Republicans' stimulus check plan has a flaw that may keep money from millions of Americans. It's not getting the news coverage it deserves.
Senate Republicans have reportedly reached a deal to pass their $2 trillion stimulus bill, which will include direct payments to Americans in response to the economic impact of the coronavirus pandemic. But some news coverage of the legislation hasn’t mentioned a problem with the bill that may prevent millions of lower-income and disadvantaged Americans from receiving the money they need.
The new legislation includes more spending and benefits than were included in the GOP’s first version of the bill, which was defeated over the weekend. While the text of the legislation hasn’t been made public yet, it reportedly includes structured oversight of $500 billion in loans to large companies, larger and longer lasting unemployment insurance payments compared to current benefits, $350 billion in loans for small businesses, a tax credit for businesses to keep workers employed even if they were forced to shut down, and more than $100 billion in funding for hospitals.
The new version of the bill keeps the direct payment of $1,200 per adult plus an extra $500 per child, and it eliminates one provision in the first version that would have kept this benefit from the poorest Americans by requiring they earned a certain minimum income to qualify for the full payment. But Vox explained that there is still a problem with the bill that may keep millions of Americans who need this money the most from receiving it:
The latest version of the Senate bill offers its full cash benefits — $1,200 per adult tax filer, $500 per child — to even the poorest Americans, correcting a big problem with the first GOP draft of the bill that left out low-income people entirely. But you need to have filed taxes for 2018 or 2019 to get the benefit, which leaves out millions of Americans who do not typically need to file.
Nonfilers typically either rely on mostly nontaxable income — like Social Security retirement or disability benefits or retirement income from a Roth account — or do not have enough money to owe taxes. Either way, they tend to be among the most economically vulnerable people in the country.
Vox also reported that the bill “would require these people to file 2019 returns to get their coronavirus checks,” describing this requirement as a “potentially significant burden, especially at a time when the IRS’s volunteer tax prep centers for low-income people are largely shut down due to social distancing.” According to the Center on Budget and Policy Priorities, this group of Americans could total 30 million people, “including those with incomes so low that they aren’t required to file returns for federal taxes and millions of seniors, people with disabilities, and veterans.” The CBPP emphasized that “this seemingly technical issue will determine whether millions of low-income people in fact receive stimulus payments.”
But at least some recent news coverage of the stimulus checks in the new version of the bill has failed to mention this important fact.
The measure would also provide $1,200 direct payments to taxpayers, substantially increase jobless benefits and send money to states struggling to weather a huge public health and economic disaster. Mr. Schumer said Republicans had agreed to extend unemployment insurance for an additional month at Democrats’ insistence, for a total of four months. The two sides had previously agreed to expand the program considerably, to include self-employed and part-time workers who traditionally have not been eligible, and to cover 100 percent of wages to the average worker.
Under the newly negotiated terms, those already on unemployment before the crisis would also see their benefits extended 13 weeks beyond when they are currently set to run out, according to a Democratic aide familiar with the talks.
The Senate bill, unprecedented in its size and scope, would send $1,200 checks to many Americans, create a $367 billion loan program for small businesses, and establish a $500 billion lending fund for industries, cities and states. Lawmakers and the White House were bombarded with lobbyists and special interest groups seeking assistance in the package, and the legislation more than doubled in size in its final days.
The legislation ensures that these taxpayer-backed loans cannot go to firms controlled by President Trump, other White House officials or members of Congress. This would suggest that Trump-owned properties, including hotels that have been impacted, cannot seek taxpayer assistance.
Other provisions include $150 billion for state and local emergency aid and $130 billion for hospitals.
It would significantly boost unemployment insurance benefits, expanding eligibility and offering workers an additional $600 a week for four months, on top of what state unemployment programs pay. Millions of Americans have filed for unemployment benefits in the past few weeks, flooding a system that isn’t designed to cope with a sudden wave of applicants.
Congress readied to pass an estimated $2 trillion stimulus package aimed at combating the economic consequences of the coronavirus pandemic, hours after legislative leaders and the Trump administration struck a deal.
The Senate plans to vote on the mammoth bill on Wednesday, though full text hasn’t been released. The legislation will provide direct financial checks to many Americans, drastically expand unemployment insurance, offer hundreds in billions in loans to both small and large businesses, and extend additional resources to health-care providers.
While the final terms of the bill remained under wraps early Wednesday, the legislation is expected to provide for one-time checks worth $1,200 to many Americans, with $500 available to children, with the assistance capped above certain income levels.
Those payments would be in addition to a broad expansion in unemployment benefits, which would be extended to nontraditional employees, including gig workers and freelancers, that Senate Minority Leader Chuck Schumer (D., N.Y.) had pushed for, according to a Democratic aide familiar with the negotiations. The agreement is also set to increase current unemployment assistance by $600 a week for four months.
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