Democrats propose leaving out high earners from stimulus checks and trimming jobless benefits
In the initial stimulus drafts for the budget vote, senior House Democrats proposed cutting unemployment benefits and economic reviews from the president's original $ 1.9 trillion proposal, but they didn't lower the direct payments income thresholds as much as it did the Republicans had previously proposed.
"Our nation is fighting, the virus is still not contained, and the people of America anticipate that Congress can handle this moment with bold, immediate action," said Richard E. Neal (D-MA), chairman of Ways and Means Committee, in a statement Monday. "Later this week, the Ways and Means Committee will take a critical step to meet this challenge and show the country that help is on the way."
Read more: What to do if you haven't received your stimulus check
Despite pressure from Republicans, the Democrats have not lowered the amount of $ 1,400 stimulus checks nor lowered the income thresholds of $ 75,000 per person and $ 150,000 per couple. However, individuals earning more than $ 100,000 and joint applicants earning $ 200,000 will not be eligible for payments under the current proposal. This is because the Democrats adjusted how quickly the payments would expire.
Boston, MA. - FEBRUARY 8: Richard Neal, Chairman of the US House Ways and Means Committee, speaks at a press conference on February 8, 2021 at the State House in Boston, Massachusetts. (Staff photo by Matt Stone / Boston Herald)
Under Biden's original American Rescue proposal, high-income households earning $ 247,400 to $ 601,700 would receive an average payment of $ 930, compared to paying $ 280 for the same group under the new plan of the House Democrats, according to an analysis by the Institute on Taxation and Economic Policy.
Unemployment benefits are also different from the President's proposal.
Read more: Here's what's in Joe Biden's $ 1.9 trillion rescue plan that could help your wallet
Under Biden's plan, the additional weekly unemployment benefit amount would be increased from the current $ 300 to $ 400 per week. These benefits, as well as two major unemployment programs, would be extended until September. The Ways and Means Committee would not extend this until the end of August.
The committee would also extend Biden's increase in child tax credits. The president proposed increasing the tax credit to $ 3,600 for children under six and to $ 3,000 for eligible taxpayers for children between the ages of six and 17. The committee has made a provision that allows American families to receive monthly payments on the loan for one year starting in July.
"This is where the freest debate takes place"
The nine bills introduced by the House Ways and Means Committee are the first drafts of each section and are subject to change during the markup process starting Wednesday.
"Any member of the committee can propose a change and put it to a vote," Mark Harkins, former congressional staff member and senior fellow at the Government Affairs Institute in Georgetown, told Yahoo Money. "This is where the freest debate takes place, as the chairman is unable to block German amendments, as the regulatory committee can when a bill is being examined on the floor of the house."
After other House Committees have marked their sections, all sections are referred to the Budgets Committee and submitted for review. Whether the Reconciliation Act becomes law depends on whether it would receive 51 votes in the Senate.
To do that, Democrats would need to support the entire Democratic caucus in the Senate, along with Vice President Kamala Harris' tied vote to get the legislation through. However, it remains unclear whether the bill will be supported by more centrist Democrats like Senator Joe Manchin (D-WV), who support more targeted stimulus payments than Biden's original proposal.
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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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