

The two key reasons why there will be a new stimulus check in the pipeline so soon after the last one, are because almost all Democrats and even some Republicans thought the last was pitifully inadequate in size and scope. In addition, unemployment numbers have begun to soar again for the first time since mid-summer. It has also become woefully clear that more investment is needed for the coronavirus vaccine rollout to meet targets, so this spending boost has also been included into the Rescue Plan.

Biden’s announcement of the American Rescue Plan (ARP) comes a week after it was confirmed that the US shed 140,000 jobs in December, putting into reverse an economic recovery that had seen employment grow since April.

$1,400 second stimulus check added to December's skinny $600 payout

This amount represents the difference between the $600 second stimulus check included in December’s $900bn relief bill and the $2,000 figure Democrats unsuccessfully sought to raise this to.

"We will finish the job of getting a total of $2,000 in cash relief to people who need it the most," Biden said as he presented the $1.9tn American Rescue Plan in his hometown of Wilmington, Delaware.

"The $600 already appropriated is simply not enough if you have to choose between paying rent and putting food on the table. Even for those who have kept their jobs, these checks are really important."

Biden's stimulus plan also seeks to extend pandemic unemployment insurance programs by six months and offer a $400 weekly boost to jobless benefits - up from the $300 supplement included in December’s package - through to September.

The proposal additionally calls for a $15-an-hour national minimum wage.

Adult dependents now included in stimulus qualification

As part of the planned third round of direct payments, dependents over the age of 16 would be included, having been left out of both stimulus checks sent out so far. Families would be able to claim $1,400 per dependent, the text of the ARP indicates.

Biden’s proposal also pledges to extend stimulus-check eligibility to "all mixed status households" - families in which not every member has a Social Security number (SSN). The second round of checks had already expanded eligibility to claimants who file taxes jointly with a spouse that does not have an SSN.

Specific details on the income thresholds for the proposed third check were not immediately provided, but if they remain the same as in the second round, individuals earning under $75,000 a year and joint-filing couples on a combined income of up to $150,000 would receive the full amount.

In both rounds of checks so far, a gradually smaller figure has been sent out to higher earners, up to a final phase-out limit that has been calculated by reducing the size of the stimulus check by $5 for every $100 over the initial income threshold.

By following this formula, the final earnings limit for the third stimulus check would be $103,000 ($206,000 for joint-filers).

Stimulus check resistance from within Democratic Party

Two weeks ago, Democrats’ bid to up the second stimulus check to $2,000 failed after Mitch McConnell; outgoing Republican Senate majority leader, repeatedly blocked attempts to hold a vote on the measure in the upper house.

However, Jon Ossoff and Raphael Warnock’s wins in this month’s run-off elections in Georgia have now shifted the balance of power in the Senate, giving the Democrats control over the chamber alongside their majority in the House of Representatives.

That said, their wafer-thin advantage in the Senate - the chamber is a 50-50 split, but Democratic vice president-elect Kamala Harris will have a tie-breaking vote - gives them little room for maneuver if there is dissent from senators within the party.

For example, West Virginia Senator Joe Manchin has expressed his concerns over the cost of sending out further stimulus checks, telling CNN last Sunday that he is only in favour of another round of payments for those most in need.

"Sending checks to people that basically already have a check and aren't going to be able spend that or are not going to spend it, usually are putting it in their savings account right now, that's not who we are," Manchin said. "We have done an awful lot of that, it's time now to target where the money goes.”

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