Senate Republicans will most probably introduce their proposed long-awaited stimulus package. Here is what is likely inside.
Senate Majority Leader Mitch McConnell (R-KY) wants second stimulus $1,200 checks included in the proposed stimulus package, according to the Associated Press. However, White House negotiators, McConnell, Chief of Staff Mark Meadows, and Treasury Secretary Steven Mnuchin, have not confirmed the amount of the second stimulus checks or the criteria to revive a second stimulus check.
The first stimulus check under the Cares Act was up to $500 for dependents, $1,200 for each individual, and $2,400 for married/joint filers. If you earned less than $150,000 (married/joint filers) or $75,000 (individuals), you could receive $1,200 for the first stimulus check. The first stimulus checks phased out above those income limits until $198,000 for married/joint filers and $99,000 for adjusted gross income individuals. Moreover, there have been countless proposals concerning second stimulus checks since the Cares Act. This includes keeping the same $1,200 one-time stimulus check to $2,000 a month. McConnell suggested that second stimulus checks might only be available to Americans who earn up to $40,000 a year. However, that $40,000 threshold most probably will not be in the proposed stimulus.
Republicans are leaning toward a proposal of $200 per week for unemployment benefits. They do not want the $600 a week Congress authorized stimulus under the Cares Act. That is what the Associated Press reports. Many Republicans believe that the $600 a week unemployment benefit creates a disincentive for recipients to return to work. Also, they argued that some recipients could earn more from unemployment benefits than from employment.
Thus, Republicans settled to extend unemployment benefits without creating the same situation concerning a disincentive to return to work. In this stimulus proposal, unemployment benefits will extend through to December 31, 2020. Unemployment benefits will expire without congressional intervention. Congress can use a stop-gap measure while they finalize terms for unemployment benefits after July. The White House and Senate Republicans rallied around Senator Rob Portman (R-OH), who proposed a $450 a week cash return-to-work bonus.
The United States President, Donald Trump, said that he would consider vetoing the stimulus package. This will happen in the case that it does not include a payroll tax cut, which he believes is a pro-growth strategy for stimulating the economy. A payroll tax cut will eliminate or reduce Social Security and Medicare tax.
Both employers and employees can benefit since employers are contributing as well. The payroll tax cut might be structured as a payroll tax deferral rather than an upfront tax cut. A payroll tax deferral means that the payroll tax can be owed later. Thus, it will provide upfront savings. Nevertheless, it is not clear if legislators will eventually forgive the payroll tax before it is due. Moreover, it is unclear if Americans will be required to pay in the future. However, Republicans may propose other tax breaks or financial incentives to businesses instead of the tax cut for payrolls.
Let us see what they will propose.