The Senate has endorsed President Biden’s $1.9 Trillion American Rescue Plan. What comes next?

The American Rescue Plan is an “Emergency Legislative Package to Fund Vaccinations, Provide Immediate, Direct Relief to Families Bearing the Brunt of the COVID-19 Crisis, and Support Struggling Communities[1].”

This post deals with frequently asked question about the Democrats proposal for $1,400 direct payments.

Who is eligible for the direct payments?

As part of the $1.9 trillion American Rescue Plan, the Biden administration’s plan is intended to deliver immediate relief to working families by sending $1,400 per person checks to households across America. Unlike the previous rounds of direct payments, both Democrats and Republicans agree that direct payments should be targeted towards low- and moderate-income families. However, there is still disagreement between Republicans and Democrats on the amount of household income that would qualify[i].

The Republican party’s proposed package would have included $1,000 checks to individuals and families, capping the income qualifications at $50,000 for individuals and $100,000 for families.

In the Democrat’s proposed package, individuals with incomes up to $75,000 would get the full $1,400 payment. Heads of household earning up to $112,5000 and married couples with earnings up to $150,000 would get a $2,800 payment[2].

Like prior rounds of the stimulus checks, people who earn slightly above those thresholds would still qualify for some portion of the payments.

Will adult dependents be getting the money? 

Adult dependents are eligible for direct payments under the Democrats’ current plan. In the two prior rounds of payments, people over the age of 17 who could be claimed as a dependent on someone else’s tax return – such as college students and disabled adults were not eligible for any direct payments[3].

How soon can you get the stimulus check? 

At the earliest, stimulus checks could be in people’s hands during the last two weeks of March. This is when jobless Americans will start to lose unemployment benefits, so Congress has a deadline.

Once the legislation is signed, the payments could start going out in a matter of days. The majority of the previous direct payments went out within three weeks if the recipient used electronic tax filing for direct deposit of return in the previous tax year. Mailed checks will take longer, especially because of the tax season.

Will Families with kids get more money? 

Senior Democrats, as part of Biden’s American Relief plan, are currently drafting legislation that would give parents of children an additional $1,400 per child. This would mean a family of four would receive $5,600.

Democrats are also separately pushing to expand the child tax benefit that would provide $3,600 a year per child up to six and $3,000 per year for every child age 6 to 17. The idea is that parents would get monthly payments of $250 to $300.

The child tax credit currently provides $2,000 a year for children till the age of 16[4].

Who qualifies for the child tax credit? 

Couples who earn up to $150,000 a year and single parents who earn up to $112,500 a year would be eligible to receive $3,000 a year per child through 17 and $3,600 per child younger than 6.

All couples with children who earn up to $400,000 would still be eligible for the $2,000 child tax credit[5].

What is Senator Mitt Romney’s plan?

With some bipartisan support, Senator Mitt Romney will introduce the Family Secure Act on Thursday, February 11th, which would create a universal child allowance. The plan is to send $250 a month per child from 6 to 17 and $350 a month for newborns to 5-year-olds[6].

How is Romney’s plan different from Biden’s?

First, everyone, including wealthy families, would be eligible.

Second, Romney’s Family Secure Act would be paid for by cutting Temporary Assistance for Needy Families, a welfare program, and other federal tax credits for children and working families. Some liberal Democrats said Romney’s plan could be improved by maintaining the tax credits and welfare programs. They argue that cuts into critical forms of support for low-income families is unwise and that there are better financing options out there. Others like Matt Bruenig, founder of a left-leaning think tank, said that Romney’s plan’s benefits could provide enough support, which would outweigh the potential downsides of eliminating the welfare and tax credit programs[7].

Will more aid follow? 

Biden’s plan does call for extending additional unemployment payments of $400 per week through September.

Nevertheless, for individual assistance, this is likely the last big package. The measures that follow will probably focus more on the economy than Covid[8].

Does this bill have bipartisan support? 

Biden’s $1.9 trillion American Rescue Plan does have support from both Democrats and Republicans; however, lawmakers have a hard time deciding exactly who gets the money.

Biden may borrow some of the Republican party’s plan for income limits for his own package to help the bill move along. But even if an agreement cannot be met, the Democrats could use budget reconciliation, a legislation tool. This process allows Congress to advance specific spending and tax bills on a simple majority vote; this means lawmakers do not need the 60-vote threshold most legislation must meet to be considered. Lawmakers would simply need a majority vote (51-50)[9].

 

 

 

 

 

 

[1] “President Biden Announces American Rescue Plan”

https://www.whitehouse.gov/briefing-room/legislation/2021/01/20/president-biden-announces-american-rescue-plan/

[2] Subtitle G- Promoting Economic Security, Part1- 2020 Recovery Rebates

https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/7.%20Tax_sxs.pdf

The Washington Post – “Here’s the new Democratic plan for $1,400 Stimulus Payments

https://www.washingtonpost.com/business/2021/02/03/biden-stimulus-checks-what-you-need-to-know/

 

[3]The Washington Post- “Here’s the new Democratic Plan for $1,400 Stimulus Payments”

https://www.washingtonpost.com/business/2021/02/03/biden-stimulus-checks-what-you-need-to-know/

[4]The Washington Post-“Democrats want to give parents $250 a month. Here’s who qualifies.”

https://www.washingtonpost.com/business/2021/02/10/child-tax-credit-what-you-need-to-know/

[5] The Washington Post-“Democrats want to give parents $250 a month. Here’s who qualifies.”

https://www.washingtonpost.com/business/2021/02/10/child-tax-credit-what-you-need-to-know/

[6]The Washington Post- “Mitt Romney unveils plan to provide at least $3,000 per child”

https://www.washingtonpost.com/us-policy/2021/02/04/romney-child-benefit-stimulus/

[7] The Washington Post- “Here’s the new Democratic plan for the $1,400 Stimulus Plan

https://www.washingtonpost.com/business/2021/02/03/biden-stimulus-checks-what-you-need-to-know/

[8] The Washington Post- “Here’s the new Democratic plan for $1,400 Stimulus Payments”

https://www.washingtonpost.com/business/2021/02/03/biden-stimulus-checks-what-you-need-to-know/

[9] The New York Times- “How Biden Could Use Reconciliation to Speed Through His Pandemic Aid Problem”

https://www.nytimes.com/2021/01/27/us/politics/budget-reconciliation-coronavirus-stimulus.html