Biden agrees to limit number of people who will get checks in Covid relief plan

Key Points
  • President Joe Biden has backed a plan to phase out direct payments more quickly in the $1.9 trillion coronavirus relief bill.
  • The $1,400 checks in the Senate's version of the plan will start to phase out at $75,000 in income for individuals and $150,000 for joint filers, and end fully for those who earn $80,000 and $160,000, respectively.
  • The income caps are lower than those passed by the House.
  • Moderate Senate Democrats had called to limit the scope of the payments as the party tries to pass its rescue plan in the coming days.
President Biden agrees to faster phaseout of direct stimulus checks
President Biden agrees to faster phaseout of direct stimulus checks

President Joe Biden has backed a plan to cut the income caps for Americans to receive a direct payment as part of the $1.9 trillion coronavirus relief package set to pass in the coming days, a Democratic source said Wednesday.

The phase-out levels for the $1,400 stimulus checks are:

  • $75,000 in income for single filers; the cap for receiving some payment is now $80,000
  • $112,500 for heads of households; the cap is now $120,000
  • $150,000 for joint filers; now capped at $160,000

The structure would slash the direct payment income caps approved by the House. Under the lower chamber's bill, individuals making up to $100,000 (and joint filers earning up to $200,000) would have received some amount.

Eight million people who would have received payments under the House bill would lose them under the Senate plan, according to a rough estimate from Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center. Even more people are set to receive smaller payments than they would have under the House proposal, he added. Gleckman estimates the changes would save about $15 billion in a nearly $2 trillion piece of legislation.

Another estimate said roughly 12 million people could lose checks due to the policy change.

Asked Wednesday about whether Biden supports the proposal, White House press secretary Jen Psaki said "he is comfortable with where the negotiations stand."

President Joe Biden speaks about the American Rescue Plan and the Paycheck Protection Program (PPP) for small businesses in response to coronavirus, in the Eisenhower Executive Office Building in Washington, DC, February 22, 2021.
Saul Loeb | AFP | Getty Images

The changes come as moderate Senate Democrats call to limit the scope of the checks included in the legislation. To pass the relief bill under budget reconciliation, party leaders cannot lose a single vote among the 50 members of the caucus. Democrats are using the process that enables legislation to pass with a simple majority as Republicans question the need for more spending to boost the economy.

Democrats limited eligibility for the checks once before to appease centrist lawmakers.

Disagreements within the party could have threatened Democrats' plans to get the bill through the Senate by this weekend and to Biden's desk before unemployment aid programs expire on March 14. The House is expected to approve the Senate's version of the bill next week.

The Senate plan is set to keep the same unemployment insurance supplement passed by the House. It would add a $400 per week jobless benefit through Aug. 29.

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

The expected change in the Senate bill drew the ire of some progressives in the House. Rep. Alexandria Ocasio-Cortez, D-N.Y., tweeted: "Conservative Dems have fought so the Biden admin sends fewer & less generous relief checks than the Trump admin did."

"It's a move that makes little-to-no political or economic sense, and targets an element of relief that is most tangibly felt by everyday people. An own-goal," she wrote.

The Senate on Thursday plans to take its first procedural vote toward passage of the relief bill. But the chamber has to clear days of hurdles before it can send the legislation back to the House for final passage.

Sen. Ron Johnson, R-Wisc., plans to force Senate clerks to read the entire bill out loud, which will add hours to the process, according to NBC News. Then lawmakers will hold up to 20 hours of debate on the plan, followed by a marathon vote on amendments to it.

Once the chamber votes on all amendments (with no limit on the number proposed), it can move toward approving the legislation.

Along with the checks and unemployment aid, the House-passed bill includes funds to boost Covid-19 vaccinations, an expansion of the child tax credit, new aid to small businesses, money to help schools reopen, and relief for state, local and tribal governments.

— CNBC's Thomas Franck contributed to this report

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Three ways the coronavirus stimulus money may change your 2020 tax return
Three ways the stimulus money may change your 2020 tax return