(CBS Detroit) — A third stimulus check is now being discussed in the Senate. The $1,400 relief payment is an integral part of President Biden’s $1.9 trillion economic relief package, which aims to address the economic fallout from COVID and set the economy on better footing. It has both Democratic and Republican support and is anticipated to be included in the American Rescue Plan’s final version. The broader package passed by the House also contains higher unemployment benefits, an improved child tax credit, and much more. While a third check seems destined for bank accounts, the specific timeline is still up in the air.
When Could My Stimulus Check Arrive?
The administration hopes to sign the American Rescue Plan into law by March 14. That is the day when the current $300 federal unemployment benefit bonus expires. Assuming President Biden can sign the relief package then, direct deposits would likely start the week of March 22, with checks beginning to arrive the week of March 29.READ MORE: Third Stimulus Check: Why Your Next Relief Payment May Not Be $1,400
That March 14 target date could very well slip, however. The House passed the American Rescue Plan early this past Saturday morning with minimal changes. But the bill faces a rockier road in the Senate when when voting starts on Thursday. The body’s official parliamentarian recently ruled that the minimum wage hike isn’t related to the budget and therefore can’t be passed using reconciliation, the process that allows bills to proceed with a simple majority. It will have to be reworded or stripped out. The latter is much more likely, given the reservations of centrist Democrat Joe Manchin of West Virginia. Senate Democrats have also questioned other aspects of the stimulus package, such as the framework for extended unemployment benefits and the money allocated for states and localities. Some critics think the overall bill is too expensive given the recent economic upswing.
If the upper chamber passes the relief package with any amendments, it would return to the lower chamber for another vote. Supposing the stimulus package leaves Congress by March 22, it would likely be signed into law on March 23. Direct deposits would start arriving in bank accounts by March 29, and checks would start being mailed on April 5.
The House could have its own issues with the Senate’s amendments, further delaying the process. If the stimulus package makes it out of Congress by April 5, the President would probably sign it on April 6. Direct deposits would start arriving in bank accounts by April 12, and checks would start being mailed on April 19. The timeline could be extended for any number of reasons.
What Could Delay My Stimulus Check?
One possible speedbump for the next stimulus check is the turmoil that has surrounded the $15 minimum wage. The House passed the American Rescue Plan with the increase included. But the Senate’s official parliamentarian recently ruled that the minimum wage hike isn’t related to the budget and therefore can’t be passed using reconciliation, the process that allows bills to proceed with a simple majority. It will have to be reworded or stripped out. A backup plan, whereby large corporations are penalized for paying workers less, also seems to be going nowhere.
On the off chance Democrats find a way to reword the minimum wage provision, Manchin, the party’s most conservative member in the Senate, still only supports an $11 per hour minimum wage. How progressives in the House react to a reduced or — most likely — removed increase is another concern. Congresswoman Alexandria Ocasio-Cortez from New York has suggested that the far-left wing pressure the party like its conservative wing in the Senate has. Would they withdraw support, or otherwise delay the process? That remains to be seen.
Senate Democrats have also questioned other aspects of the stimulus package, such as the framework for extended unemployment benefits and the money allocated for states and localities. Concern about who receives stimulus checks led to an agreement between the President and centrist Democrats to phase out stimulus payments more quickly. That also may not sit well with progressives, who previously opposed cutting the income cap on checks.
Senate Majority Leader Chuck Schumer seems confident that the bill will be passed this week. “We want to get the biggest, strongest, boldest bill that can pass. And that’s what we are working to do,” the Senator said to reporters. “We’ll have the votes we need to pass the bill.”
Distributing the third stimulus check could also create delays. The Internal Revenue Service (IRS), the agency charged with sending out payments, is right in the middle of tax season. While CARES Act checks went out around the same time last year, the tax deadline was pushed from April 15 to July 15. No extension has been announced this year. The IRS will have to handle the dual burden of sending out millions of relief payments while accepting and processing millions of tax returns.
What Could Reduce My Stimulus Check?
The topline $1,400 number that’s drawn so much attention seems destined to become a reality. But the actual amount that people receive could change based on income restrictions, the number of dependents and other factors.
The previous two stimulus checks phased out for individuals with an adjusted gross income (AGI) over $75,000 per year and married couples with an AGI over $150,000. (AGI is the total of one’s wages, interest, dividends, alimony, retirement distributions and other sources of income minus certain deductions, such as student loan interest, alimony payments and retirement contributions.) For every dollar of income over the threshold, the previous two stimulus payments decreased by five percent. So the $1,200 payment from the CARES Act shrank to $0 for incomes over $99,000 ($198,000), and the $600 from the second stimulus shrank to $0 for incomes over $87,000 ($174,000).READ MORE: Third Stimulus Check: How Could The Economic Relief Package Put More Money In Your Pocket?
The idea of changing the annual income requirement had gathered some steam. In early February, Democratic Senator Joe Manchin of West Virginia and Republican Senator Susan Collins of Maine proposed an amendment aimed at “targeting economic impact payments to Americans who are suffering from the effects of COVID–19, including provisions to ensure upper-income taxpayers are not eligible.”
To that end, the Biden administration has reportedly agreed to phasing out checks more quickly. So while the threshold would remain at $75,000 ($150,000), those earning $80,000 ($160,000) or more would receive nothing. If the phase out progresses at a constant rate — in this case, 32 percent — that would mean people would receive $.32 less for every $1 they earned over the limit.
Biden agrees to phase out checks faster, per Dem source: pic.twitter.com/00WTBgcSPJ
— Erica Werner (@ericawerner) March 3, 2021
The idea behind targeting stimulus checks to reach lower-income people is to better ensure that the money gets spent in the broader economy rather than saved. According to a survey from the Federal Reserve Bank of New York, the average percentage of the first stimulus payment that a household spent on essentials decreased as income increased. The average percentage of the first stimulus payment that a household saved increased as income increased.
While speeding up the phase out would better target the economy, it would also reduce the number of people receiving a third stimulus check and the amount received by others. Upwards of 30 million CARES ACT payments were received by households with incomes above $75,000. Most of those would not receive a check if a faster phase out were implemented. Those earning between $75,000 and $80,000 would not receive the full $1,400.
Why Do We Need Stimulus Checks?
The economy shrank by 3.5 percent in 2020, the largest single-year decline since the end of World War II. Weekly unemployment figures remain historically high, with approximately 730,000 people initially applying for unemployment insurance in the third week of February. (For reference, a typical pre-pandemic week saw about 250,000 new unemployment applications.) An additional 451,000 sought Pandemic Unemployment Assistance. Another 1 million people received Pandemic Emergency Unemployment Compensation, benefits for those whose unemployment aid has otherwise run out. That group now totals 5 million people.
At the start of February, approximately 19 million people were receiving unemployment benefits of one kind or another. That’s one out of every nine workers. While the official unemployment rate is 6.3 percent, the actual rate is probably closer to 10 percent, given all the people who have dropped out of the labor force.
An economic bounceback depends on the widespread distribution of a COVID vaccine. But efforts to inoculate the public have proceeded sluggishly at times. Shortages and winter weather have forced some areas to temporarily close vaccination centers and scale back administering the vaccine in recent weeks. Many who qualify have faced problems in scheduling appointments. Nevertheless, over 50 million people have received at least one dose of a vaccine.
The Food & Drug Administration just authorized Johnson & Johnson’s one-shot vaccine. Four million doses shipped on Monday. Biden stated yesterday that the country will have enough doses to vaccinate all Americans by the end of May. But mask-wearing and a general lack of normalcy could continue into 2022. Currently, domestic COVID cases exceed 28 million, while deaths have reached 518,000.MORE NEWS: Stimulus Check Latest: Parents Could Receive Monthly Payments With Expanded Child Tax Credit
Originally published February 4 @ 6:06 p.m. ET.