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As Washington lawmakers work to come to an agreement on a new coronavirus relief package, one key question has emerged: Will the next stimulus checks be $1,400?
President Joe Biden sought to end that debate in a press conference on Friday by re-affirming his commitment to $1,400.
“I’m not cutting the size of the checks,” Biden said. “They’re going to be $1,400. Period.
“That’s what the American people were promised.”
The president also said the payments need to be targeted so that “folks making $300,000 don’t get any windfall.”
The additional direct payments are part of Biden’s $1.9 trillion coronavirus relief plan.
The $1,400 sums would go to individuals, as well as child and adult dependents, based on certain income thresholds. If the same criteria are used as for the first two rounds of checks, individuals making up to $75,000 and married couples who earn up to $150,000 would see full payments.
The stimulus checks are very popular with the American public. A recent poll from Quinnipiac University found that 78% of Americans favor the $1,400 checks, compared to 68% who support Biden’s overall $1.9 trillion package.
A group of 10 Republican senators unveiled their own $618 billion relief proposal this week. That package has checks of $1,000 per person, plus $500 per qualifying child and adult dependent.
Those lawmakers also sought to lower the thresholds for full payments to $40,000 per individual and $80,000 per couple. The payments would also phase out more quickly and be capped at $50,000 per individual and $100,000 per couple.
Some lawmakers are concerned that Biden’s plan, as it stands, could provide stimulus checks to people who do not need them.
Research from the Penn Wharton Budget Model released this week found that 73% of the $1,400 checks would go toward savings and provide limited stimulus to the economy.
Yet other research from the University of Illinois found that about 8 million Americans without jobs are not receiving unemployment benefits, thus bolstering the argument for sending more direct payments.
Much of Biden’s commitment comes from previous promises to send $2,000 stimulus checks.
While some Congressional lawmakers also advocated for that sum, they were only able to get $600 direct payments into the final deal in December. The $1,400 checks would help them reach that $2,000 total.
“It’s pretty clear that they’re committed to a $1,400 payment,” said Erica York, economist at the Tax Foundation. “It’s probably safe to say that people who got the $600 payment will get the $1,400 payment.”
The question is how policy makers could restrict the money so that people who did not receive the $600 checks would also not get the $1,400, she said.
The checks generally phase down at a certain rate — $50 for every $1,000 over the thresholds for full payments. Because the second payment was lower than the initial $1,200 checks, fewer people received reduced payments.
Now, with $1,400 checks, more people could be eligible unless they adjust the phase-down rate, York said.
Changing that rate probably would not result in a lot of people getting excluded from payments, the Tax Foundation’s research found.
By doubling the rate from 5% to 10%, a little over 92% of taxpayers would still get a payment, York said. That’s compared to more than 94% who would receive the money if the rate stayed the same.
But such a change could better target the money towards those people who qualified for the $600 checks, York said.
For those who are eager to receive a third check, the good news is that most people will not have to do anything. That’s because the IRS already has the information on file from the first and second rounds, according to York.