Is a second stimulus check in the works? The update on another round of $1,200 payments

Will there be a second stimulus check to offset financial loss caused by the coronavirus outbreak and if so, how much can you expect to get? That’s the question at the center of a shifting situation with no clear immediate answers. Leaders from the White House, Senate and House of Representatives are now weighing the details of a second round of economic stimulus payments by the end of 2020.

One possible direction is the Heroes Act passed by the Democrat-led House of Representatives on May 15. This is a proposal for more stimulus money, not a package that’s become law, and it’s now before the Senate. Then there’s an unnamed financial rescue proposal that the White House may start work on as soon as this week, according to The Wall Street Journal. 

That’s assuming the Senate goes ahead with a second stimulus bill at all, a decision Senate Majority Leader Mitch McConnell has suggested could be made in the coming weeks, CNBC reported. If Congress does approve another coronavirus stimulus check, McConnell said, it will be the “final” one. It’s hard to know if the protests sweeping the US in response to the death of George Floyd and others will affect the government’s agenda.

So what happens now? We’ll outline the common arguments for and against a second stimulus bill, what the Heroes Act proposes and what you can expect to happen in the coming weeks. This story updates frequently with new information and is intended to provide an overview of the situation. If you’re waiting for your money, you can track the status of your stimulus check with the IRS, see some possible reasons why you don’t have a check yet, and what to do if your check never arrives.

What does White House say about the stimulus proposal?

According to The Wall Street Journal, President Donald Trump and his economic advisers want to focus the next stimulus package on boosting the US economy with incentives for workers to find jobs, eat at restaurants and even take vacations, for example.

The White House is considering reducing unemployment payments to $250 to $300 a week during the second half of the year, the Journal reports, which Republicans believe will be an incentive to return to work. Currently, payments are $600 a week, as part of the CARES Act passed in March. The enhanced benefits expire July 31.

The White House is also looking at tax breaks for those who take a vacation in the US (PDF) this year to encourage spending, the Journal reported. Japan is taking a similar approach to encourage people to travel.

The White House has held back on pushing for a second stimulus package until now. Presidential aides predict the terms of the next package won’t be completed until July, according to the Journal. And while the final dollar figure hasn’t been set, Republicans said it could reach as high as $1 trillion. For comparison, the CARES Act is a $2 trillion package and the proposed Heroes Act, itself a bid to become the next rescue package, is worth $3 trillion — 50% more than the first relief act.

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A second stimulus check and the economy

The first stimulus checks for up to $1,200 apiece were initially intended as a one-time payment to help the people and businesses affected by the coronavirus outbreak. That includes people who couldn’t work because they got sick, received limited work hours or lost their jobs when businesses closed as a measure to slow the spread of COVID-19. 

Now, with surging unemployment and a potential global recession ahead, some wonder if the first check did enough for individuals, families, businesses and those who are out of work and are looking at how best to distribute additional aid.

On June 4, the Labor Department reported 1.9 million Americans filed new unemployment insurance claims for the last week of May, with 21.5 million receiving unemployment benefits by the week of May 23.

During a recent Senate hearing, the Chair of the Federal Reserve Jerome Powell called for additional economic relief. In May, the International Monetary Fund forecast a deep global recession that could become the worst since the Great Depression.

Is the Senate likely to pass the Heroes Act?

A second stimulus payment isn’t a done deal. Senate leader McConnell indicated that his arm of Congress has yet to decide if there will even be another package. If there is, he’s suggested that it will be smaller than the previous CARES Act and not larger, as the Heroes Act proposes. 

“It will be narrowly crafted, designed to help us where we are a month from now, not where we were three months ago,” McConnell said last week, CNBC reported. 

In May, McConnell said that the bill proposed by the House wouldn’t pass as is, according to NBC News, but he is open to a second package, said CNBC.

Possible outcomes include the Heroes Act morphing into a different aid package through bipartisan negotiation. It could also fail, with a new proposal taking its place. Or, it could dissipate altogether until a future proposal appears and the process begins anew. 

It’s also possible that the Senate or president could quash a second rescue package, although the White House has indicated it would support a second stimulus check of some sort, according to CNBC, though Trump called the Heroes Act “DOA”. Read on for what the Heroes Act proposes and arguments for and against the bill.

Is the IRS done sending the first wave of stimulus checks?

The IRS has distributed the majority of the relief checks, with the last several million to go. If you didn’t get your money yet, here are 10 possible reasons for a delay. If you’re worried you were supposed to receive your check and didn’t, here’s what you can do.

Heroes Act proposal: Who could get a $1,200 check?

If signed into law, the Heroes Act could include a wide range of benefits, such as a second direct payment to individuals and households of up to $1,200 per family member, according to a fact sheet from the House Appropriations Committee (PDF). Because it’s still a proposal, the details of the stimulus package are undecided, but here are outlines of the bill as it stands today.

Individuals: Under the proposed law, an eligible person would receive $1,200 if their adjusted gross income, or AGI, from their 2019 federal tax filing or 2018 filing (if you haven’t filed taxes yet) was less than $75,000. As with the current stimulus package, payments would incrementally decrease as your AGI goes up. A chart from the Congressional Research Service shows proposed payments by income (PDF).

Children and dependents: Each dependent would qualify for a $1,200 payment. That includes college students, children over 17, disabled relatives and a taxpayer’s parent. This detail differs from the previous CARES Act, which provided a $500 payment just for children age 16 and under. Under the bill (PDF), dependents would receive retroactive payments to compensate for being passed over in the first stimulus package.

Families: Households would qualify for a maximum payment of $6,000 total, capped at five family members at $1,200 apiece. Your scale of your payment allowance would begin to decrease as you surpass an AGI of $150,000 for married couples filing jointly, or $112,500 for heads of household.

Noncitizens: To qualify for a payment under the current CARES Act, US residents are required to have a Social Security number. With the Heroes Act, those without a Social Security number could instead use an individual taxpayer identification number, which will allow noncitizens to qualify for a payment. As with the stipulation for dependents, people who qualify in this category would receive retroactive payments from the first stimulus package. 

What other benefits does the Heroes Act propose?

The Heroes Act, officially the Health and Economic Recovery Omnibus Emergency Solutions Act, includes a handful of additional measures to provide support for individuals and businesses.

Unemployment benefits: The bill would carry over the current enhanced unemployment benefit of $600 per week (on top of states’ typical unemployment payout) to January 2021.

Payroll protection: The Heroes Act would expand the employee retention tax credit to help employers keep workers on the payroll.

Funds for essential workers: Under the bill, state and local governments would receive $1 trillion to pay salaries for first responders, health care workers, teachers and other essential workers in danger of losing their jobs. The bill would also fund hazard pay for workers with high-risk jobs.

Coronavirus testing, tracing and treatment: The bill would include $75 billion to provide for expanded testing and contact tracing.

Support for businesses: The bill would bolster the Payroll Protection Plan, which provides payroll assistance to small businesses, and provide additional funding for the US Postal Service.

Arguments for and against a second stimulus bill 

With the bill moving from the House of Representatives to the Senate for debate, here are some of the arguments on both sides of the discussion.

What proponents of the Heroes Act say: Since the middle of March, more than 38 million US workers who have lost their jobs have filed for unemployment. The actual number of those unemployed could be millions higher, according to the Economic Policy Institute, because many people who are eligible were unable to file a jobless claim. With the job losses, the nation’s unemployment rate reached 17.2% (PDF), according to the US Department of Labor. Newly unemployed people, along with others taking an economic hit from the pandemic, would benefit from having more money to spend right now. 

What opponents of the Heroes Act say: Some in Washington, including McConnell, question whether the preceding relief measures have met their goals and want to focus on short-term economic measures. McConnell and others have also expressed concern about how additional stimulus packages will increase the historic federal deficit. Because that payment is available in addition to regular jobless benefits and enhanced unemployment benefits of $600 per week, some critics worry it will make it harder to reduce unemployment if people don’t have an incentive to return to work. 

What will it take for a second stimulus check to happen?

It’s clear that a second stimulus check won’t happen immediately. If the Senate won’t make a decision for a month, it could take weeks after any legislation happens for a check to come your way.

It’s widely believed that Republicans will reject the Heroes Act in whole or in part, and earlier reports indicated that the Senate might work with The White House on their own stimulus package. McConnell has said more aid may be necessary, but it may take a different form than the House bill being proposed — and one worth less than a third of the proposal. Congress is also working to make it easier to forgive small business loans that are part of the CARES Act that passed in March.

In order to receive a second stimulus check, any new coronavirus rescue package that passes both the House and the Senate would still need a signature from President Trump before it could take effect. After that, the IRS now has a system in place to organize and distribute those checks.

We’ll continue to update this story with new information as it arises. While the future of a second stimulus bill remains undecided, we’d like to share available resources about unemployment insurance, what you can do if you’ve lost your job, what to know about evictions and late car payments, and how to take control of your budget.