$1,400 stimulus checks look likely—but the recipients might change this time
The promise to Georgia voters was simple: Deliver the Senate chamber to Democrats and they’d deliver $2,000 stimulus checks.
Georgia voters did just that. So to make good on the promise President Joe Biden’s first legislative push is for an economic aid bill including $1,400 direct payments. When added to the $600 checks signed into law by then President Donald Trump in December, it would equal a total stack of $2,000.
But this go around, the recipient list may shrink. A group of 16 senators, including Democratic Sen. Joe Manchin and Republican Sen. Susan Collins, are pushing to make the direct payments more targeted toward families in financial need, outlets including the Washington Post and Politico reported. That could mean reducing the income levels for those eligible for the checks.
President Biden has said he is open to exploring such changes. “There’s legitimate reason for people to say, ‘Do you have the lines drawn the exact right way? Should it go to anybody making over X number of dollars or Y?” Biden said at a press event on Monday. “I’m open to negotiate those things.”
Both rounds of stimulus checks last year decreased for households with 2019 adjusted gross income (or, federally taxable income) above $75,000 per individual or $150,000 per qualified couple. Those rounds also completely phased out checks for individuals earning above $99,000, and joint filers with no children at $198,000. If Congress does lower the cutoffs, it’s unclear what those new thresholds would be.
The call to potentially lower the income thresholds comes as some economists and studies suggest sending checks to affluent or well-off families won’t give the economy as much of a boost. Data from a report by nonprofit research organization Opportunity Insights suggests targeting the checks to lower and middle income families, such as those making under $75,000, would be more beneficial to the economy than giving payments to higher income households, the Washington Post reported Tuesday.
And some economists are on board with the idea: “You want to maximize your bang for your buck, so to speak,” Brett Ryan, senior U.S. economist at Deutsche Bank, tells Fortune. “You want to target those with the largest marginal propensity to consume in order to have those dollars go back into the economy and have the largest impact—You don’t want that check just to be saved.”
Ryan adds that throughout the crisis, it’s been the low income jobs that “were really hit hard.”
Regardless of what deal lawmakers agree to, it could take weeks for it to be signed into law. On Tuesday, Senate Majority Leader Chuck Schumer told reporters that as early as next week his party could move to set up the budget reconciliation process for a stimulus bill. That’s the first step for passing such a bill through the 50-50 split chamber.
More must-read finance coverage from Fortune:
BlackRock’s Larry Fink to CEOs: Get serious on net-zero targets, or else
Elon Musk says he “kinda” loves Etsy. Should you buy the stock?
When will Biden’s $1,400 stimulus check pass? Here’s everything to know
China’s society is going cashless. Now its central bank is pushing back
Revolut disrupted banking in Europe—can it do the same in the U.S.?
Why Mark Zuckerberg’s venture firm just invested millions in a Finnish food delivery startup
This story was originally featured on Fortune.com
