WASHINGTON, DC – SEPTEMBER 24: Steven T. Mnuchin, Secretary, Department of the Treasury during the … [+]
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Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi (D-CA) met today to try to reach a compromise on the next stimulus package. For 90 minutes, they tried to come up with a compromise between the latest $2.2 trillion Heroes Act and what would pass the Senate, controlled by the GOP.
The House had originally planned to schedule a vote on the bill for Wednesday night to formalize the latest offer but decided to delay the vote.
On the surface, this may seem like a bad development. If Congress wants to pass a bill, wouldn’t the first step be to bring it to a vote in the House of Representatives?
As it turns out, this is a positive sign because all indications were that this bill would not get any consideration in the Senate. Senate Leader Mitch McConnell (R-KY) had already indicated that he opposed the bill. It would have likely met the same fate as the first Heroes Act. The first Heroes Act passed the House but never came up for a vote in the Senate.
If the House had voted for the bill tonight, it would’ve been more of a political move and signs that a compromise wasn’t possible. Vulnerable House Democrats could make the argument that they are trying to get more assistance to ordinary Americans – a powerful argument in an election year.
By delaying the vote, it gives Speaker Pelosi and Treasury Secretary Steven Mnuchin more time to figure out how to reach a compromise.
Will You Get A Stimulus Check?
It depends on whether another relief bill gets passed into law. The latest Heroes Act includes a second stimulus check that is slightly smaller than the one passed in May.
This bill offers a $1,200 per person payment (increased to $2,400 for joint filers) to those who earned less than $75,000 ($150,000 for joint filers). As has been the case with previous bills, those who earn more than the limit will see their check reduced by a 5% phase-out based on your modified adjusted gross income. It also adds $500 for each dependent and included all dependents with no limit.
This version is less generous than the first Heroes Act because it offered $1,200 per dependent with a limit of three. It is still structured as an advance on a refundable tax credit, much like in the Cares Act.
This is the least contentious parts of the bill – if a bill passes, I would expect to see a stimulus check included in the bill.
What About Unemployment Benefits?
The new Heroes Act extended the $600 per week federal unemployment benefits created by the Cares Act. It would be retroactive to September 5th, 2020, and extend to January 31st, 2020.
Unemployment has been a big issue for Republicans because of their reticence to pay people to note work, but it pales in comparison to how they feel about other larger line items in the bill.
If a compromise is reached, I would expect to see some form of enhanced federal unemployment benefits but it may be reduced to help reduce the total cost of the bill.
What’s Next?
We must wait to see what comes out of negotiations between Speaker Pelosi and Treasury Secretary Mnuchin. The House is set to leave Washington after October 2nd so it leaves very little time for an agreement but this delay on a vote is a positive sign that today’s discussions were productive.
As is the case with Washington, we must wait and see what happens next.
Additional Resources
Source: Forbes – Money
