The majority leader in the Senate Mitch McConnell said that the second payment of aid due to coronavirus “may be” part of the next bill assistance. No less significant was his subsequent remark: “I think the people who suffered the most, are the people who earn about $40,000 a year or less,” he said. This writes Forbes.
McConnell statement about the second wave of payments
This is the first time McConnell admitted that some aid payments can be. His comments came after the Senate began a two-week break and followed a record increase in the incidence of coronavirus in the United States. Despite the fact that the majority leader in the Senate expressed positive intentions, the final approval of payment has not yet occurred.
The use of McConnell is $40 000 should not be taken lightly
You should not ignore the comments by McConnell that people earning less than $40,000 a year, suffered the most.
“Numerous sources say that McConnell didn’t just call $40 000, this will help to reduce the number of those who will be eligible to receive assistance,” wrote Jeff Stein. In many respects this may indicate how McConnell will try to find a compromise between the adoption of the second wave of payments, at the same time constraining the overall cost of the next bill.
The figure of $40 000 is also consistent with the stated goals of the McConnell — to make the next cycle of payments more focused.
“I think that the next round of payments should be more focused on those who really need the money,” said democratic Senator from Maryland Ben Cardin.
According to Jerome Powell, Chairman of the Federal reserve system of the United States, in March, about 40% of Americans earning less than $40,000 lost their jobs. Thus, the use of $40 000 as the upper boundary will allow Congress to help those who have been disproportionately affected by the pandemic.
McConnell recently told the President of the United States Donald Trump that the following bill assistance may not exceed $1 trillion. While this sort of posturing, it reflects the pressure on McConnell from his conservative base.
Limits on income will help to reduce the cost of the package
Reducing the upper limit of income, McConnell can reduce the overall value of the following financial aid package. In the first round of incentive payments under the Law CARES, the Department of Finance and the internal revenue Service (IRS) sent checks to more than 159 million Americans, totaling nearly $267 billion was produced 35 million payments.
If you enter an income limit of $40 000 for a second round of stimulus payments, number of eligible Americans would be drastically reduced. Kyle Pomerleau, economist and fellow at the American enterprise Institute, wrote on Twitter that the use restrictions in the amount of $40 000 will lead to the fact that only about 80 million households will be eligible for payments.
Two factors that can increase a right to payment
The income threshold for married couples filing a joint Declaration
Taking into account that the first round of payments was entitled to a higher income for married applicants, it is safe to assume that if a second round of payments will be accepted, he will follow suit. Pomerleau added that very rough estimate shows that “the IRS has 12 million married couples submitting a joint Declaration in the income range from $40 000 to $75 000”.
Similarly, the first round of payments included the gradual border of income. While individual taxpayers earning less than $75 000, received a check in the amount of $1,200, those who earned more than $75,000 but less than 99 000 are eligible for partial payments. If a similar provision would be included for the next round of payments, it will also increase the number of recipients.
Although the total number of payments will vary depending on the specific criteria, it is likely to be much lower than the nearly 200 million of payments from the first round.