By Michelle Jones. Originally published at ValueWalk.
We should start hearing more and more about the status of a second stimulus check for the general public. Unfortunately, Congress is even more split than ever. Not only are Republicans sparring with Democrats, but they’re also doing battle with their own party members as the GOP is split over what should be in the next coronavirus stimulus package.
Division over payroll tax cuts
President Donald Trump has taken a hard line on a payroll tax cut for the phase four stimulus package. He told Fox News Sunday that he might even consider not signing the bill if it doesn’t include the provision. However, he may lack sufficient support from Republican lawmakers as few seem interested in a payroll tax cut.
According to CNN, Senate Finance Committee Chairman Chuck Grassley said a payroll tax cut is a “public relations problem” and that it wouldn’t have much of an economic impact. Another Republican, Sen. John Cornyn, said it “divides our conference because the Social Security and Medicare trust funds are not exactly on solid ground.”
Senate Majority Leader Mitch McConnell wouldn’t say anything about a payroll tax cut or whether Republicans would accept it when he left the Senate floor on Monday. Senate Majority Whip John Thune said many Republicans don’t like the idea of a payroll tax cut for many different reasons.
Democrats also oppose a payroll tax cut, so it sounds like this is one provision that won’t be included. If Trump wants to have a chance to be reelected, he will sign the bill even if it doesn’t include a payroll tax cut.
Second stimulus check status: arguments in favor
One reason Thune said some don’t like the idea is because they don’t believe a payroll tax cut changes behavior. For example, he said there’s a difference between a $60 increase in their paycheck in the fourth quarter when people already have “all kinds of holiday stuff going on,” and getting a check in the mail that people “actually like.”
His remark was good news for those wondering about the status of a second stimulus check. He believes another coronavirus stimulus check makes “a lot more sense” when it comes to getting “something out of it for the economy.”
Experts also offered updates on the status of a second stimulus check. Urban-Brookings Tax Policy Center Director Mark Mazur told CNBC that he believes a second round of checks could make the final cut for the next stimulus package.
He said both Senate Republicans and House Democrats seem to want to do it, which is good news for the status of a second stimulus check. However, he also said the amount of those checks may not be determined until the last minute in negotiations.
McConnell suggested a $40,000 income cap in order to receive a second stimulus check, although it’s unclear if that will be the actual cap. That would greatly reduce the number of Americans who qualify to receive a second check and help Republicans keep the package around the $1 trillion ballpark they want it to cost.
Beyond the status of a second stimulus check
In addition to a payroll tax cut and a second coronavirus stimulus check, lawmakers will be negotiating for several other provisions. Several Republican lawmakers told reporters on Monday that the next stimulus bill must include more money for coronavirus testing and contact tracing.
The White House has said that the Centers for Disease Control and Prevention shouldn’t get more money for testing and contact tracing. This indicates another battle line drawn within the Republican party. White House Chief of Staff Mark Meadows and Treasury Secretary Steven Mnuchin met with Republican senators on Monday at the Capitol to talk about their differences in funding for testing. They’re set to meet again today to resume their talks.
Mnuchin also said schools have been a “very big component” of their negotiations. He said there’s “a lot of money” to provide assistance to schools. Meadows told reporters that Monday’s meeting was “extremely productive” and that they are “optimistic we’ll be able to find enough funding to meet the needs across the board.”
Other provisions are also up for debate to be included in the next stimulus package. Trump also strongly backed liability protections for businesses, medical facilities and schools as they reopen amid the pandemic. Republicans also support the idea, but Democrats oppose it.
Unemployment benefits in the next stimulus package
One other key sticking point will be unemployment benefits. The extra $600 in weekly unemployment benefits comes to an end at the end of the month. In fact, most of the measures that were enacted in the March CARES Act will be ending soon, even as COVID-19 shows no sign of stopping anytime soon.
According to CNBC, more than 25 million Americans have been receiving the extra $600 in weekly unemployment benefits. Democrats want to extend it past the end of the month, but Republicans are concerned about the fact that many people are getting paid more while unemployed than they were getting paid on the job.
There is a chance that Republicans will decrease the amount of extra weekly unemployment benefits received in the next stimulus package. If Democrats want to get the bill passed, they will hopefully agree to a reduced amount just to get the bill moving. The problem will be if Republicans want to reduce the amount so much that Democrats won’t agree to it.
The Congressional Budget Office expects unemployment to remain high through 2021. The unemployment rate is still over 11%, and some areas have been hit harder than others. If lawmakers don’t get something passed by July 31 when the House of Representatives leaves for its August recess, millions of jobless Americans will struggle even more.
It’s unclear whether lawmakers on both sides of the aisle will be able to come together to get something passed, especially given the divisions in the GOP.
The post Second stimulus check status: why it may make the cut appeared first on ValueWalk.
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