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Second stimulus check: Will you get $2,000, $600 — or nothing?

Stimulus check
Posted at 2:17 PM, Dec 23, 2020
and last updated 2020-12-23 16:17:13-05

A second round of stimulus checks had been expected to land in the bank accounts of millions of Americans as soon as next week, thanks to the $900 billion economic relief package that Congress passed Monday night.

But President Donald Trump's sudden insistence Tuesday that lawmakers boost the bill's $600 stimulus checks to $2,000 per person is now throwing the timing and amount of the checks into question.

The upheaval comes after Congress added $600 per-person checks into the bill during last-minute negotiations, an amount that had been decried as too low by some lawmakers, such as Senators Bernie Sanders of Vermont, an independent, and Josh Hawley of Missouri, a Republican.

Mr. Trump seemed to agree with the critics, saying in a video posted to Twitter on December 22 that he would not sign the economic relief package, calling the stimulus checks "ridiculously low."

"I am asking Congress to amend this bill and increase the ridiculously low $600 dollars to $2,000, or $4,000 for a couple," Mr. Trump said in the recorded message.

The $600 checks directed by the relief bill would represent half of the $1,200 directed toward most adults in the first round of stimulus checks. Critics had said the aid would be helpful, but not enough to tide over families who have suffered income or job losses since the coronavirus pandemic shuttered the economy in March and caused unemployment to spike.

Almost 6 in 10 consumers say they have suffered a financial hit due to the pandemic as of the end of November, according to a recent study from TransUnion, which also found that 40% of those households had been banking on the prospect of another stimulus check to help them pay their bills.

Mr. Trump's pushback is raising new questions for millions of Americans who are awaiting the next round of checks.

How likely are $2,000 checks?

Democrats are backing Mr. Trump's request for $2,000 checks — but it's not clear how many Republicans will join in because the proposal for bigger payouts would cost an estimated $530 billion, or about $385 billion more than what Congress approved with the $600 checks, according to Heights Securities.

House Democrats said they plan to offer a bill for $2,000 stimulus checks this Thursday, and will attempt to pass it via unanimous consent since no one will be on the floor to vote. House Speaker Nancy Pelosi on Tuesday night tweeted in support of the $2,000 checks, writing, "Let's do it!"

She added that Republicans had "repeatedly refused to say what amount the President wanted for direct checks" during the lengthy negotiations.

Wall Street analysts say they believe it's most likely that the current bill — with $600 checks, approved by big bipartisan majorities in both houses of Congress — will move forward, however.

"Our base case remains that the bill passed by Congress will become law," Raymond James analyst Ed Mills said in a December 22 research note.

What about timing of the checks?

With Mr. Trump's pushback, it seems increasingly unlikely that the stimulus checks would start reaching people's bank accounts as early as next week, as Treasury Secretary Steven Mnuchin had predicted on December 21.

Another round of negotiations could delay the bill by several days, while a veto from Mr. Trump could delay passage of a bill by weeks.

There are a few ways this could play out, according to Wall Street analysts. Congress could agree to the $2,000 checks by early next week, paving the way for Mr. Trump to sign the bill, but it's unclear whether Republican lawmakers will agree to the change, noted Heights Securities.

If Mr. Trump vetoes the bill, "things could really fall apart," Heights Securities said. Congress could try to pass the bill again in the new session of Congress, which begins January 3, but lawmakers might seek to revisit some provisions in the bill, such as the amount per stimulus check, which could again delay passage, they predicted.

What about the $600 checks?

For now, some analysts say it's most likely that the bill with $600 checks will move forward, although the path is "complicated," said Mills of Raymond James.

The checks would represent half of the amount directed to most U.S. households in the spring, when the Coronavirus Aid, Relief and Economic Security Act (or CARES Act) authorized $1,200 checks for eligible adults.

However, under the bill passed by Congress, one group of people would receive more money in the second round of stimulus checks than the first: dependent children, who would receive the same $600 checks as adults, up from the $500 checks that children received through the CARES Act in the spring.

Single people earning up to $75,000 would receive $600, while married couples earning up to $150,000 would receive $1,200.

The second round of checks would have the same type of income phaseouts as in the CARES Act, with the stimulus check payments reduced for earnings above $75,000 per single person or $150,000 per married couple.

The amount of payment individuals receive would be reduced by $5 for every $100 of income earned above those thresholds, according to the House Appropriations committee. That's similar to the CARES Act, but fewer higher-earning taxpayers would qualify for the checks under this formula when compared with the earlier bill.

The second stimulus checks would be phased out entirely for single people earning over $87,000 or married couples earning more than $174,000 — compared with the CARES Act's phaseout for single people earning over $99,000 and for couples earning over $198,000.

To check on how much you might receive, you can go to Omni Calculator's second stimulus calculator for an estimate.

$600 for each "dependent" child

Aside from the smaller stimulus checks for adults, the other major change under the bill passed by Congress is the amount provided for dependent children: $600 for each child, up from $500 in the CARES Act.

However, the bill states says the $600 would be directed toward each dependent child under 17 years old, which means that adults who are nevertheless claimed as dependents — such as college students and older high school students — wouldn't qualify for the checks.

Adult dependents, such as seniors who are claimed as dependents on their adult children's tax returns, also wouldn't qualify for the checks. Excluding college students and other adult dependents was a matter of debate with the first round of checks, with some families arguing that older dependents should also qualify for the payments.

A family of two parents with two child dependents could receive up to $2,400 under the provision, lawmakers said.

"Mixed-status" households

Couples who include an immigrant without a Green Card would also qualify for the checks, a provision that is retroactive to the CARES Act, the summary said.

This is important to many families because the first round of stimulus checks only went to American citizens or immigrants with resident alien status, also known as a Green Card. Legal immigrants without a Green Card, as well as undocumented immigrants, were excluded — and American citizens married to immigrants without a Green Card were also excluded, as well as their children, even if the young dependents are citizens.

Denying checks to U.S. citizens due to their spousal or parental relationship to an immigrant prompted lawsuits earlier this year over what plaintiffs claimed was an unconstitutional action.

How about Social Security recipients?

One glitch in the first stimulus payments was a slower rollout for Social Security recipients, as well as Supplemental Security Income recipients, Railroad Retirement Board beneficiaries and Veterans Administration beneficiaries. Because some of those recipients don't file tax returns — which the IRS relied on for distributing the earliest stimulus payments — millions of them waited weeks or months to get their checks.

But the new bill would ensure that those recipients would receive the $600 checks automatically, according to Senator Maggie Hassan of New Hampshire, who worked on a bipartisan stimulus bill that became the framework for the latest negotiations.

"I am particularly glad that the final text of the relief package includes my bipartisan bill to ensure that recipients of Social Security, Supplemental Security Income and certain VA benefits will receive these payments automatically," Hassan said in an email to CBS MoneyWatch.

That means that millions of Social Security, SSI, VA and Railroad Retirement benefits wouldn't risk missing out on receiving the payments, she added.

Additional stimulus benefits:

$300 a week in extra unemployment aid

Aside from the $600 stimulus checks, the stimulus bill also includes an extra $300 a week in unemployment aid. That means that jobless workers would receive their regular state unemployment payments, plus $300 on top of that through March 14, 2021.

The Pandemic Unemployment Assistance (PUA) program, which covers gig workers and self-employed workers, would also be extended, as would the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides additional weeks of jobless aid to those who have run out of their regular state unemployment benefits.

PPP loans for small businesses

The Paycheck Protection Program would be extended with another $284 billion of forgivable loans. Some of the funding will be set aside for what the bill describes as very small businesses through lenders such as Minority Depository Institutions, following criticisms that the first round of PPP loans overlooked many minority- and women-owned businesses.

The PPP program would also expand eligibility for nonprofits and local newspapers, TV and radio broadcasters.

Another $20 billion in Economic Injury Disaster Loans would be set aside for businesses in low-income communities, while $15 billion would be directed toward live venues, independent movie theaters and cultural institutions, which have been forced to cut back or shutter operations due to the pandemic.

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