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We’re at an impasse.
Both Senate Republicans and House Democrats support sending another round of $1,200 stimulus checks to Americans, however, they can’t come to an agreement for the broader stimulus bill in which the checks would be included. Democrats want more money for state governments and unemployment benefits, while Republicans want the extra $600 weekly federal unemployment benefits reduced and COVID-19 lawsuit immunity for businesses.
But the economic situation the country faces suggest that both parties will come to an agreement for more stimulus. The number of American on state unemployment rolls shot up from 1.8 million on March 14 to 24.9 million by May 9. As states eased their shutdown orders, that number fell to 16.2 million as of July 11. However, as coronavirus cases soar through much of the country, state unemployment rolls shot back up to 17 million the week of July 18.
Simply put: The economy is teetering on the brink of a double-dip recession. Indeed, American CEOs now foresee a W-shaped recovery—a double-dip recession—as more likely than a V-shaped recovery.
Here’s what we to know about where things stand, and when you might actually see a check.
- What do the Democrats want?
- What is the Republican stimulus plan?
- What’s holding up the passage of the stimulus bill?
- When would I get my second stimulus check?
- Is it possible no second stimulus checks get sent out?
What do the Democrats want?
The Democrats passed the $3 trillion HEROES Act in May, which would have provided $1,200 to most Americans. Similar to the CARES Act it would have provided checks to Americans earning up to $75,000 per year and $2,400 for couples earning up to $150,000 annually.
The bill bumped the $500 per dependent in the CARES Act up to $1,200. And it would’ve also sent stimulus money for adult dependents.
House Democrats still support their stimulus check proposal in the HEROES Act.
What is the Republican stimulus plan?
What Senate Republicans are proposing in the HEALS Act is nearly identical to the first stimulus bill. It would send a stimulus check worth as much as $1,200 for individuals or $2,400 for married couples, plus $500 for each qualifying child. That amount would decrease for adjusted gross income above $75,000 per individual or $150,000 per qualified couple. And the checks phase out for individuals earning above $99,000, head of household filers with one child above $146,500, and joint filers with no children at $198,000.
Young adults who are claimed as dependents on their parents taxes did not receive a stimulus check the first time around. However, McConnell said his plan would provide “more support” for adult dependents. His party is proposing $500 per dependent regardless of age (it was capped age 17 in the first round of stimulus checks).
What’s holding up the passage of the stimulus bill?
Democrats and Republicans are very close in terms of what they’re proposing for stimulus checks. It’s the other items where the debate is more heated.
Democrats would like more than $1 trillion for state and local governments who are facing budget shortfalls from the pandemic. Republicans are less open to state and local government money, and instead want to provide immunity to businesses from COVID-19 related lawsuits—something Democrats are uneasy with.
But the most heated Congressional debates have dealt with the extending the $600 unemployment checks, which lapsed following the week of July 26. Republican leaders are frustrated that the benefit pays around 7 in 10 jobless Americans more in unemployment benefits than they were earning while working. GOP members are asserting that such generous benefits could deter the jobless from seeking work.
That’s why Republican leaders propose reducing the unemployment benefit bonus—which is paid on top of state benefits—from $600 to $200 per week for the next two months. After that period, the benefit would transition into covering 70% of the unemployed persons’ previous income through the end of the year.
Democratic leaders reject that idea, and want the extra $600 unemployment benefit extended into January 2021.
“Millions of people could have fallen into poverty without this $600,” said House Speaker Nancy Pelosi during an interview over the weekend. “A building is on fire and they are deciding how much water they want to have in the bucket.”
When would I get my second stimulus check if Congress passes the stimulus bill?
After the passage of the CARES Act on March 27, Americans started to receive their stimulus checks as early as the week of April 13. But for millions of Americans, including those on Social Security, those checks were delayed until they provided additional information.
This go around, White House officials have suggested the distribution of the checks could be sped up more, given the system is already in place. However, until the bill passes and the U.S. Department of the Treasury issues guidance, nothing is certain. But it’s safe to assume that the checks for many Americans could come as early as two weeks after President Donald Trump signs the next stimulus bill.
Is it possible no second stimulus checks get sent out?
White House Chief of Staff Mark Meadows said last week the two parties are “nowhere close to a deal.” He even suggested they might not pass anything.
“No deal certainly becomes a greater possibility the longer these negotiations take,” Meadows said.
Another stimulus bill is far from guaranteed. But at the same time, with the jobless rate still above double digits, there is certainly pressure for the two parties to come to an agreement sooner than later.
More must-read finance coverage from Fortune:
- Stimulus check calculator: Find out how much your second IRS payment could be worth under the HEALS Act
- VC icon Alan Patricof and SoulCycle vet Abby Levy launch fund to invest in aging
- When will the pandemic end? Not before 2022, ex-U.S. surgeon general warns
- Women are more worried about layoffs than their male coworkers
- PPP part 3? Everything you need to know about the proposed expansion of the small business loan program
- Bank of America CEO Brian Moynihan on how business can measure stakeholder capitalism
