Stimulus checks 2.0 mean two different things under the approximately $1 trillion Republican bill and Democrats’ $3 trillion bill, underscoring the divides on what each party thinks the country needs — and what it supposedly can afford to pay — as the coronavirus pandemic continues.
This time around, Republicans are proposing the same check amounts and using the same income-eligibility rules as the CARES Act.
They also want to broaden who counts as a dependent resulting in a $500 payout: This round of checks would provide “even more support for families who care for vulnerable adult dependents,” Senate Majority Leader Mitch McConnell, a Kentucky Republican, said last week on the Senate floor.
Democrats also want to apply the same income ranges as before, but have called for an even more generous $1,200 payout for dependents. They also want to relax the eligibility rules in order to send stimulus checks to non-citizens with an IRS-issued taxpayer number.
The GOP proposal released Monday also called for slimmer 70% wage replacement in supplemental unemployment benefits and legal liability shields, among other things. The legislation is titled the HEALS Act, which stands for the Health, Economic Assistance, Liability Protection and Schools Act.
The income-eligibility range rules are the same in both the GOP and Democratic bills.
Democrats are rallying behind the HEROES Act, which passed the Democrat-controlled House of Representatives in May and calls for direct checks and a continuation of $600 supplemental unemployment benefits through next January.
The initial $2.2 trillion stimulus bill in March earmarked $290 billion for direct checks, sending $1,200 checks to adults and $500 to households for each dependent under age 17. A person making under $75,000 received the full $1,200 economic impact payment under the CARES Act, while a married couple filing jointly that made $150,000 or less received $2,400.
Payment amounts gradually declined and expired for individuals with adjusted gross income above $99,000 and couples making above $198,000. The same income ceilings apply in both the Republican and Democratic bills.
The Internal Revenue Service has distributed roughly 160 million payments, totaling approximately $270 billion, Charles Rettig, the agency’s commissioner, said last month.
The two plans pay different amounts for dependents
The newly unveiled Republican plan pays $500 for dependents of any age, according to Sen. Chuck Grassley’s office. The broadened dependent definition brings in “some people we didn’t intend to leave out last time, but we did,” Grassley, a Republican from Iowa, said. “So, regardless of age, some of these dependents will now be helped.”
The HEROES Act seeks a $1,200 payment per dependent. Direct checks under the bill would pay for a maximum of three dependents. That means a household could receive up to $6,000: a married couple ($2,400) plus three dependents ($3,600).
Like the HEALS Act, the HEROES Act widens the scope of who counts as a dependent. A full-time student up to age 24 counts as a dependent under the bill, as does an adult dependent.
The average stimulus-check size was $1,729 under the CARES Act and could be $2,170 under the HEROES Act, according to projections from Kyle Pomerleau, a resident fellow at the American Enterprise Institute, a right-leaning think tank. He didn’t have immediate projections on the HEALS Act, but predicted it wouldn’t bump up the average stimulus-check amount all that much.
In both the Republican and Democratic bills, the IRS would look at 2019 income-tax returns to determine income eligibility, or 2018 returns if 2019 returns aren’t available. “To me, it makes a lot of sense to go with a framework there that already exists,” Pomerleau said.
The HEROES Act forbids debt collectors from garnishing the payment and blocks the IRS from offsetting a stimulus check to pay down past-due child support. The HEALS Act also protects stimulus checks from garnishment, but doesn’t block offsets for owed child support.
The HEALS Act contains specific language stating that anyone who died before Jan. 1, 2020 won’t be getting a stimulus check, nor will anyone who is in prison at the time the IRS processes payment. During the first payment round, the government sent 1.1 million stimulus checks to dead people, totaling more than $1 billion, according to one watchdog report.
Differing approaches immigration status and stimulus check eligibility
The March stimulus act didn’t allow checks for people with IRS-issued individual taxpayer identification numbers (ITINs). Undocumented immigrants and certain people who are lawfully present in the country can obtain ITINs in order to pay taxes, according to the American Immigration Council, an immigration advocacy group.
The CARES act also barred people with Social Security numbers from collecting stimulus checks if they married and filed jointly with an ITIN holder. Several pending lawsuits are challenging that rule. An estimated 4.3 million people pay taxes using an ITIN, according to one of those cases.
ITIN holders would receive a stimulus check under the HEROES act. The HEALS act wouldn’t send stimulus checks to ITIN holders, according to Allen Orr, president-elect of the American Immigration Lawyers Association. The GOP proposal also didn’t address stimulus check scenarios when someone with a Social Security number married an ITIN holder, Orr said. Green Card holders, in addition to citizens, can have Social Security numbers, he noted.
“There was no additional relief given to those people who are excluded” in the CARES act, Orr said.
So when could the next round of stimulus checks arrive?
The second round of economic impact payments could start rolling out in August if lawmakers quickly pass another relief package, Treasury Secretary Steven Mnuchin said.
The HEALS Act, at least when it comes to stimulus checks, is “about as close as you could get [to an agreement] and shows that the one area of bipartisan support is another round of checks to support the economy,” said Ed Mills, a Washington policy analyst at Raymond James.
The GOP’s expanded definition of a dependent could make stimulus checks alone cost the government $300 billion, he said.
“To have $1,200 being proposed by Senate Republicans, matching the $1,200 given out under the CARES Act, is a significant increase over what Mitch McConnell was speaking about as recently as a week ago,” he said.
Mills said lawmakers could reach a deal by the first week of August, but consumers shouldn’t be banking yet on $1,200. There could be a scenario in which stimulus-check amounts decrease and unemployment payments increase, he said.
“That, I think, is not yet set in stone,” Mills said.