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How negotiations over second $1,200 stimulus checks could shape up

Joshua Roberts | Reuters

Capitol Hill lawmakers seem to agree on one thing: Sending a second round of stimulus checks to help Americans weather the economic storm brought on by the Covid-19 pandemic is is  worthwhile.

But the conditions around who gets those checks could still be subject to change, particularly when it comes to how much money goes to dependents.

Democrats and Republicans have both called for a second round of $1,200 checks in their legislative proposals. Democrats, however, were more generous, calling for raising dependent pay to $1,200 each, up from $500, and capping that pay at three dependents per family.

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Senate Republicans last week proposed stimulus payments that mirrored the first round — $1,200 per individual or $2,400 per married couple, plus $500 per dependent.

Last week, one group of Republicans introduced another bill that would lower the payments to $1,000. Under that plan, however, dependents would also be eligible for the same amount. The bill, called the Coronavirus Assistance for American Families Act, was proposed by Sens. Bill Cassidy, R-La.; Steve Daines, R-Mont.; Mitt Romney, R-Utah; and Marco Rubio, R-Fla.

Under all of the plans, all dependents would be eligible. The first stimulus checks were limited to those dependents under 17.

“I think part of the motivation of the Republicans was to try to provide additional assistance to families with children, and to somehow help them,” said Bill Hoagland, senior vice president at the Bipartisan Policy Center and a former Senate staff member.

That may mean the bill’s sponsors could get the attention of House Speaker Nancy Pelosi.

“My guess is that might be an outcome here that she could accept,” Hoagland said, noting that previous bills are “probably weak on child care assistance.”

Why unemployment matters

Florida resident Joseph Louis at a May 22 protest in Miami Beach asking the state to fix its unemployment system.

Joe Raedle | Getty Images

Washington politicians face a larger stalemate over other issues, particularly how much in expanded federal unemployment benefits to continue to provide the millions of Americans who are out of work.

Democrats have proposed continuing the extra $600 per week through January. Republicans have said that some workers are earning more on unemployment with that assistance, and consequently might not want to return to work.

The battle over unemployment relief could affect how large the stimulus checks will be.

I don’t think moving a dollar amount from X to Y changes things. But changing the eligibility does.

Mark Mazur

director at the Urban-Brookings Tax Policy Center

“If you’re going to knock down the $600 [unemployment] to $400 or $500, you could be filling in a portion of that with this stimulus payment,” Hoagland said. “The math on it might be one that you could work out at the end of the day.”

When it comes to $1,200 versus $1,000 for stimulus checks – or $600 per week versus $200 in expanded federal unemployment benefits – the issues are connected, said Mark Mazur, director at the Urban-Brookings Tax Policy Center.

“There’s a whole bunch of different approaches, but they do overlap a lot,” Mazur said. “It’s all the same parts.

“It’s just a matter of figuring out what the dollars are for each of those parts.”

How quickly the payments could be sent

U.S. Treasury Secretary Steve Mnuchin and White House Chief of Staff Mark Meadows at the U.S. Capitol on Aug. 1.

Stefani Reynolds/Bloomberg via Getty Images

Treasury Secretary Steve Mnuchin said in an interview this weekend that the White House and Democrats agree on the second set of checks.

Mnuchin also said that the second round of checks should go out much faster this time around — as soon as one week after the legislation is finalized.

How fast the government can send those payments could depend on the changes that are made.

“I don’t think moving a dollar amount from X to Y changes things,” Mazur said. “But changing the eligibility does.”

In addition to raising pay for dependents, Republicans who proposed the $1,000 checks last week also called for giving Americans who are married to non-citizen spouses (those without Social Security numbers) access to the stimulus check money.

But in order to cut costs, their plan would reduce payments for individuals and couples without children. The Tax Foundation estimates that would lead to savings of about $30 billion to $35 billion, which would help offset the approximately $60 billion increase for dependent pay.

It still remains to be seen whether changing the terms of the checks will get broad support.

However,  those differences are minor compared to other compromises facing lawmakers.

“I really feel that this one could be resolved in a very short amount of time,” Hoagland said. “It won’t take long at all.

“It’s those other issues that are holding it up.”

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