The House proposed a fifth stimulus bill yesterday, which includes additional spending for expanded federal unemployment benefits and a second stimulus check for qualifying individuals and their dependents. This proposal is an updated version of the HEROES Act that was released in May of this year.
The possibility of a fifth stimulus bill has been locked in a stalemate for months, and while this is the most progress we have seen in some time, it’s not certain if there will be enough support to pass this proposal through both houses of Congress and have it signed into law.
To date, the biggest roadblocks have been the total cost of the next stimulus bill.
What is Different About the Revised HEROES Act?
The new proposal cuts the total cost from the original $3.4 trillion down to a more palatable $2.2 trillion. But it still might be too rich to be passed in its present form. In general, the Republican-led Senate wants to keep the next bill in the $1 trillion range, however, there is a contingent of Republicans that want the next bill to be smaller than $1 trillion.
The revised HEROES Act cuts over $1.2 trillion from the original proposal, but it’s not certain if this will be enough to appease many Republicans.
What Does the Revised HEROES Act Include?
The new version of the HEROES Act is a scaled-down version of the previous HEROES Act. At the top-level, it includes:
- Second Round of $1,200 stimulus checks + $500 per qualifying dependent
- $600 extended federal unemployment benefits through the end of January 2021
- PPP Loan Program Expansion
- Funding for workers in the airline industry
- $436 billion for state and local governments
- $225 billion for education + $57 billion for child care
- $75 billion for coronavirus testing, tracing, and treatment
- Funding for USPS and election security
Line Items That Could Directly Impact Your Wallet
Most individual taxpayers may only see a direct impact from a few items on the above list, namely a second stimulus check and expanded unemployment benefits. Some others may see benefits from expanded PPP lending if you are a small business owner or your job is impacted, or if you work in an impacted industry, such as the airline industry.
How Does The Second Stimulus Check Work?
The second stimulus check would be slightly different than the stimulus check found in the original version of the HEROES Act.
Individuals would qualify for a stimulus check of $1,200 ($2,400 for married filing jointly) if they had an Adjusted Gross Income (AGI) of $75,000 or less ($150,000 for married filing jointly). Like the CARES Act, there is a 5% phase-out for income above these limits.
There is an additional $500 payment for each qualifying dependent. There are no limits to the number of dependents and there are no age limits for dependents, unlike the CARES Act, that limited payments for dependents ages 16 and under.
Like the CARES Act, the second stimulus check would be classified as an advance on a refundable tax credit.
Expanded Unemployment Benefits
The $600 weekly federal unemployment benefits would resume under this program and would be extended through the end of January 2021.
What is the Timeline for this Proposal?
The House is expected to vote on this proposal as soon as tomorrow. However, even if it passes the House, this proposal faces a long road before it can become law. It would still need to be voted on by the Senate, where it will face opposition on the overall cost, as well as where some of the funds are earmarked. For example, many Republicans are opposed to providing a significant amount of funds for state and local governments.
There is still a roughly $1 trillion gap in the amount of money each party wants to spend, and there is little time left to negotiate. Both the House and the Senate are scheduled to begin their recesses soon and the focus will quickly shift to the upcoming general election.
While this proposal is the best bet we’ve had in months for a fifth stimulus bill, it’s not a sure thing. In other words, don’t spend that second stimulus check just yet. There may not be one soon.
- Second Stimulus Check Bill Update – What’s The Holdup?
- Next Stimulus Bill Needs To Address These 3 Issues