After the January 2021 runoff elections in Georgia, the U.S. Senate took on the slightest blue tinge, as there are now 50 Republican senators and 50 Democratic senators, and Vice President Kamala Harris counts as the tie-breaking vote.
Thanks to this slim majority and reconciliation laws that allow budget-related bills to pass with a simple majority vote, the doors have opened for a third COVID-19 stimulus package.
The House of Representatives passed a pared-down $1.9 trillion stimulus package by a 219-212 vote this week. The “nay” votes included a pair of Democrats and all Republicans.
Democrats plan to present the bill on Wednesday, March 3 and begin the debate in the Senate.
Let’s see what proposals in the bill may impact you and how.
The most impactful portion of this bill for most Americans will be additional stimulus checks heading directly to taxpayers.
The current proposal is a $1,400 check for each taxpayer who made less than $75,000 in 2019 and filed an individual tax return. Married couples filing joint taxes must have earned less than $150,000 in 2019. Those who filed as head of household in 2019 must have earned less than $112,500 in 2019.
In addition to the $1,400 per taxpayer, qualifying families will also receive $1,400 per child dependent up to 17 years old and per adult dependent.
For example, a family of two adults and two child dependents could potentially receive a $5,600 stimulus check if they earned less than $150,000 in 2019.
The stimulus check amount begins to phase out for families whose household income is above the caps listed above.
Congress won’t hammer out the exact phase-out structure until the bill passes. But we do know the phase-out brackets are:
- Single or married filing separately: $75,000 to $80,000
- Head of household: $112,500 to $120,000
- Married filing jointly: $150,000 to $160,000
So, if you fall within the phase-out ranges above, you’ll receive a reduced stimulus check. If your 2019 earnings exceed the phase-out brackets, you’ll receive no stimulus check.
Another money-in-your-pocket proposal buried in the third COVID-19 stimulus bill is an increase in the child tax credits.
Currently, the child tax credit is $2,000 per qualifying child for single taxpayers who earn $200,000 or less and married taxpayers who earn $400,000 or less. Of that $2,000, just $1,400 is refundable. So, if you owe no income taxes, you’ll only get $1,400 of that $2,000 per child back as a part of your income tax refund.
If passed, the bill would push this credit to $3,600 per child under 6 years old and $3,000 for all other children through age 17. Democrats also propose making the credit 100% refundable and payable monthly starting in July 2021.
The income qualifications to receive the full child tax credit would be the same as those for the $1,400 stimulus check.
Keep in mind, if this proposal passes, and you opt for the monthly payments, you may end up getting a reduced income tax refund or owe more taxes when you file in 2022.
Of the 82.3 million hourly employees over the age of 16 in 2019, 1.6 million earned the current $7.25 federal minimum wage or less, according to the Bureau of Labor Statistics. Progressive Democrats have fought for years to get the minimum wage to $15 per hour and have enjoyed some state-level success. On the federal level, though, there’s been virtually no movement.
The $1.9 trillion COVID-19 stimulus bill aims to speed things up by proposing a progressive increase to $15 per hour through 2025. The proposal would also scrap the $2.13 tipped minimum wage and the $4.25-per-hour subminimum wage for disabled people and student workers.
While raising the federal minimum wage has mostly bipartisan support, there is also plenty of pushback on the $15-per-hour proposal from both sides. Democrats have all but lost Sen. Joe Manchin, a West Virginia Democrat, who says $15 per hour is too high for his state and proposes an $11-per-hour compromise.
Without Manchin’s support, Democrats would need at least one Republican senator to vote with them.
Making things even more difficult, the nonpartisan Senate parliamentarian, Elizabeth MacDonough, approved portions of the proposed stimulus bill for reconciliation but ruled the language surrounding the $15-per-hour wage hike doesn’t qualify. This makes a pay raise for a large portion of American workers unlikely at this time.
The House-approved bill now sits in the hands of the Senate. The official Senate vote is still unscheduled, but reports indicate it could happen as soon as Friday.
The goal is to have an approved bill on President Biden’s desk by March 14.