The White House is pushing full steam ahead on another relief deal, but one thing lawmakers seem hung up on: Who should get the next round of $1,400 stimulus checks?
Some Democrats are floating the idea of lowering the income thresholds for the $1,400 direct payments to individuals earning $50,000 or less, and $2,800 to married couples earning $100,000 or less. That’s down from the previous two rounds of checks, which began phasing out at $75,000 for individuals and married couples filing jointly with incomes under $150,000. Republican lawmakers have supported lowering the income thresholds (some recently proposed their own limits).
But according to newly appointed Treasury Secretary Janet Yellen, that $50,000 threshold likely isn’t going to fly.
Yellen said on CNN’s State of the Union on Sunday that those earning $60,000 a year should be eligible for the payments.
“If you think about an elementary school teacher or a policeman making $60,000 a year and faced with children who are out of school and people who may have had to withdraw from the labor force in order to take care of them and many extra burdens, [President Joe Biden] thinks, and I would certainly agree, that it’s appropriate for people there to get support,” she said.
Some Democratic lawmakers are pushing back on the idea of the lower income thresholds. Sen. Bernie Sanders called the floated $50,000 level “unbelievable” on Twitter, while Rep. Alexandria Ocasio-Cortez tweeted that it is “sad that this is even an argument in the Dem party. COVID relief is disaster relief, & it’s urgent,” adding that a $50,000 cutoff was “wack.” Part of the argument, according to Sanders (who also spoke on CNN), is that those who were promised $2,000 by Democrats and already received $600 checks should be able to get the other $1,400.
Last month Biden said he is open to negotiating the thresholds, and that the payments should be more targeted to those in financial need. Yellen indicated on CNN that while the income levels should be higher than $50,000, they shouldn’t necessarily be $75,000 either.
“President Biden is certainly willing to work with members of Congress to define what’s fair, and he wouldn’t want to see a household making over $300,000 receive these payments,” Yellen said.
Calls to target the payments have garnered support from some economists. Moody’s chief economist Mark Zandi argues, “from a policy perspective,” lowering the income thresholds “would benefit the economy the most and help the people who need it the most,” while Brett Ryan, senior U.S. Economist at Deutsche Bank, recently told Coins2Day, “You want to target those with the largest marginal propensity to consume in order to have those dollars go back into the economy and have the largest impact. You don’t want that check just to be saved.”
Those income thresholds (and cutoffs) will likely be figured out soon. Last week Democratic leaders initiated the budget reconciliation process, a key step required to get the bill through the U.S. Senate. Then on Friday, House Speaker Nancy Pelosi told reporters that they plan to pass a package in the Democratic-controlled House within the next two weeks, and starting Monday they would work on nailing down the details of the bill.
