Update on the Second Round of Stimulus Checks

    There are signs that another round coronavirus relief – and the $1,200 second stimulus check that’s the featured centerpiece in it – may not happen after all.

    Democratic leaders Nancy Pelosi (D-Calif.) and Chuck Schumer (D-N.Y.) have not spoken with Treasury Secretary Steven Mnuchin or White House Chief of Staff Mark Meadows in five days about how much help the federal government will provide an ailing American economy.

    Worse news than that: there are no plans resume talks. That means no discussion on the four major points of interest that include:

    • When to expect the much-anticipated $1,200 direct payment to Americans making less than $75,000.
    • Definitive action on extending a moratorium on evictions for renters and homeowners affected by the failing economy.
    • Resolution of the dispute over the $600 supplemental unemployment insurance check that expired two weeks ago.
    • A reasonable debate over how much aid to offer cities and states who have seen revenue from taxes take a huge dive the last six months.

    The first two items are the major points of agreement between the $3.4 trillion HEROES Act passed by the Democratic-controlled House of Representatives on May 15 and the $1 trillion HEALS Act that hasn’t received a vote in the Republican-controlled Senate.

    The last two points – continuing the $600 bonus check for 30 million unemployed Americans and giving $1 trillion of relief to cities and states – are major obstacles to reaching a compromise.

    Instead of working on resolving differences, Schumer and Senate Majority Leader Mitch McConnell traded insults on the Senate floor Tuesday in a continuing effort to make the opposition look like the unreasonable side in the attempt to reach a compromise.

    “Democrats are willing to compromise,” Schumer claimed, citing a pledge to knock $1 trillion off the requested total for the HEROES Act. “But Republicans are being intransigent and will not move from their position, which is totally inadequate for the needs of America at the greatest economic crisis we have had in 75 years and the greatest health crisis in 100 (years).”

    McConnell, who set the $1 trillion parameters for the HEALS Act, but has removed himself from negotiations on a compromise, fired back with this:  “The American people are sick of this stalemate. We’re waiting for the Democrats to indicate some interest in getting an outcome. There are life and death matters at stake, but Democrats have treated this historic national crisis as a political game.”

    Trump’s Executive Orders for the Stimulus Package

    In the meantime, President Donald Trump’s executive orders have gone nowhere as state governors and his own staff try to interpret exactly what can be implemented through executive action.

    For example, Trump’s claim that he would restart the federal bonus for the unemployed, giving qualified workers $400 a week, turned out to be a non-starter. The original plan required states to agree to put up $100 of the $400 promised. When several states balked because their budgets were already shredded by the COVID-19 crisis, Trump’s aides reinterpreted the order to say that workers get $300.

    That is half of what they received from mid-March until the program expired July 31. Even if the federal government followed through with the promise of $300-a-week supplement, the funding would run out after just six weeks.

    When Will They Vote on the Second Stimulus Check?

    If you’re guessing – and that’s all that can happen given the state of non-negotiations at the moment – best guess is that a vote on the second stimulus check won’t happen until sometime in September.

    A vote this week is out of the question, unless there an unexpected emergency meeting between the top negotiators for both sides and the huge gap separating the two somehow disappears. If nothing happens this week, it could be time for McConnell to send the Senate home and wait until both Houses of Congress return from vacation Sept. 8.

    Complicating matters even more is the fact that Senate Republicans shelved discussions on the federal budget. When the House and Senate return, the deadline for passing a budget is Oct. 1, leaving little time to deal with that and the coronavirus relief bill.

    Then again, if a miracle happens and a vote needs to be taken at any time this month, vacationing members of the House and soon-to-be-vacationing Senators can always get back to Washington, cast their ballot and go back home. From what we hear, there’s plenty of airline seats available.

    If nothing happens and no bill gets through the Senate, well, both sides will have a lot to talk to constituents about when they go home for vacation.

    How Much Is the Second Stimulus Check?

    Generally, it will mirror the first stimulus check, which was $1,200 for single filers and $2,400 for married couples. That is based on incomes of $75,000 (or less) for individuals and $150,000 (or less) for married couples. There is also a $500 payment for each dependent (up to three). Under the CARES Act, eligible dependents had to be age 17 or younger. Under the HEALS Act, there is no age requirement for dependents.

    Who Qualifies for the Second Stimulus Check?

    Based on income from 2019 or 2018 tax filings, the second stimulus checks will go to single filers with an adjusted gross income of less than $99,000 and joint filers with an AGI or less than $198,000.

    For single filers making between $75,000 and $99,000, they will be paid less than $1,200, using a sliding scale that adjusts proportionally with anyone making over $99,000 getting $0.

    Expect some errors. In the first round of stimulus checks, the U.S. Government Accountability Office (GAO) said nearly 1.1-million payments totaling nearly $1.4-billion were sent to people who had died.

    According to the GAO, the IRS and Treasury Department “faced difficulties delivering payments to some individuals, and faced additional risks related to making improper payments to ineligible individuals, such as decedents, and fraud.’’ The IRS has been studying cost-efficient ways to notify ineligible recipients how to return payments.

    The HEALS Act includes language that prohibits stimulus check payments to people who died before Jan. 1, 2020 or people who are incarcerated.

    When Will I Receive the Second Stimulus Check?

    It’s best not to make it part of your September budget, at least not for now. And if talks between the two sides don’t get a little warmer in August, you may not be receiving a second stimulus check at all.

    The fastest you could hope to receive the $1,200 direct payment would be sometime in September. For that to happen, a bill authorizing the second stimulus check to pass both the House and Senate and be signed by the President sometime in the next 10 days.

    For context, it took three weeks after the CARES Act was signed for the first stimulus check to be direct deposited in someone’s account. Let’s say the IRS has learned a lot from that experience and they knock it down to two weeks (wishful thinking), it still would be a rush to say the money will reach your account by Labor Day (Sept. 7).

    There is no evidence that either side is ready to budge from its position and make that happen. The negotiating teams of Pelosi/Schumer and Mnuchin/Meadows met or spoke with each other for 10 straight days and couldn’t come close to an agreement. Seeing that suddenly change would be shocking.

    Yes, the Democrats did say they’ll come back from the $3.4 trillion HEROES Act to somewhere around $2.4 trillion, but that’s still miles from where many Republicans are. The deeply-divided Republican Senate includes 20 senators who don’t want to spend even the $1 trillion figure McConnell set out for the HEALS Act. Getting them up to $2 trillion, or even close to that, seems impossible.

    And the president, who calls himself the Great Dealmaker, is a non-factor in the negotiations so far and doesn’t appear to have enough clout to make anything happen himself. He threw the hastily-prepared executive orders together and presented them to the public over the weekend, but left the explanations and details of how they would work to aides. So far, the aides are still trying to figure it out themselves.

    So, if meetings are not resumed this week, there is a good chance everyone throws up their hands and says “I’m done with this!” And means it.

    That pushes things back to at least mid-September to allow time for more pontificating and wrangling and disagreeing. The only real deadline for action is the Nov. 3 election, when voters will have a decision in their hands to decide which side to support.

    Do Democrats and Republicans up for re-election want voters deciding their future over disagreements on a spending bill?

    They probably don’t, but if nothing happens between now and then, Nov. 3 might be the day there is a final decision on whether you’re getting a $1,200 second stimulus check.

    How Will the Second Stimulus Check Be Delivered?

    If your bank account information is already on file with the IRS, it should be a seamless process. You will get a direct deposit expeditiously. Or the check will be in the mail within two weeks of the first payments going out.

    It will take longer if you aren’t registered with the IRS. If you’re not at the front of the line, your payment might be sandwiched with other IRS materials, such as tax returns.

    The IRS also offers a “Get My Payment’’ locator tool from the U.S. Postal Service. It will send you an image of the letter once it has been processed. You can follow it all the way to your mailbox.

    Will There Be a Third Stimulus Check?

    A third stimulus check is considered unlikely. Last week, McConnell said this will be the “final’’ coronavirus relief package. “There definitely won’t be another one,’’ he said. Still, expect President Trump to recognize the political benefit of pushing for another round of stimulus before the November election. But it will be a hard sell to gain support for that, especially from members of his own party.


    Bill Fay
    Staff Writer

    Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at bfay@debt.org.

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