money Democrats propose leaving out high earners from stimulus checks and trimming jobless benefits
In the first stimulus drafts for budget reconciliation, senior House Democrats proposed scaling down unemployment benefits and stimulus checks from the president’s initial $1.9 trillion relief proposal, but they did not cut income thresholds for the direct payments as sharply as Republicans previously suggested.
“Our nation is struggling, the virus is still not contained, and the American people are counting on Congress to meet this moment with bold, immediate action,” Ways and Means Committee Chairman Richard E. Neal (D-MA) said in a statement on Monday. “Later this week, the Ways and Means Committee will take a crucial step to confront this challenge and show the country that help is on the way.”
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Despite pressure from Republicans, Democrats haven’t reduced the amount of the $1,400 stimulus checks nor lowered the $75,000-per-individual and $150,000-per-couple income thresholds. But individuals who make more than $100,000 and joint filers who earn $200,000 would not be eligible for the payments under the current proposal. That’s because Democrats did adjust how quickly the payments would phase out.
Under Biden’s initial ‘American Rescue’ proposal, high-income households making $247,400 to $601,700 would get an average payment of $930 compared with a $280 payment for the same group under the House Democrats’ new plan, according to an analysis by the Institute on Taxation and Economic Policy.
Unemployment benefits also differ from the president’s proposal.
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Under Biden’s plan, the extra weekly amount in unemployment benefits would be increased to $400 a week, up from the current $300. Those benefits along with two key unemployment programs would be extended through September. But the Ways and Means Committee would only extend those through the end of August.
The committee also would expand on Biden’s increase of the Child Tax Credit. The president proposed increasing the tax credit to $3,600 for children under six and $3,000 payment for children aged six to 17 for eligible taxpayers. The committee put forth a provision that allows American families to receive monthly payments for the credit for one year beginning in July.
‘This is where the freest debate happens’
The nine bills introduced by the House Ways and Means Committee are the first drafts on the respective sections and they may be amended during the markup process beginning Wednesday.
“Any member of the committee can put forward a change and have it voted on,” Mark Harkins, a former congressional staffer and senior fellow at Georgetown’s Government Affairs Institute, told Yahoo Money. “This is where the freest debate happens because there is no ability for the chairman to block germane amendments like the Rules Committee can when a bill is considered on the House floor.”
After other House committees mark up their sections all the sections would be forwarded to the Budget Committee and put for floor consideration. Whether the reconciliation bill becomes law depends on whether it would get 51 votes in the Senate.
To do that Democrats would support the entire Democratic caucus in the Senate, along with Vice President Kamala Harris’s tie-breaking vote, is needed to get the legislation through. But it remains unclear whether the bill would get the backing from more centrist Democrats like Sen. Joe Manchin (D-WV) who have been supporting more targeted stimulus payments than Biden’s initial proposal.
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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