/Second Stimulus Check Confirmed In GOP Proposal, But Not $1,200 Amount Or $75,000 Income Cap

Second Stimulus Check Confirmed In GOP Proposal, But Not $1,200 Amount Or $75,000 Income Cap

Reports yesterday that the amount and income eligibility of a second stimulus check had been confirmed appear to be premature. The reality is that while a second direct payment was included in the proposal summary circulated by Republicans on Thursday, no other details were offered.

Second Stimulus Check Included In GOP Stimulus Proposal

There has been rampant speculation over whether or not a second stimulus check would materialize as part of the coronavirus stimulus package proposal that Senate Republicans are set to unveil. After resisting another direct payment, most Republicans now acknowledge that such a payment is needed given the worsening economic outlook and the record number of coronavirus cases in the United States. Republicans have coalesced around a second stimulus check in recent days, a marked departure from their stand only two months ago.

MORE FROM FORBESStimulus Package Update: Republicans Unite On Second Stimulus Check, Balk Over Payroll Tax Cut

Earlier this week, Senate Majority Leader Mitch McConnell officially endorsed another stimulus check. “We want another round of direct payments – direct payments to help American families keep driving our national comeback,” he noted.

Moreover, a draft proposal, circulated early Thursday and shared by The New York Times, confirmed the existence of a second stimulus check. Under the header “Stimulus Payments,” the document states “these will be included.”

$1,200 Amount And Income Eligibility of $75,000 Are Still Speculative

While the GOP draft substantiated that Republicans intend to propose a second payment, it did not confirm speculative reports that the payment would be for $1,200 or that it would mirror the first stimulus check under the CARES Act, which put an income cap of $75,000 for eligible single filers to receive the full payment.

Yes, the sentence under the “Stimulus Payments” header starts with “these will be included:’ however, the sentence continues to state unequivocally, “but the amount of the payment and eligibility criteria are TBA.” From the GOP draft to your ears.

Why Did Some Report That $1,200 Was The Confirmed Amount?

Multiple outlets reported the $1,200 figure yesterday, but all relied on one source, Treasury Secretary Steve Mnuchin, making a one-line remark. Referring to a second stimulus check, Mnuchin said, “we’re talking about the same provision as last time, so our proposal is the exact same proposal as last time.”

MORE FROM FORBESStimulus Package Proposal Delay Could Jeopardize Size Of Potential Second Stimulus Check

Mnuchin’s Word Is Not Gospel

As was pointed out in a previous column, Mnuchin has erred in recent statements and it may not be appropriate to rely on a one-sentence remark without corroborating evidence. For example, he mistakenly said as late as Monday that a payroll tax cut was “in the bill.” As the GOP draft circulated on Thursday showed, it wasn’t.

McConnell has also gone to great lengths to keep the amount and eligibility criteria guarded given the fluidity of the negotiations with the White House and the potential need to pivot quickly. As The Hill reported, he declined to talk about details of the direct payments when pressed by reporters this week. “We’ll lay out the specifics. I’m going to introduce a bill in the next few days that is a starting place that enjoys fairly significant support among Republican senators, probably not everyone. And, at that point, we’ll be more specific about how to allocate. But we do envision direct checks again,” he said on Tuesday.

When Will We Know And What Could Change?

We will hopefully find out the specific details around the proposed second stimulus check on Monday. “The [Trump] administration has requested additional time to review the fine details, but we will be laying down the proposal early next week,” McConnell said. “We have an agreement in principle on the shape of the package.” Republicans will spend today and the weekend trying to hammer out details with the White House and are scheduled to unveil the plan Monday morning when the Senate convenes.

There are good reasons for a second stimulus payment to mirror the first one in terms of size and income eligibility. For one, it will make it easier to negotiate with Democrats on a compromised version. Secondly, it will help accelerate the distribution of payments as “the more complex the criteria and the more they differ from the first round, the longer it might take to get payments out,” according to the The Wall Street Journal. “If the parameters stayed the same, we could do it really quickly,” Senator Thune said.

However, there is still a faction within the White House that is pushing to revive the inclusion of a payroll tax cut in the stimulus proposal. White House economic advisor Stephen Moore insisted that the payroll tax cut was back on the table after the GOP delayed released of the proposal yesterday. As mentioned in yesterday’s column, “while one should take Moore’s comments with the same grain of salt as Mnuchin’s, the potential resurrection of a payroll tax cut could imperil the size or income cap of a second stimulus check.”

The Upshot

The odds are now in American’s favor for a second stimulus check to be included in the next stimulus package; however, whether the payments are for $1,200 or less has yet to be confirmed and whether the income eligibility will remain the same as under the CARES Act is still tentative.

Further Related Reading:

Stimulus Package Update: Republicans Unite On Second Stimulus Check, Balk Over Payroll Tax Cut

Stimulus Package Proposal Delay Could Jeopardize Size Of Potential Second Stimulus Check

Is Trump Using Next Stimulus Package To Undermine Funding Of Social Security And Medicare?

Trump Threatens Stimulus Package; Insists On Including Payroll Tax Cut

Trump’s Payroll Tax Cut Is An Ineffective Way To Help The Economy

Second Stimulus Check And $600 Benefit Extension May Be Delayed; Here’s Why That Might Be A Good Thing

Expect $600 Federal Unemployment Checks Slashed To $400 Or Less

Second Stimulus Check Income Eligibility May Be Capped At $40,000

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