WASHINGTON, DC – AUGUST 11: US President Donald Trump speaks at a news conference in the James … [+]
Over the weekend, President Trump said House Speaker Nancy Pelosi (D-CA) urged him to “come together” and continue negotiations on the next stimulus package.
Negotiators did not meet over the weekend and, it turns out, neither were allowed on Monday or Tuesday either.
Instead of more negotiations, politicians open up the political rhetoric and accuse the other side of delays. Commenting on the Senate floor yesterday, First Chamber member Mitch McConnell (R-KY) said “This is not a Washington game. It is a national crisis. It would serve the nation better if the Democratic leaders acted if it was a crisis. . ”
The Democratic-majority House of Representatives passed the Heroes Act on May 15, about three months ago, and the Republican-majority Senate took no action until recently. Senator McConnell introduced the various parts of the Heals Act near the end of July – more than two months after the House first took steps toward the next incentive package.
The challenge in all of this is that Senator McConnell cannot point the finger at the twenty Republican senators who will not vote for additional incentives. He does not have a majority of votes to give anything away, and that is why he needs the support of Democrats within the House of Representatives to pass any incentive bill.
As a result of the logjam, President Trump used executive action to implement parts of the incentive package. These include $ 400 per week federal unemployment benefits, a tax deduction reduction, student loan relief, and a moratorium on probation.
As experts analyze the assignments and predict how they will be implemented, it becomes increasingly likely that these will have a much more limited impact than the headers imply.
For one example, the $ 400 per week unemployment benefit was structured as a $ 300 payment from the federal government and $ 100 from state governments. The federal government would withdraw funds from the Disaster Relief Fund, but experts estimate it could last only 5 weeks. States already have budget deficits due to lower tax revenues and may not even participate.
One piece of stimulus that was conspicuously absent was a second stimulus control.
Unfortunately, the president lacks the authority to issue a stimulus check and so if Americans need to get one, it must be passed into law by Congress.
What the second stimulus control might look like
The second stimulus control is one of the least controversial issues in the next stimulus package.
The Heroes Act offers a payment of $ 1,200 per person ($ 2,400 for joint filers) to those earning less than $ 75,000 ($ 150,000 for joint filers) with a 5% phase-out for those earning more as the limit. This is the same as first stimulus control.
It also increased the amount for dependents to $ 1,200 and included all dependencies, up to three per household. This is higher than what was offered in the first incentive check.
The Heals Act provides the same basic payment for economic impact as the Heroes Act – $ 1,200 per person ($ 2,400 for joint filers) to Americans earning less than $ 75,000 ($ 150,000 for joint filers) with a 5% phase- out for those who earn more than the limited.
It would only add $ 500 for each addict with no age restriction, but also no limit on the number of dependencies.
Both notes structured the payments as an advance on a refunded tax credit.
Given such similarities between the two proposals, it is very likely that the next incentive bill will include a check on these amounts. If I had to choose, I would say that an incentive check similar to that in the Cares Act, with an adjustment to the definition of a qualification dependent, is the one that is most likely to be included.
What comes next?
Treasury Secretary Steven Mnuchin and Chief of Staff Mark Meadows must meet with Senator Chuck Schumer (D-NY) and Speaker Pelosi to reach an agreement.
The total cost is the biggest sticking point, but Democrats have already moved to a total price tag of $ 2 trillion, below the estimated $ 3 trillion price tag of the Heroes Act. Last Friday, Mnuchin said even the award was a “non-starter”.
One silver lining in all of this is that if an incentive scheme is signed into law, Mnuchin said the treasury could issue the payment within a week. The first incentive check took much longer, 13 business days, and it sounds like the Treasury has improved its processes from the first check.
