Democrats are pushing a revised coronavirus relief plan that would limit $1,400 direct payments to individuals earning $50,000 or less and couples earning $100,000 or less, The Washington Post reports.
The plan, which could still change, would reduce the income cap to receive the stimulus checks from $75,000 to $50,000, though heads of households earning up to $75,000 would still qualify.
The payments are based on adjusted gross income, though those figures are from before the pandemic began, meaning many people who lost their jobs may not qualify.
One estimate found that about 71% of Americans would get the full $1,400 while 17% who earn more than $50,000 would get a partial payment.
Biden’s initial proposal would have provided full payments to 85% of Americans.
Is this a good idea?
Economists are split over whether the checks should be more targeted to lower-income Americans.
A recent New York Federal Reserve study found that 36% of recipients saved their first round of stimulus checks while 35% used it to pay off debt and only 18% spent it on essentials like food or rent.
A University of Pennsylvania model predicted that 73% of the proposed $1,400 checks “will go directly into household savings and produce limited stimulus effects.”
The latest revision is very similar to a GOP proposal that called for far less aid.
Senate Finance Chairman Ron Wyden called for the income thresholds to remain at $75,000.
Biden open to slashing checks:
Biden privately told Democrats that he was “open to negotiating some aspects of the package in the hope that Republicans could be persuaded to back it,” according to The New York Times.
“We need to act fast,” he said. “It’s about who the hell we are as a country.”
But it’s highly unlikely that any Republicans would back the plan. Ten Senate Republicans considered among the most likely to work the administration called for a plan that would provide about $618 billion in relief, a far cry from the $1.9 trillion Biden has proposed.
“There’s a real sense that there’s real consequences of going small, there’s real consequences of allowing stalling” to court Republican votes, Wyden said. “What Republicans really haven’t gotten their arms around is that what we’re proposing here has strong support from the American people.”