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Another round of $1,200 stimulus checks could be in the next coronavirus package

Here’s how this next round of checks would work.

From left to right, Speaker of the House Nancy Pelosi (D-CA), Senate Majority Leader Mitch McConnell (R-KY), and Senate Minority Leader Chuck Schumer (D-NY) speak after the casket with the remains of Rep. John Lewis (D-GA) is carried from the Capitol building on July 29 in Washington, DC.
Brendan Smialowski/Getty Images

Republicans and Democrats are bogged down in negotiations over what the next coronavirus relief package should look like and just how big it should be. One thing they can agree on: Everyone’s getting another round of stimulus checks.

Both the GOP’s HEALS Act, unveiled this week, and the HEROES Act passed by the Democratic House on May 15, follow the CARES Act’s lead: Most adults making less than an adjusted gross income (AGI) of $75,000 annually would be eligible to receive another $1,200 check. Payments would phase out for incomes higher than that, with individual filers earning $99,000 or more receiving no payment. This time around, the GOP plan would extend the $500 dependent payment for adult dependents, rather than just dependent minor children, a boon for families who care for disabled adults.

Similar to the Republican plan, the HEROES Act includes the same $1,200 payment and a larger payment of $1,200 for each dependent, including adult dependents — though Democrats cap it at three dependents. While some conservative senators have pushed back against a second round of direct payments, the fact that it showed up in the initial GOP bill seems like a good sign for eventual passage.

“This unprecedented expansion of federal assistance will help millions of workers, families, patients, businesses and governments survive this historic public health and economic crisis,” said Senate Finance Committee Chair Chuck Grassley in a statement.

While it took a few weeks after passage of the CARES Act for the first round of stimulus checks and direct deposits to go out (the bill was signed into law on March 27, with the first direct deposits arriving in mid-April), the second round should show up in bank accounts much more quickly.

“As soon as Congress passes another round of rebates, if you got direct deposit, it will be in your bank account within a week,” Claudia Sahm, director of macroeconomic policy at the Washington Center for Equitable Growth, told Vox.

The money will flow much more quickly this time because the US Treasury has already built an internal file detailing who should receive the money. “They pulled all the information the federal government had,” Sahm said, “and Treasury filtered it, and it went through IRS first, but they built this file. ... Once that file existed, it went to another office at Treasury that’s basically the one that pushes a button and the money goes out.”

Ultimately, a second stimulus check will be less for many American families than extending the expanded unemployment insurance payments that both parties are currently fighting over. While Republicans have proposed a $200 extra weekly unemployment insurance payment, Democrats want to extend the current $600 extra weekly payment, which would provide more long-term sustainable assistance as the country continues to grapple with the pandemic.

But the speed of the stimulus checks is its own upside: According to Sahm, the first stimulus was a success in part because it went out much more quickly than the enhanced unemployment benefits, which had to be routed through the states.

“It was good policy. I want to see it again,” she said. “I think it will be fabulous because they can even go faster than before. The sad fact is even in January, a lot of families didn’t have much of a buffer and so they need money. Congress can send money. It was really effective.”

Extending the $500 payment to all dependents would be a boon for disabled communities

While both the Democratic and Republican versions of the bill would extend dependent payments to families with adult dependents, the Democratic version caps a larger $1,200 payment at three dependents. Alternatively, the Republican plan would just give $500 for every dependent.

Inclusion of adult dependent payments came as welcome news for disability advocates who felt snubbed during the first round of stimulus.

“It was very frustrating to me and to a lot of people with disabilities when in the prior legislation, dependents were excluded from these payments at age 17,” Bethany Lilly, director of income policy at the Arc of the United States, told Vox. “A lot of folks with disabilities are still dependent on family caregivers. They are often claimed as dependents, and to simply have them excluded completely from the stimulus payment was not particularly logical to me. Now in the time of the pandemic, a lot of people with disabilities have dramatically increased costs and just dramatically altered routine.”

According to Lilly, lawmakers told her that leaving out adult dependents during the first round of stimulus was “an oversight.” The HEROES Act even goes so far as to make adult dependent payments retroactive, so families could go back to claim the dependent payment from the first round as well.

$1,200 may not be enough to stave off an economic collapse

The CARES Act was a massive piece of legislation, totaling about $2 trillion. In some ways, it was bigger than the New Deal. But it was also legislation designed to bridge a deep economic dip until the country’s economy could safely reopen. It’s a formula that worked for some other nations, but the US is still struggling to contain the virus. As Vox’s Emily Stewart explained, the US is teetering on the brink of economic disaster, “putting millions of Americans’ lives and livelihoods in danger and all but ensuring prolonged economic distress nationwide.”

The unemployment rate currently sits at 11.1 percent, according to Bureau of Labor Statistics data, up 7.6 percent from February, the last full month before the pandemic started in the US. A CNBC report from Monday reported that as many as 40 million Americans could face eviction due to the coronavirus pandemic and the resulting economic crisis.

Stephanie Kelton, professor of economics and public policy at Stony Brook University, is worried that Congress isn’t taking the risk of deeper economic pain seriously.

“It’s not remotely enough,” Kelton told Vox, referring to the second round of stimulus payments and explaining that the national median rent in the US in 2017 is $1,023. “If you’re out of a job and you’re out of income and somebody sends you a $1,200 check, that check is going to your landlord. ... It’s puzzling to me that Republicans don’t seem to understand very well how the economy works in the sense that they have this aversion to giving people money, somehow not realizing that what most of us do when we get money is turn around and give it to somebody else.”

For Kelton, any stimulus payments must be included in a larger package of other stimulus measures, including continuing the enhanced unemployment, in order to stave off economic collapse. “It’s about fiscal support. If we withdraw the support prematurely then the result is going to be that the economy continues to deteriorate,” she said. “Unemployment continues to increase, temporary job losses become permanent, job losses [lead to] a wave of foreclosures and homelessness, missed payments means potentially a financial crisis because it bleeds over into people not servicing their debt. So you need a wraparound suite of smart policies to support income.”

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