DCR Politics & Policy: House Democrats reject plan to sharply curtail $1,400 stimulus payments in coronavirus relief package.☕☕☕

Ayyyeee… What’s Goodie Everyone. So I got some tea and it involves House Democrats and the a new Built stimulus package.

House Democrats proposed sending $1,400 stimulus payments to Americans with up to $75,000 in annual income, rejecting an earlier plan under consideration to sharply curtail the benefits. House Ways and Means Chairman Richard E. Neal (D.Mass.) released legislation that would send the full stimulus payment to individuals earning $75,000 per year and couples earning $150,000 per year. Congressional Democrats had explored curtailing that benefit to $50,000 for individuals and $100,000 for married couples, a position embraced by Sen. Joe Manchin III, Democrat from West Virginia.

Democrats are accelerating the rate at which the stimulus payments decline for higher income earners, a move intended to prevent wealthy Americans from receiving the benefit. Under the new plan, singles earning $100,000 a year and couples earning $200,000 would receive no stimulus payments. The stimulus checks would be based on taxpayers 2019 or 2020 income returns, according to a summary of the proposal. The plan would aim to give full payments to those who qualify based on their 2020 returns, even if those are not processed for months.

The new proposal comes amid days of internal disagreements among Democrats over how to structure the next round of stimulus payments, a core component of Biden’s plan. The legislation still must be passed through the House and Senate, and it is unclear whether Manchin or other conservative Senate Democrats will object to the proposal. The stimulus checks would be based on taxpayers’ 2019 or 2020 income returns, according to a summary of the proposal. The plan would aim to give full payments to those who qualify based on their 2020 returns, even if those are not processed for months.

The measure would also extend federal unemployment benefits, now set to expire in mid March, through the end of August and increase the benefit amount from its current level of $300 a week to $400. Biden’s initial plan called for funding additional unemployment benefits through September. Along with the stimulus payments, the House Ways and Means Committee released details Monday of other significant parts of the aid package, including a new child income tax credit for millions of American households. That benefit would offer $3,600 per child over the course of a year for each child under 6, as well as $3,000 per child for each one age 6 to 17. Those child tax benefits would diminish for singles earning more than $75,000 a year and couples earning over $150,000.

The design of the payments has emerged as one of the most hotly debated provisions in the rescue package. Centrist lawmakers such as Manchin have called for narrowing the payments to prevent them from going to higher income Americans, arguing that those who have not lost their jobs do not need help. That idea was met with increasing resistance from other members of the party, including Senate Finance Committee Chairman Ron Wyden (D.OR.), as well as Senate Budget Committee Chairman Bernie Sanders (I.VT.) and House lawmakers in the Congressional Progressive Caucus. Asked about the new thresholds after Neal’s plan was released, Manchin did not immediately attack them and said he was “just trying to make sure that people [receiving them] are truly in need.”

Manchin has influence over the issue, because the Senate is split 50-50 between Republicans and Democrats and the Democrats need his vote as they aim to push the legislation forward without GOP support. Wyden and Sanders have publicly criticized the proposals to lower the income thresholds to $50,000, saying middle class families have suffered pay cuts and other economic shocks and need relief, too. Sen. Jon Ossoff (D.GA.), whose election victory in January helped seal Democrats Senate majority, also opposes lowering the threshold on the payments, according to a spokeswoman.

The debate about the payment thresholds represents one of many disputes Democrats may face as they try to pass Biden’s $1.9 trillion stimulus package through Congress. There is a wide ideological gulf between the party’s moderate and liberal wings, which is likely to produce numerous policy fights over the $15-an-hour minimum wage, the scale of unemployment assistance, and the overall cost of the bill. While passing a budget resolution through Congress earlier this month that set the stage for approval of the broader relief bill, Manchin and Sen. Susan Collins (R.ME) co-sponsored an amendment to exclude affluent families from the stimulus payments. The plan did not define an income amount, leaving that open to interpretation. Sanders and all Democrats voted for the proposal.

The split within the party appeared to intensify over the weekend. Manchin told WV News last week that he supported the next round of payments not going to individuals earning more than $50,000 or couples earning more than $100,00.
“An individual of $40,000 income or $50,000 income would receive it, And a family who is making $80,000 or $100,000, not to exceed $100,000, would receive it,” Manchin said. “Anything over that would not be eligible, because they are the people who really are hurting right now and need the help the most.”

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