Your Money Mindset

Democrats' new $2.2 trillion bill includes a second round of $1,200 stimulus checks

Key Points
  • House Democrats have unveiled a new $2.2 trillion bill that includes a second round of $1,200 stimulus checks.
  • In some ways, those payments will be more generous than the checks that were sent out in the spring because more people would be eligible.
  • While the House could pass the bill, it remains to be seen whether Senate Republicans or President Donald Trump would see it as a starting point for negotiations.
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The big question over whether Congress will pass another coronavirus stimulus bill is, will they or won't they?

From jobs to savings to retirement plans, the coronavirus pandemic has upended many Americans' financial lives. And that has resulted in millions of people facing serious financial hardship. They are hoping for more relief, including expanded federal unemployment benefits and a second round of $1,200 stimulus checks as the American economy continues to cope with challenges from Covid-19.

Now, House Democrats have introduced a new, updated bill that reduces the total size of the aid they previously sought with the aim of appeasing Republicans.

The proposal, still dubbed the HEROES Act, includes a second round of $1,200 stimulus checks.

This time, they are calling for more generous terms than the first checks that were dispersed in the spring, which would lead to more people qualifying for the money.

Pelosi set to speak with Mnuchin about Democrats' $2.2 trillion stimulus plan
Pelosi set to speak with Mnuchin about Democrats' $2.2 trillion stimulus plan

Like the first round of stimulus checks, House Democrats are proposing payments of up to $1,200 per individual or $2,400 per married couple who files jointly, plus $500 per eligible dependent.

Full-time students who are younger than 24 and adult dependents also would be eligible for those $500 payments. That marks a change from dependent pay in the first checks, which only went to children under age 17.

Another change Democrats are seeking would have money also go to those with taxpayer identification numbers, not just Social Security numbers.

The payments would be exempt from being reduced or offset for past due child support, unlike the first checks. Democrats are also calling for the second checks to be protected from garnishment.

The measure also seeks to patch delivery issues that occurred with the first checks.

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The new checks would also be based on 2018 or 2019 federal tax returns.

Federal beneficiaries — those who receive Social Security, Supplemental Security Income, veterans or railroad retirement benefits — would stand to get their payments automatically even if they did not file 2018 or 2019 returns.

The Treasury Department would be required to reach out to people who do not typically file tax returns to let them know how they can submit their information in order receive the money.

Where the money comes from for your stimulus check
Where the money comes from for your stimulus check

To be sure, the challenge will be to get both parties to agree on the Democrats' proposal, which also includes $600 per week in enhanced federal unemployment benefits through January. That's well above unemployment aid Republicans have said they are willing to give. President Donald Trump's executive order in August included a $300 per week federal boost to unemployment benefits, that's now expiring in many states.

There are a number of items that both parties want: the Paycheck Protection Program, child care, enhanced federal unemployment payments, stimulus checks and airline industry funding, said Bill Hoagland, senior vice president at the Bipartisan Policy Center and a former Senate staff member.

"If it was just those items, I would say it could potentially move the needle," Hoagland said. 

But the Democrats' $2.2 trillion proposal is still far from the $1.2 trillion in spending Trump has said he will support. Both parties would potentially have to meet in the middle in order to finalize a deal, Hoagland said.

"I remain skeptical that it's going to somehow result in a quick action on a package," Hoagland said.

How stimulus checks are taxed
How stimulus checks are taxed