MARCH 11, 2021
Covid-19 Economic Stimulus Check. – Getty Images/iStockphoto
President Joe Biden on Thursday afternoon signed the $1.9 trillion American Rescue Plan into law, paving the way for his administration to deliver expanded unemployment, direct cash and other coronavirus relief to millions of Americans.
Mr. Biden’s move to enact the bill, which came one day earlier than expected, followed the House’s passage of the measure on Wednesday and the Senate’s approval on Saturday. “This historic legislation is about rebuilding the backbone of this country and giving people in this nation, working people, middle class folks, people who built the country, a fighting chance,” Mr. Biden said before signing the bill.
White House press secretary Jen Psaki said the first wave of direct deposit checks would begin hitting Americans’ bank accounts as soon as this weekend. Payments are expected to continue over the next several weeks.
The passage of the spending bill in the Senate was heralded by anti-poverty and unemployment experts, who said the $1,400 checks as well as other provisions — such as an extension of the $300 per-week extra jobless aid for millions of unemployed people and an expansion of the Child Tax Credit for low-income households — will help families pay their bills and lift children out of poverty.
Almost half of Americans are still experiencing financial pain one year after the pandemic shuttered the economy and caused massive layoffs, according to the Pew Research Center.
“Working families will get $1,400 per individual from a third stimulus check, plus they will benefit from a muscled-up child tax credit of $3,000 per child,” noted Andrew Stettner, an unemployment expert at the Century Foundation, a progressive think tank. “That is real aid that can help reverse the unprecedented economic inequities laid bare and exacerbated by the pandemic.”
Stettner added, “The federal response to COVID-19 has already averted poverty for millions of Americans, and this package is poised to continue that critical work.”
The House passed the bill in a vote of 220 to 211, with only one Democrat voting against the measure, Rep. Jared Golden of Maine. There were no Republican votes in support of the American Rescue Plan. The relief bill’s spending will likely boost U.S. economic growth this year, economists say, with Moody’s Investors Service on Thursday forecasting 4.7% real GDP growth in the in 2021 and 5% next year, partly thanks to the stimulus checks and other fiscal aid directed to households.
“This is the most consequential legislation that any of us will ever be a party to,” House Majority Leader Nancy Pelosi said on Wednesday after the bill’s passage.
Applause and cheers, but with income limits
The Senate passage of the bill Saturday was met with cheers and applause from Democrats, who all voted in favor of it, 50-49. Because GOP Senator Dan Sullivan left due to a family emergency on Friday, Vice President Kamala Harris did not need to visit the Capitol to break any ties. Because there were differences between the Senate’s version and the House’s legislation, which had passed earlier, the bill returned to the House for final approval on Wednesday.
New CBS News polling shows that the bill is widely popular with the public, with three in four Americans approving of its passage. Two-thirds of Americans also say Mr. Biden is doing a good job in his handling of the pandemic.
Fewer Americans are likely to receive checks in the third round of stimulus payments because the bill tightens the income threshold for qualifying for the $1,400 checks compared with the previous two rounds of direct checks.
The economic impact of COVID-19 pandemic
The American Rescue Plan directs the $1,400 direct payments to individuals earning up to $75,000, but cuts off eligibility for single people earning more than $80,000. For couples who file a joint federal income tax return, the phase-out begins at those making $150,000 and ends at $160,000. People who file their taxes as head of household will receive the full $1,400 if they earn less than $112,500, while the payments will be cut off for those earning more than $120,000.
To see how much you might receive, you can use this Omni online calculator to determine whether you qualify and your potential payment.
Some lawmakers had argued for a lower income cutoff because of research indicating that upper-income households are faring better in the pandemic-hit economy than poorer households. Hardship remains high throughout the U.S., with more than 4 of 10 adults living with children struggling to pay their bills at the end of February, according to a new analysis of Census data from the Center on Budget and Policy Priorities.
Help for families, unemployed
With the bill’s vote in the House, the bill will be signed into law before Sunday, March 14, a key date since that’s when the current extra $300 in weekly unemployment aid is set to expire. The American Rescue Plan ensures the extra $300 in weekly jobless pay will continue through September.
In addition to the $1,400 checks, the bill provides funding for small businesses; offers families with kids a tax break of up to $3,600 per child; and boosts government spending on COVID-19 testing and contact tracing.
The legislation would send $350 billion to state and local governments and tribal governments for costs incurred up until the end of 2024. The bill also requires that small states get at least the amount they received under virus legislation that Congress passed last March. Schools will also benefit, with $130 billion in additional funding targeted to schools for students in kindergarten through 12th grade.
Spending for colleges and universities would be boosted by about $40 billion, with the money used to defray an institution’s pandemic-related expenses and to provide emergency aid to students to cover expenses such as food and housing and computer equipment. And a new program for restaurants and bars hurt by the pandemic will receive $28.6 billion. Other measures include help for rental and homeowner assistance and more support to help people pay for health care premiums under the Affordable Care Act.
The two previous rounds of stimulus checks required anywhere from days to months to reach consumers’ checking accounts and mailboxes. The second stimulus check, approved at the end of December, had a faster rollout than the first, with some people receiving their checks just days after the bill was signed into law.
How U.S. can pay for Biden’s relief plan
The IRS relies on a taxpayer’s most recent tax return to determine how much they should receive and when they might receive it. That’s why some tax experts are urging taxpayers to file their returns as soon as possible, especially if they had a major life change last year, such as the birth of a child or the loss of a job or income in 2020.
Because the IRS officially started accepting tax returns on February 12 and is slated to close the filing window on its customary date of April 15 for most Americans, the bill will be signed into law during the middle of tax filing season.
If a taxpayer doesn’t file their 2020 tax returns before the bill is signed into law, the agency will likely rely on their 2019 tax return to calculate their stimulus check payment — and that 2019 return might not reflect income losses during last year’s economic crisis or a new child, for example. In that case, a taxpayer might not receive as much stimulus money as they are entitled to.
Here are the income limits for checks
A person’s income is the chief determinant of whether they’ll get a check, as well as the payment amount.
The payments will amount to $1,400 for a single person or $2,800 for a married couple filing jointly. Only individuals earning up to $75,000 would get the full payments, as would married couples with incomes up to $150,000. Payments would decline for incomes above those thresholds.
The bill cuts off single people with incomes over $80,000 and married couples earning more than $160,000. Under the first stimulus check, the cut-offs were higher, at $100,000 for individuals and $200,000 for married couples.
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Some lawmakers have argued that the checks should be targeted to lower-income families, citing research that shows that higher-income families are rebounding from the pandemic’s economic impact. But other research signals widespread financial pain throughout the nation, with the ranks of adults experiencing financial hardship last month little changed from December, according to Morning Consult economist John Leer.
A third round of $1,400 checks would allow nearly 23 million adults to pay their expenses for more than four months without going into more debt or eating into their savings, his analysis found.
“That third stimulus check is absolutely vital,” Credit Karma Chief People Officer Colleen McCreary told CBS MoneyWatch. “I don’t see a world where people will have their financial footing without some additional stimulus money.”
Courtesy/Source: CBS News
