Here are the latest numbers inside the new stimulus proposal—and what they mean for you.
Here’s what you need to know.
Senate Majority Leader Mitch McConnell (R-KY) plans to release his new stimulus package proposal as early as Monday. The New York Times has reviewed a summary of the Republican proposal. Here are the latest numbers and some proposals (although not all) from the summary, although it’s possible they could change before McConnell introduces the bill. It’s also possible that not all provisions were included in the draft summary. For comparison, key provisions of the Heroes Act, the $3 trillion stimulus bill that House Democrats passed as their version of the next stimulus, are included as well to show areas of overlap and disagreement. Importantly, the Heroes Act barely passed the House, 208-199, a 9 vote margin, and has not passed the Senate.
Top Headline Numbers
- Republicans: ~$1 trillion stimulus package expected
- Democrats: $3 trillion Heroes Act stimulus packaged passed House of Representatives (but not the Senate)
Second stimulus checks
Will there be a second stimulus check? How much is the second stimulus check?
Top Headline Numbers
- Republicans: no official number or eligibility criteria announced
- Democrats: $1,200 for each individual and $1,200 for each dependent (maximum of three dependents)
Republicans say there will be a second stimulus check. However, the summary says “the amount of the payment and eligibility criteria are [to be announced].” That said, Treasury Secretary Steven Mnuchin remarked that “our proposal is the exact same proposal as last time,” implying that the amount of the second stimulus check will be the same as the first stimulus check. If true, this would mean that there would be a one-time $1,200 stimulus check:
- a one-time stimulus check up to $1,200 for each individual;
- $2,400 for married/joint filers; and
- up to $500 for dependents under age 17.
- If you earned less than $75,000 (individuals) or $150,000 (married/joint filers), you would receive a $1,200 second stimulus check (or $2,400 stimulus check for married/joint filers).
- The first stimulus check phased out by $5 for every $100 of adjusted gross income above those income limits until $99,000 of adjusted gross income for individuals and $198,000 for married/joint filers.
Importantly, Mnuchin, who is negotiating the stimulus package on behalf of the White House, is not a member of Congress and therefore will not vote on the stimulus package. However, President Donald Trump can veto the new stimulus package, which is why Senate Republicans want to show a united front when they introduce the new stimulus. Since the Cares Act, there have been countless proposals about second stimulus checks, including keeping the same $1,200 one-time stimulus check to $2,000 a month second stimulus checks. Previously, McConnell suggested that second stimulus checks may only be available to Americans who earn up to $40,000 a year.
The Heroes Act includes a $1,200 stimulus check for individuals and $1,200 for each dependent, with a maximum of three dependents. This means that a married/joint filer with three dependent children, for example, could receive up to $6,000 in Economic Impact Payments. Unlike the Cares Act, the $2.2 trillion stimulus that included the first stimulus check, the Heroes Act has no age limit for dependents who can receive a stimulus payment.
Top Headline Numbers
- Republicans: no official number announced, but will be less than $600 a week
- Democrats: $600 a week until January 31, 2021
Absent any action from Congress, enhanced employment benefits of $600 a week end today in most states.
Senate Republicans do not support continuing the $600 a week unemployment benefits, but they now would agree to an extension. Unemployment benefits were a key reason that McConnell did not release the new stimulus package proposal last Thursday. According to their draft summary, Republicans would agree to a flat, weekly dollar amount for a transition period between the $600 a week unemployment benefits and a new, lower number. Then, Republicans want to cap weekly unemployment benefits at 100% of income (prior to unemployment), according to the draft summary, and the weekly benefit could be tied to the recipient’s state unemployment benefit. Mnuchin said that unemployment benefits could be capped at approximately 70% of income, which could imply approximately $200 a week in unemployment benefits. There have also been reports of unemployment benefits low as $100 per week, although the draft summary does not reference any specific number for revised unemployment benefits.
The Heroes Act would extend $600 a week unemployment benefits through January 31, 2021. The Heroes Act also includes additional unemployment benefits for independent contractors and gig workers, for example, through March 2021. Sen. Ron Wyden (D-OR) also has a plan to extend unemployment benefits that would base the duration and amount of unemployment benefits in a particular state based on that state’s unemployment rate.
State and local aid
Top Headline Numbers
- Republicans: $0 additional funding
- Democrats: ~$1 trillion
Republicans and Democrats differ drastically over state and local aid.
The draft summary says the stimulus package proposal would include no additional money for state or local government. However, the summary also notes that Republicans expect to “get some added in negotiations with [Democrats].”
The Heroes Act includes ~$1 trillion of state and local aid:
- $500 billion to state governments
- $375 billion to local governments
- $75 billion for Territories, Tribes and Oversight
Lost tax revenue and the financial impact of the Covid-19 pandemic has wreaked havoc on states and local governments (as well as Tribes and Territories), many of whom face significant cash shortfalls in their budget.
Top Headline Numbers
- Republicans: $0
- Democrats: $10,000 of student loan forgiveness
What’s next for your student loans?
There is no mention in the draft stimulus package summary of student loans, student loan forgiveness or extending the student loan relief from the Cares Act. Sen. Lamar Alexander (R-TN) proposed a new student loan repayment plan in which student loan borrowers with no income would make no student loan payments. Alexander also proposed that monthly student loan payments would be based on 10% of discretionary income once a borrower earns income again. It’s unclear if this is standalone legislation or will be included in the new stimulus package proposal.
The Heroes Act would extend these student loan benefits in the Cares Act (and include Perkins Loans and some FFELP loans not owned by the federal government) from September 30, 2020 until September 30, 2021:
- pause all payments for federal student loans
- set interest rates at 0%, so interest will not accrue on your federal student loans
- halt collection of federal student loan debt
- “count” non-payment of federal student loan debt toward the 120 required monthly payments for public service loan forgiveness.
The Heroes Act also includes $10,000 of student loan forgiveness for borrowers who are “struggling financially,” which is a weaker provision compared to the proposal to cancel $30,000 of student loan debt.
Top Headline Numbers
- Republicans: ~$105 billion
- Democrats: $430 billion
Republicans are focused on opening schools and would allocate ~$105 billion as follows, per the draft summary:
- K-12: $70 billion
- Higher Education: $29 billion
- Governor’s Discretion: $5 billion
The governor in each state can use the discretionary funds for K-12 or higher education. Of the $70 billion for K-12, Republicans want $10 billion for private schools. Of the $60 billion for non-private schools, $30 billion will go to the states within 15 days and then must be distributed to school districts within 15 days thereafter. Republicans want the remaining $30 billion provided “only to schools that physically reopen and is contingent upon a district reopening plan.” Republicans also would provide $15 billion for child care.
Sen. Patty Murray (D-WA) and other Democrats introduced the Coronavirus Child Care and Education Relief Act, which is a $430 billion plan that includes, but is not limited to, the following:
- K-12: $175 billion
- Child Care: $50 billion
- Governor’s discretion: $33 billion
- Vulnerable students: $12.9 billion
The Heroes Act also includes $58 billion in direct funding for school districts. House Democrats also passed the Reopen and Rebuild America’s Schools Act, which is a $130 billion legislation that includes $100 billion of K-12 infrastructure funding and $30 billion of authority to issues bonds.
What is inside the new stimulus package?
The Republicans’ draft stimulus package summary also includes extension of the Payment Protection Program (PPP), employee retention tax credits and some additional proposals, including:
- Vaccine Research: $26.3 billion
- Coronavirus Testing: $25 billion
- Defense: $21.3 billion
- Farmers: $20 billion
- Community Health Centers: $7.6 billion
- Social Distancing Work Training: $1.3 billion
If Congress reaches a deal on the stimulus proposal, Republicans and Democrats must agree on two parameters: the proposals and the numbers. Currently, at least in some areas, there is a wide divide on policy priorities and the amount of funding. The wider the chasm, the higher likelihood that a deal may not get done in July. McConnell said that a stimulus deal could “take weeks.” Based on this key stimulus timeline, the Senate is in recess after August 7. This means that if a deal is not reached before August 7, and members of Congress do not forgo their summer recess, that the stimulus package would be revisited September 8. If that happens, second stimulus checks, for example, would not be sent until September at the earliest. Similarly, enhanced unemployment benefits may be delayed as well. On the contrary, if Congress agrees to a stimulus package by August 7, it’s possible that second stimulus checks could be sent as early as August.
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