Senate Republicans eye $75K income threshold for coronavirus checks
Senate GOP negotiators are eyeing income thresholds of $75,000 for individuals and $150,000 for couples for the direct payments President Trump has proposed to ease the economic impact of the coronavirus.
Republican senators say they want to model direct payments on the stimulus checks former President George W. Bush sent out in 2008 during the financial crisis. Twelve years ago, the rebates were reduced for individual incomes above $75,000 and joint incomes above $150,000.
GOP lawmakers caution, however, that they haven’t yet finalized the proposal, which remains under negotiation.
“It hasn’t been written up yet, but I think the idea was to follow the formula used in 2008. And those are income thresholds that I think everybody finds acceptable in describing middle-income taxpayers,” said Senate Republican Whip John Thune (S.D.), who has been in the middle of talks for putting together phase three of a stimulus proposal.
Thune said he expects the phase-out to be modeled on the “way they did it” in 2008.
Setting the income threshold at $75,000 per individual would allow the benefit to cover many workers in low- and middle-income jobs who would have trouble covering expenses if they missed work.
Restaurant workers are one sector of the economy that will be hit especially hard by quarantines and state, local and federal guidelines regarding social gatherings.
A second Republican senator familiar with the proposal confirmed negotiators are looking at phasing out direct payments at $75,000 in individual income and $150,000 in joint income.
The lawmaker said one possibility under discussion would be to provide “$1,200 for each adult and maybe $500 for kids.”
“It would be a pretty quick phase-out,” the source said of individuals making more than $75,000.
A third Republican said the total cost of the direct payments would be in the ballpark of $300 billion. That would be less than the Treasury Department’s request for two $1,000 payments for eligible adults, which would cost an estimated $500 billion.
But not all Republicans are on board yet with the idea of direct payments.
Sen. Lindsey Graham (R-S.C.) said after a lunch meeting Wednesday that the money would be better spent on beefing up unemployment benefits.
“I think it makes sense later, not now. Here’s what people are worried about today: ‘I lost my job.’ The unemployment benefit in South Carolina is $323 a week,” Graham said. “That’s not nearly enough to take care of the needs of most Americans.”
“What we’re talking about doing is for the federal government to make up the difference between whatever your unemployment check is at the state level up to 75 percent of your income if you make $80,000,” Graham said.
He added that the unemployment system is “woefully inadequate for the circumstance that we’re under.”
Sen. Rand Paul (R-Ky.) said he also would prefer boosting unemployment benefits instead of direct payments, which would also go to people who haven’t lost work because of the crisis.
“I think the best way to help people who are out of work from quarantine and the coronavirus is through unemployment benefits,” he said. “I think it should be related to employment or unemployment.”
“If you’re still employed and doing well, why would we want to send you $1,000? It just seems to me fiscally irresponsible just to send everybody money. The main reason people are not spending money is not because they lack money but because of fear of the virus,” he added.
A Republican senator who requested anonymity to voice concerns about direct payments wasn’t in favor of the policy but noted the decision has already been made to include them in phase three of the stimulus package.
“If I was drafting the bill, it would not be in the bill,” the lawmaker said. “I don’t think it’s a terribly effective way to fix” the economy.
But the GOP senator said it’s a moot point.
“It’s in there, and it isn’t coming out,” the senator said.