Controversial stimulus check proposal ‘targets’ next payment nearly every way. What now?

On Sunday, a group of 10 Republican Senators caused a stir by presenting a vision of America’s next stimulus bill (PDF) that comes in at roughly $600 billion, 32% of President Joe Biden’s $1.9 trillion stimulus plan. Critically, it would also include a “targeted” third stimulus check that would go out to far fewer people, by changing three things, including dropping the maximum per-person amount from Biden’s proposed $1,400 to $1,000 — that’s just the start.

Biden will meet with the group on Monday evening (5pm ET) to discuss the Republican group’s $600 billion framework, but backlash against the restrained GOP counterproposal (PDF) has been swift. In a Monday press conference, Biden press secretary Jen Psaki said the president’s view is that the size and scope of the package should be “commensurate with the crises we’re facing,” and Biden called on Congress in a Monday tweet to pass his bill swiftly. Still, some of Biden’s aids have reportedly questioned the breadth of his stimulus package. And Biden himself has said he’s open to negotiating the “moving target” of the stimulus check details.

Biden’s initial plan for the next stimulus check, on the other hand, sets a $1,400 maximum payment per person and would allow millions to either qualify for the first time or get more money per household. Any change, big or small, could have an enormous impact on how many people would ultimately receive a payment. We’ll explain what the objection is to a $1,400 stimulus check, and how it could potentially become more targeted. We’ll continue to update this story with new information.

4 ways the $600 billion GOP proposal could remake the next stimulus check

Here’s the quick snapshot. Below, we’ll go over exactly why they would want to target the next check, and how each change would work on its own.

• Supply a $1,000 stimulus check maximum instead of $1,400.
• Lower the maximum qualifying income limit to $50,000 for single people and $100,000 per married couple.
• Change the stimulus check formula to reduce the number of people who would get a partial payment.
• $500 for eligible dependents of any age.

Why some people want to ‘target’ the next stimulus payment

The argument here is that a $1,400-per-person maximum would send millions of stimulus checks to people who are considered high earners — in addition to sending the full $1,400 upper limit to many tens of millions of people who fit into the sweet spot that Congress wants to supply with stimulus money. For the sake of simplicity, that’s defined as single taxpayers with an adjusted gross income of $75,000 per year or less (and their equivalent for heads of household and married couples).

The reason that a $1,400 limit could send checks to people who make “too much money” comes down to the way that stimulus checks have been calculated so far. The formula was written into the respective stimulus bills in a way that provides a partial payment to people who make more than the $75,000 per year threshold, up to a certain limit. 

Looking at the formula for the $1,200, $600 and proposed $1,400 checks, it’s immediately clear how raising or lowering the per-person maximum — e.g. $1,400 versus $600 — can change the total number of people over the $75,000 income limit who could be eligible for a payment.

For example, using our $1,400 stimulus calculator, a single taxpayer with an AGI below $75,000 would receive the full $1,400 check. At $85,000, this person could receive $1,150; at $90,000 a year, they could get $650; and if they make $102,900, the Treasury would send a stimulus check for $5.

In contrast, a $600 stimulus maximum allots a single taxpayer with an AGI of $80,000 a stimulus check for $350. The same person who makes $86,900 a year would get only a $5 check.

The result is that, with the current formula, more people are eligible overall to receive a stimulus check of some amount, even if it’s a relatively small payment. Dependents and spouses add another layer — here’s more information, including a handy comparison chart.

A $1,000 versus $1,400 check is one way to limit who gets a payment

The $600 billion GOP proposal would supply a $1,000 stimulus check instead of Biden’s $1,400. Even if no other changes were made to the formula or to the income limit, lowering the amount would automatically disqualify more people simply because of the way the math works out.

For example, the drop from the first $1,200 stimulus payment to the $600 second stimulus check immediately disqualified people who had otherwise qualified for the first stimulus check. Simply using a $600 base instead of $1,200 reduced the cutoff point for receiving a partial payment. 

Said another way, the smaller the per-person maximum, the sooner people who made more than $75,000 a year hit the limit for receiving any money.

With the first check, a single taxpayer — remember, no spouse or kids — could get some amount of stimulus money if they made under $99,000. With the second check, that vanishing point dropped to $87,000. The only difference in that part of the equation was the maximum per-person payment. (Separately, child dependents counted for $600 in the second check instead of $500.)

As another illustration of the effects of the base payment, the first stimulus check went out to around 160 million people, while the second payment reached an estimated 147 million households, despite more groups of people qualifying for the second check. Likewise, a $1,000 would reach fewer people than a $1,400 stimulus check even if that were the sole change to Biden’s proposal.

The GOP bill could cut the upper limit to $50,000 for a partial check

The GOP proposal would seek to exclude single taxpayers who make more than $50,000 per person and couples making $100,000 from receiving a stimulus check. People with an AGI under $40,000 and families earning under $80,000 would receive the full amount. 

It isn’t clear what the vision would be for heads of household, but dependents of any age would count toward $500. The idea is clearly to aim for a smaller demographic by income.

Fewer people would receive the full payment amount

The $600 billion Republican proposal would make fewer people eligible to receive the full stimulus check maximum. While the bill suggests a $1,000 per-person limit, we’re going to explain what happens if this were the only thing to change in Biden’s current proposal. 

In that case, say you have a $1,400 check, and people who make under $40,000 are the only ones who would receive the full amount. Everyone with an adjusted gross income over that amount would receive a partial payment — which would also peter out quicker for people with relatively higher incomes. That calculation would keep the highest earners from receiving a stimulus check for any quantity.

What happens if you change the stimulus check calculation?

Changing the math in the stimulus check formula used for the first two checks would be one way to limit the number of people who receive a check, and a method that the GOP pitch offers in addition to other measures. Let’s just look at this one on its own — for the sake of argument, let’s assume that the final bill would keep the $1,400 maximum instead of $1,000, and the income threshold at $75,000. 

Adjusting the part of the formula that controls partial payments could result in people who make over $75,000 per year hitting the vanishing point to get some amount of stimulus money, even with a $1,400 maximum payment, resulting in fewer checks going out overall.

For example, with the current formula, a $1,400 check would give a person with an AGI of $80,000 a year a $1,150 stimulus check. The GOP bill suggests an adjustment to the formula that would reduce your share by 10% instead of 5% for every $1,000 in income. 

Therefore, the more you earn, the less money you could receive, at a higher rate than the current formula. That would effectively mean that people who are relatively high earners would get a much smaller check or none at all.

What we know about new qualifying groups

In addition to supporting larger stimulus checks, Biden also wants to include two previously excluded groups: dependents of any age (not just children under 17) and all families with mix-status citizenship. Combined, that could potentially extend stimulus funds to nearly 20 million people who previously might not have been counted toward the family total. The $600 billion GOP proposal would allot $500 to dependents of any age.

If passed, the outcome would most likely be a larger stimulus check for families that previously qualified (in the case of 17-year-olds and older adult dependents), and some mixed-status families qualifying for a new check for the first time. In all cases, families would have to meet all other eligibility requirements — like an income limit — to receive a future stimulus check.

Until negotiations begin in earnest, we’ll have to see how the stimulus bill and third stimulus check develop. For more information, here’s the current timeline for a third stimulus check and here’s what to know about stimulus check qualifications. Here’s what to do if you’re missing all or part of your stimulus check.