Americans are holding onto hope that a second stimulus check is on the way soon, but there is a strong chance that the next bill could have three major changes from the previous one. With the CARES act, individual citizens received payments in the amount of $1,200, which was adjusted accordingly for couple filing taxes jointly, as well as $500 for each child claimed by a legal guardian. Then there is the proposed HEROES act, which would increase the amount of stimulus payments that citizens would receive.
Now, Forbes reports that the next official coronavirus stimulus bill that ends up being signed into law will most likely have some significant changes. First, there will likely be lower federal unemployment benefits. Currently, those on unemployment due to the COVID-19 pandemic have been receiving weekly unemployment payments of $600. Forbes notes that congressional Republicans have been opposed to lengthening this beyond the originally set deadline of July 31. Treasury Secretary Mnuchin has also hinted that the new update to this plan would likely cap benefits at the amount each individual recipient earned at their previous job before they were laid off due to the virus.
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The next bill may also have a smaller and more targeted round of stimulus checks. Republican Senate Majority Leader Mitch McConnell previously stated that he believes those earning less than $40,000 annually are the most impacted demographic, and therefore should be the most helped. However, on July 1 President Trump stated on record that he would like to see citizens receive more money than even those in the opposing party. “I support actually larger numbers than the Democrats, but it’s got to be done properly… I want the money getting to people to be larger so they can spend it.” At this time there is no official word on what the next amount would be, or who would qualify.
Finally, the next bill would likely include payroll tax cuts, which is something else Trump has been pulling for. He previously stated that his plan is to get a payroll tax cuts provision included in any new bill. “I told Steve [Mnuchin] just today, we’re not doing anything unless we get a payroll tax cut,” Trump said during a May 3 Fox News town hall. “That is so important to the success of our country.” Payroll taxes include Social Security and Medicare from employees, as well as from employers. The purpose of payroll tax cuts is to take less money from workers, as well as employers.
Tax Foundation senior policy analyst Garrett Watson spoke out about the possibility of a payroll tax cut and expressed that he doesn’t believe it would actually be helpful. “When you do a temporary tax cut like what the White House is proposing, the literature generally finds there isn’t a big effect on employment levels,” Watson stated. “If you look at the 2009, 2 percentage points payroll tax cut under the Obama administration, the evidence bears out that most of that federal tax cut was saved by consumers.”
