(CBS Detroit) — A third stimulus check is now one step closer to reality. The Senate recently passed a $1,400 relief payment, as part of President Biden’s $1.9 trillion economic relief package. The American Rescue Plan aims to counter the economic fallout from COVID and stabilize the economy. It has broad support among Democratic and Republican voters, though no Republican Senators voted in favor of it. The modified package, which returns to the House for another vote, also contains extended unemployment benefits, an improved child tax credit, and much more. While a third check seems destined for bank accounts, the specific timeline is still coming into focus.
When Could My Stimulus Check Arrive?
The administration is still set on signing the American Rescue Plan into law by March 14. That is the day when the current $300 federal unemployment benefit bonus expires. Assuming President Biden signs the relief package this coming weekend, direct deposits would likely start the week of March 22, with checks beginning to arrive the week of March 29.READ MORE: Third Stimulus Check: Why Your Next Relief Payment May Not Be $1,400
The March 14 target date could very well move up, however. The Senate passed an altered version of the American Rescue Plan this past Saturday by a narrow 50-49 majority. The body’s official parliamentarian recently ruled that a minimum wage hike isn’t related to the budget and therefore can’t be passed using reconciliation, the process that allows bills to proceed with a simple majority. The measure was stripped out of the Senate version. Additional federal unemployment benefits were kept at the current $300-per-week rate — rather than increasing to $400 — and extended through Labor Day. Some of the money allocated for states and localities was set aside for capital projects. Because of the amendments, the bill now returns to the House for another vote. That could take place as soon as Tuesday, giving Biden a chance to sign the stimulus package before the weekend.
If the bill leaves Congress this Tuesday, the President could sign it as soon as Wednesday. Direct deposits would start arriving in bank accounts by March 17, and checks would start being mailed on March 24. With the second stimulus check, direct deposits were initiated within two business days and paper checks began hitting the mail within three business days. So a similar timeline could play out this time too. There’s an outside chance that people start receiving money by the weekend.
What Could Delay My Stimulus Check?
The House could have its own issues with the Senate’s amendments, leading to a longer timeline. How progressives in the House react to changes from the Senate is one concern. A higher minimum wage, which the Senate removed from the bill, has long been a priority of the Democratic party’s progressive wing. Congresswoman Alexandria Ocasio-Cortez from New York has suggested that the far-left members of the House pressure the party like centrist members in the Senate have. Would they withdraw support, or otherwise delay the process? That remains to be seen.
Senate Democrats also changed other aspects of the stimulus package, such as the amount of extended unemployment benefits and how the money allocated for states and localities could be spent. Concern about who receives stimulus checks led to an agreement between the President and centrist Democrats to phase out stimulus payments more quickly. That also may not sit well with progressives, who previously opposed cutting the income cap on checks.
A recent statement from the Congressional Progressive Caucus seems to quell any concerns. “The American Rescue Plan is a truly progressive and bold package that delivers on its promise to put money directly in people’s pockets and decisively crush the coronavirus’s spread, which is responsible for our economic crisis. Compared to the response to the Great Recession, this package meets the scale of this unprecedented crisis, delivering the equivalent of seven percent of GDP for the coming year – exactly what economists say is needed to jumpstart our economy and the labor market.”
As the statement continues, “…despite the fact that we believe any weakening of the House provisions were bad policy and bad politics, the reality is that the final amendments were relatively minor concessions.”
Distributing the third stimulus check could also create delays. The Internal Revenue Service (IRS), the agency charged with sending out payments, is right in the middle of tax season. While CARES Act checks went out around the same time last year, the tax deadline was pushed from April 15 to July 15. (No extension has been announced this year.) The second stimulus check was distributed before the 2020 tax season began. This time, though, the IRS will have to handle the dual burden of sending out millions of relief payments while accepting and processing millions of tax returns.
What Could Reduce My Stimulus Check?
The topline $1,400 number that’s drawn so much attention seems destined to become a reality. But the actual amount that people receive could change based on income restrictions, the number of dependents and other factors.
The previous two stimulus checks phased out for individuals with an adjusted gross income (AGI) over $75,000 per year and married couples with an AGI over $150,000. (AGI is the total of one’s wages, interest, dividends, alimony, retirement distributions and other sources of income minus certain deductions, such as student loan interest, alimony payments and retirement contributions.) For every dollar of income over the threshold, the previous two stimulus payments decreased by five percent. So the $1,200 payment from the CARES Act shrank to $0 for incomes over $99,000 ($198,000), and the $600 from the second stimulus shrank to $0 for incomes over $87,000 ($174,000).
The idea of changing the annual income requirement had gathered some steam. In early February, Democratic Senator Joe Manchin of West Virginia and Republican Senator Susan Collins of Maine proposed an amendment aimed at “targeting economic impact payments to Americans who are suffering from the effects of COVID–19, including provisions to ensure upper-income taxpayers are not eligible.”READ MORE: Third Stimulus Check: How Could The Economic Relief Package Put More Money In Your Pocket?
To that end, the Biden administration agreed to phasing out checks more quickly. So while the threshold remains at $75,000 ($150,000) in the Senate version of the bill, those earning $80,000 ($160,000) or more will receive nothing. If the phase out progresses at a constant rate — in this case, 32 percent — that would mean people would receive $.32 less for every $1 they earned over the limit.
Biden agrees to phase out checks faster, per Dem source: pic.twitter.com/00WTBgcSPJ
— Erica Werner (@ericawerner) March 3, 2021
The idea behind targeting stimulus checks to reach lower-income people is to better ensure that the money gets spent in the broader economy rather than saved. According to a survey from the Federal Reserve Bank of New York, the average percentage of the first stimulus payment that a household spent on essentials decreased as income increased. The average percentage of the first stimulus payment that a household saved increased as income increased.
While speeding up the phase out would better target the economy, it would also reduce the number of people receiving a third stimulus check and the amount received by others. Upwards of 30 million CARES ACT payments were received by households with incomes above $75,000. Most of those would not receive a check if a faster phase out were implemented. Those earning between $75,000 and $80,000 would not receive the full $1,400.
Why Do We Need Stimulus Checks?
The economy shrank by 3.5 percent in 2020, the largest single-year decline since the end of World War II. Weekly unemployment figures remain historically high, with approximately 745,000 people initially applying for unemployment insurance in the last week of February. (For reference, a typical pre-pandemic week saw about 200,000 new unemployment applications.) An additional 437,000 sought Pandemic Unemployment Assistance.
Approximately 18 million people were receiving unemployment benefits of one kind or another as of mid-February. That’s about one out of every nine workers. While the official unemployment rate is 6.2 percent, the actual rate is probably closer to 10 percent, given all the people who have dropped out of the labor force. On the bright side, employers added another 379,000 jobs last month.
An economic bounceback depends on the widespread distribution of a COVID vaccine. And efforts to inoculate the public are starting to improve. Shortages and winter weather forced some areas to temporarily close vaccination centers and scale back administering the vaccine in recent weeks. Many who qualify have faced problems in scheduling appointments. Nevertheless, Americans have received over 90 million doses, with 17.7 percent of the population having received at least one dose and 9.2 percent having received two doses. Vaccination numbers continue to increase at a rate of about 2.2 million doses per day.
The Food & Drug Administration just authorized Johnson & Johnson’s one-shot vaccine. Four million doses shipped on last week. Biden has recently stated that the country will have enough doses to vaccinate all Americans by the end of May. Actually putting needles in arms will likely take longer. Mask-wearing and a general lack of normalcy could continue into 2022. Currently, domestic COVID cases have surpassed 29 million, while deaths have climbed past 525,000.MORE NEWS: Stimulus Check Latest: Parents Could Receive Monthly Payments With Expanded Child Tax Credit
Originally published February 4 @ 6:06 p.m. ET.