This is what is inside the new stimulus package.
Senate Republicans are expected to present their long-awaited proposed stimulus package on Thursday, and this is what is likely to be inside.
This is what you need to know.
Second stimulus check
How much does the second stimulus check cost? According to the Associated Press, Senate Majority Leader Mitch McConnell (R-KY) wants a second $ 1,200 stimulus check included in this proposed stimulus package. However, McConnell and White House negotiators Treasury Secretary Steven Mnuchin and Chief of Staff Mark Meadows have not confirmed the amount of the second stimulus checks or the criteria for receiving a second stimulus check.
The first stimulus verification under the Care Act was up to $ 1,200 for each individual, $ 2,400 for married / joint filers and up to $ 500 for dependents. If you earned less than $ 75,000 (individuals) or $ 150,000 (married / joint taxpayers), you could receive $ 1,200 for the first stimulus check. The first stimulus check was phased out above those income limits up to $ 99,000 of adjusted gross income for individuals and $ 198,000 for married / joint taxpayers. Since the Care Act, there have been countless proposals for second stimulus checks, including maintaining the same one-time stimulus check for $ 1,200 to $ 2,000 per month. McConnell previously suggested that second stimulus checks may only be available to Americans earning up to $ 40,000 a year. However, that $ 40,000 threshold probably won’t be in the proposed stimulus.
Unemployment benefits / return to work bonus
the Associated Press reports that Senate Republicans are leaning toward a $ 200 a week proposal for unemployment benefits, instead of the $ 600 a week that Congress authorized under the Care Act. Why? Many Republicans have believed that the $ 600 per week unemployment benefit creates a disincentive for beneficiaries to return to work. They also argued that some beneficiaries may earn more than unemployment benefits than from employment. So Republicans decided to extend unemployment benefits without creating a disincentive to return to work. Unemployment benefits would extend until December 31, 2020 in this stimulus proposal. Without congressional intervention, unemployment benefits expire this weekend. Congress can use a provisional measure while the terms for unemployment benefits end after July. Will there also be a return to work bonus? Senate and White House Republicans had gathered around Senator Rob Portman (R-OH), who proposed a $ 450 per week cash bonus to return to work.
Payroll tax reduction
President Donald Trump said he would consider vetoing the stimulus package if it does not include a payroll tax cut, which he believes is a pro-growth strategy to stimulate the economy. A cut in payroll taxes would reduce or eliminate Medicare and Social Security taxes. Both employees and employers can benefit as employers also contribute. The payroll tax cut can be structured as a postponement of the payroll tax (instead of an advance tax cut). A postponement of the payroll tax could mean that the payroll tax could be due at a later date, which would provide savings in advance. It’s unclear whether lawmakers would eventually forgive the payroll tax before it expires, or whether Americans would have to pay it in the future. Senate Republicans seem to lean toward direct payments to Americans rather than a payroll tax cut. However, Republicans could propose other financial incentives or business tax exemptions in lieu of a payroll tax cut.
State and local aid
Republicans plan to propose $ 105 billion to open schools and $ 15 billion for child care centers, according to the Associated Press. This includes $ 70 billion for the reopening of K-12 schools, $ 30 billion for colleges and universities, and $ 5 billion for governors to spend at their discretion. Funding will be available to schools that open for in-person and remote instruction. In contrast, Democrats are targeting approximately $ 1 billion for state and local aid, and $ 430 billion to open schools. Both parties in Congress understand that state and local governments have been adversely affected by the Covid-19 pandemic. However, Senate Republicans are not proposing any new state or local aid. Why? They believe that authorization in previous stimuli is sufficient. Without federal support, however, many Democrats argue that some states and localities will face extreme financial circumstances, budget cuts, and possible bankruptcy.
Civil liability protections for companies.
McConnell made liability protection his main problem for the new stimulus. Businesses, hospitals and schools would receive five years of liability protection, retroactive to 2019. Liability protection is expected to be included in the Republican stimulus proposal.
Student Loan Forgiveness
Don’t wait for student loan forgiveness in the new stimulus. Democrats in the House of Representatives passed a weakened student loan forgiveness plan in the Heroes Act that would provide $ 10,000 of student loan forgiveness only for borrowers who are “struggling financially.” While the Heroes Act provides for an extension of these benefits, Senate Republicans (or Senate Democrats) have not made student loans a major topic of the upcoming stimulus.
Payroll protection program
The new stimulus legislation is expected to extend the Paycheck Protection Program (PPP), which expires on August 8. Republicans are proposing to use the unspent $ 134 billion previously authorized to make PPP loans.
Coronavirus test
Senate Republicans plan to propose $ 25 billion for Coronavirus testing and contract tracking. According to the Associated PressThe $ 25 billion equals the $ 9 billion already authorized in a previous stimulus plus $ 16 billion of new spending.
Final thoughts
McConnell says he will present the stimulus package in multiple bills, rather than a single legislative proposal. The total amount could increase as Democrats demand more funds for their legislative priorities, such as extending unemployment benefits and increasing aid to states and localities, among others. What is the timeline for the new stimulus? Congress has until August 7 to reach an agreement on the new stimulus when members leave for the summer recess until September. House Democrats proposed $ 3 billion for the Heroes Act (her proposed stimulus bill that has not been approved by the Senate) and is more than double the legislation proposed by McConnell. Senate Republicans have 53 seats in the United States Senate and will need Democrats to secure a bipartisan stimulus package. If Congress does not finalize the legislation in July or August, then the new stimulus could be delayed until after Labor Day. However, if Congress completes the new stimulus before August 7, it is possible that second stimulus checks will be sent in late August.
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