House Democrats reject plan to curtail $1,400 stimulus payments

Senior House Democrats on Monday night proposed sending $1,400 stimulus payments to Americans with up to $75,000 in annual income, rejecting an earlier plan under consideration to sharply curtail the benefits.

House Ways and Means Chairman Richard Neal, D-Mass., released legislation that would send the full stimulus payment to individuals earning $75,000 per year and couples earning $150,000 per year. Congressional Democrats had explored curtailing that benefit to $50,000 for individuals and $100,000 for married couples, a position embraced by Sen. Joe Manchin of West Virginia, a conservative Democrat.

The broadening of stimulus check eligibility among middle class households is the latest sign that Democrats are moving ahead without Republican support on President Joe Biden’s $1.9 trillion economic relief package, which would also extend unemployment benefits, send hundreds billions to schools and local governments as well as strengthen vaccine delivery and health care. Even as the Senate proceeds this week with former president Donald Trump’s impeachment trial, the House Ways and Means Committee and other panels will be working to finalize and vote on the coronavirus legislation. The final bill would need to be passed by both chambers of Congress to become law, but that could happen within weeks.

Compared with previous plans, Democrats are accelerating the rate at which the stimulus payments decline for higher-income earners, a move intended to prevent wealthy Americans from receiving the benefit. Under the new plan, singles earning $100,000 a year and couples earning $200,000 would receive no stimulus payments.

The stimulus checks would be based on taxpayers’ 2019 or 2020 income returns, according to a summary of the proposal. The plan would aim to give full payments to those who qualify based on their 2020 returns, even if those are not processed for months.

The proposal comes amid days of internal disagreements among Democrats over how to structure the next round of stimulus payments, a core component of Biden’s stimulus plan. The legislation still must be passed through the House and Senate, and it is unclear whether Manchin or other conservative Senate Democrats will object to the proposal.

Along with the stimulus payments, the House Ways and Means Committee released details Monday of other significant parts of the aid package, including a new child income tax credit for millions of American households. That benefit would offer $3,600-per-child over the course of a year for each child younger than six years of age, as well as $3,000-per-child for each child ages six to 17. Those child tax benefits would diminish for singles earning more than $75,000 a year and couples earning over $150,000.

The measure would also extend federal unemployment benefits, now set to expire in mid-March, through the end of August and increase the benefit amount from its current level of $300 a week to $400. Biden’s initial plan called for funding additional unemployment benefits through September.

Additionally, Democrats included a $15-per-hour minimum wage in the package, although Biden has said that provision faces long odds in the Senate. The nonpartisan Congressional Budget Office released a report on Monday that estimates the minimum wage hike would cost 1.4 million jobs but lift 900,000 people out of poverty, intensifying the debate over that controversial provision.

“Our nation is struggling, the virus is still not contained, and the American people are counting on Congress to meet this moment with bold, immediate action,” Neal said in a statement.

The bill would also “dramatically” increase premium subsidies for Americans receiving their health insurance through the Affordable Care Act for two years, said Larry Levitt, executive vice president for health policy for the Kaiser Family Foundation, a nonprofit group.

The design of the checks have emerged as one of the most hotly debated provisions in the rescue package. Centrist lawmakers such as Manchin have called for narrowing the payments to prevent them from going to higher-income Americans, arguing that those who have not lost their jobs do not need help. That idea was met with increasing resistance from other members of the party, including Senate Finance Chairman Ron Wyden, D-Ore., and Senate Budget Chairman Bernie Sanders, I-Vt., as well as House lawmakers in the Congressional Progressive Caucus.

Asked about the new thresholds after Neal’s plan was released, Manchin did not immediately attack them and said he was “just trying to make sure that people [receiving them] are truly in need.”

Wyden said in a statement Monday that he would push for the unemployment benefits to be restored for the duration they were originally. “[I] am going to work to find a resolution that preserves both relief payments and jobless,” Wyden said. “We can do both.”

Manchin has influence over the issue, because the Senate is split 50-50 between Republicans and Democrats, so Democrats need his vote as they aim to push the legislation forward without GOP support.

Wyden and Sanders have publicly criticized the proposals to lower the income thresholds to $50,000, saying middle-class families have suffered pay cuts and other economic shocks and need relief, too. Sen. Jon Ossoff, D-Ga., whose election victory in January helped seal Democrats’ Senate majority, also opposes lowering the threshold on the checks, according to a spokeswoman.

The White House has repeatedly said it is willing to compromise on the thresholds, with White House spokeswoman Jen Psaki saying the administration is open to negotiations with Congress on the matter. On Sunday, Treasury Secretary Janet Yellen suggested that the administration was not on board with Democrats’ plans for lower income thresholds.

“The exact details of how it should be targeted are to be determined, but struggling middle-class families need help, too,” Yellen said on CNN.

Biden gave similar remarks in an interview with CBS Evening News, saying he was “wide open” on the precise levels of the income threshold.

The debate about the check thresholds represents one of many disputes Democrats may face as they try to pass Biden’s $1.9 trillion stimulus package through Congress. There is a wide ideological gulf between the party’s moderate and liberal wings, which is likely to produce numerous policy fights—over the $15-an-hour minimum wage; the scale of unemployment assistance; and the overall cost of the bill, among other things—on the way to passing their first major piece of legislation under Biden.

The split within the party appeared to intensify over the weekend. Manchin told WV News last week that he supported the next round of payments not going to individuals earning more than $50,000 or couples earning more than $100,00.

“An individual of $40,000 income or $50,000 income would receive it. … And a family who is making $80,000 or $100,000, not to exceed $100,000, would receive it,” Manchin said. “Anything over that would not be eligible, because they are the people who really are hurting right now and need the help the most.”

But on Twitter and on CNN this weekend, Sanders slammed Democrats for embracing a plan that would cut out individuals earning $52,000. He also pointed out the potential political downside for the new Democratic administration of sending fewer payments than Trump had. Wyden has also said in a statement that families that had received the first two payments would expect a third.

“Unbelievable … working class people who got checks from Trump would not get them from Biden. Brilliant!,” Sanders said on Twitter.

Rep. Pramila Jayapal, D-Wash., chair of the Congressional Progressive Caucus, said Monday she is in “nonstop” conversations with White House officials about “why this makes no sense, politically or policy-wise.”

While passing a budget resolution through Congress earlier this month that set the stage for approval of the broader relief bill, Sens. Susan Collins, R-Maine, and Manchin co-sponsored an amendment to exclude affluent families from the stimulus checks. The plan did not define an income amount, leaving that open to interpretation. Sanders and all Democrats voted for the proposal.