Third stimulus check: Will you get a $1,400 check?

President Joe Biden’s $1.9 trillion coronavirus relief plan would provide a third round of federal stimulus checks to millions of Americans. Yet while lawmakers on both sides of the aisle have expressed support for the proposal, there is less agreement on who should be eligible for the $1,400 direct payments.

Congressional Democrats are moving forward with Mr. Biden’s relief plan through a process called budget reconciliation, which would allow the Senate to approve the effort without any Republican support. As the process moves forward, House and Senate committees will discuss spending priorities before drafting and voting on legislation. That’s expected to occur later in the week of February 8, according to economists at Goldman Sachs. 

On February 4, the Senate approved a bipartisan plan introduced by Democratic Senator Joe Manchin and Republican Senator Susan Collins to block “upper income citizens” from the next round of stimulus checks. Notably, however, the plan doesn’t define “upper income.” The measure would ensure that “the struggling families that need it most” would receive the checks, Collins said in a statement. 

The amendment adds “uncertainty whether all the Senate Democrats will support President Joe Biden’s full plan, with Joe Manchin already expressing doubts about the need to send $1,400 stimulus checks to those that might not need the money,” Paul Ashworth, chief U.S. economist at Capital Economics, told investors in a research note.

Are stimulus checks helping the economy?

The U.S. economy continues to struggle with higher-than-normal layoffs and other setbacks. Almost 800,000 people applied for jobless benefits in the week ending February 6, a dip from the previous week, the Labor Department said Thursday. At the same time, new economic data released on February 17 indicates that the second stimulus check is working as intended, with retail sales jumping 5.3% in January, or five times higher than expected.

“Those outsized gains in big ticket discretionary items suggests the $900 billion fiscal stimulus passed late last year is working as intended — with most Americans receiving $600 per person stimulus checks early in the month, while monthly unemployment insurance payments were increased,” noted Michael Pearce, senior U.S. economist at Capital Economics, in a report.

House Democrats completed their markups of the bill without any major changes to Mr. Biden’s $1.9 trillion proposal, Height Security analyst Hunter Hammond wrote in a February 12 research note. The bill will move through more House committees, likely reaching a vote during the week of February 22, he said. The analyst predicts that the Senate will vote on the bill by the beginning of March. 

Here’s what the experts are saying about the next stimulus check and who may be eligible.

Why are income limits an issue?  

The first two government stimulus checks — $1,200 for the first round and $600 for the second round — also set income thresholds that made higher-income households ineligible for the payments. In both earlier rounds, single people who earned up to $75,000 and married couples who earned up to $150,000 received the full payments.

People with higher earnings got smaller payouts as their incomes rose, until the payments cut off entirely for higher-income families. In the first round, the phaseout stood at $99,000 for single people and $198,000 for married couples.

In the second round, the phaseout was slightly lower — $87,000 a year per single person and $174,000 per married couple. But that was a function of the smaller size of the checks, given that the law reduced both checks by 5% for every $100 earned above the income limits for full payments.

Recent economic research indicates that finances have stabilized for many middle- and higher-income families who have managed to work from home during the coronavirus pandemic. That is stirring debate among lawmakers and experts over whether the direct aid should be targeted toward lower-income households, who are more likely to feel the ongoing economic impact of COVID-19 and its spread. 

Households earning under $78,000 annually quickly spent their second stimulus checks after receiving them in January, while those with incomes above that level socked away most of the money, according to research from the Opportunity Insights Economic Tracker, a nonprofit group led by Harvard economics professor Raj Chetty. 

“Since the middle of June, the recession in jobs for higher-income households is over — employment has been just like it was before the pandemic” because their jobs can be done remotely, Michael Stepner, an economist with Opportunity Insights, told CBS MoneyWatch. 

Are there new income limits to get a check?

Not yet, as nothing has been decided. Still, Mr. Biden has expressed a willingness to negotiate, with the president saying he would insist on $1,400 checks while suggesting he was willing to direct the checks to people who need the most help. 

That could result in Democrats lowering the income threshold to qualify for a payment to single people who earn $50,000 or less and married couples with income of $100,000 or less, according to the Washington Post. If that occurs, millions of households who received the prior two stimulus checks likely wouldn’t qualify for the third. 

For instance, the IRS said it sent 30 million payments to households earning more than $75,000 during the first round of stimulus checks. Under the income thresholds reported by the Washington Post, it’s likely many of those households wouldn’t qualify for the full $1,400 check.

But on February 8, House Democrats pushed back on those lower limits, proposing to keep the income thresholds at the same level as for the previous checks. That would ensure the full $1,400 relief payments would go to individuals making $75,000 or less, while couples earning $150,000 would be entitled to $2,800 relief payments. The payments would ratchet down for incomes above those levels, phasing out entirely for single people earning $100,000 and couples earning $200,000.

“There is a discussion right now about what that threshold will look like. A conclusion has not been finalized,” said White House press secretary Jen Psaki.

At a CNN event on Tuesday, Mr. Biden emphasized his commitment to a large stimulus effort. “The overwhelming consensus is, in order to grow the economy a year, two, three and four down the line, we can’t spend too much,” Mr. Biden said. “Now’s the time we should be spending. Now is the time to go big.”

What do the experts say?

Wall Street analysts aren’t banking on many changes, with Goldman Sachs expecting the same income thresholds as with the first checks — $75,000 for individuals and $150,000 for married couples. 

Biden pushing relief bill even without GOP


Some lawmakers are pushing back against limiting the payout to a smaller group of households, such as Senator Bernie Sanders, an independent from Vermont.

“It is absurd that some Democrats think we should tell a worker making $52,000 a year that they are ‘too rich’ and cannot get the full $2000 benefit we promised,” he wrote February 7 on Twitter. 

The ranks of adults experiencing financial hardship in January was little changed from December, despite the rollout of the second round of stimulus checks, according to Morning Consult economist John Leer. Most of the struggles were experienced by people earning less than $50,000 in annual income, he said. 

A third round of $1,400 checks would allow 22.6 million adults to pay their expenses for more than four months without going into more debt or eating into their savings, his analysis found. 

“Low-income households and parents were the most desperate to receive their second stimulus checks and are the most likely to need additional stimulus going forward,” Leer wrote in his analysis. “According to a survey conducted at the beginning of February, Americans with annual household incomes under $50,000 already spent roughly 67 percent of money they received.”

By comparison, households earning more than $100,000 spent about 50% of their stimulus checks, his analysis found.

When would I get a $1,400 check? 

Not for several weeks, analysts predict. The House and Senate committees must first draft and vote on legislation. It’s likely that the relief bill would be passed by mid-March, Barclays analysts said in a February 10 research note. Democratic lawmakers have said they want to pass a new relief bill before the current $300 in weekly additional jobless aid expires on March 14. 

“As we have written, we continue to expect a $1-2 trillion stimulus package – an early estimate that seems very reasonable in hindsight – by mid-March, when the most recent extension for unemployment assistance expires,” Barclays analysts wrote. “If policymakers need more time to finalize the details, they may consider a short-term extension” of unemployment aid.

Once the relief bill is passed, it must be signed by Mr. Biden. After that, the IRS would direct stimulus checks to eligible households. Based on past payment schedules, checks could arrive via direct deposit within a week of Mr. Biden signing the bill. 

However, people who don’t have banking accounts or payment information on file with the IRS would likely have to wait longer for paper checks or prepaid debit cards to arrive in the mail.

With reporting by the Associated Press.

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