House Democrats passed the $1.9 trillion American Rescue Plan early Saturday, greenlighting a third stimulus check worth up to $1,400 for taxpayers and each of their dependents.
Individuals earning an adjusted gross income (AGI) up to $75,000 per year and married couples earning up to $150,000 will receive $1,400 and $2,800, respectively, plus $1,400 for each dependent. As a result, an eligible family of four will receive $5,600.
Beyond those income limits, the payments phase out entirely. Individuals earning over $100,000 and couples earning over $200,000 will not receive a check.
“We have no time to waste,” Biden said. “If we act now, decisively, quickly and boldly, we can finally get ahead of this virus, we can finally get our economy moving again.”
Unlike the previous two payments, adult dependents qualify for this the new round of stimulus checks. The American Enterprise Institute estimates that as many as 26 million more people—mainly college students, disabled adults and elderly Americans—will now be eligible for a payment. The check could arrive as soon as next month.
The payments are based on the latest of 2019 or 2020 income tax filings. That means taxpayers may want to file their taxes before the bill passes if that would net them a larger stimulus payment.
Expectations of the stimulus plan’s passage helped propel U.S. equities to record highs last month. While some economic indicators have picked up, legislative delays could disrupt not only the stock market but millions of Americans still out of work as a result of to the pandemic and business shutdowns.
Stimulus money is often spent on rent and other necessities, according to the U.S. Department of Housing and Urban Development. While many workers have run into delays receiving the unemployment insurance they’re entitled to, stimulus checks, which are disbursed by the Internal Revenue Service rather than state governments, can help them stay current on their bills, HUD said.
Republicans and other critics have argued that more stringent income limits should be put into place regarding who gets stimulus payments, so they go only to those most in need and not those who haven’t lost income. While some recipients have saved their checks, many people spent their previous checks on rent, food and other essential bills, HUD said. In January, when the $600 checks hit bank accounts, personal spending increased by 2.4%, the U.S. Bureau of Economic Analysis (BEA) reported.
Some progressive critics, including Rep. Alexandria Ocasio, said the government should send a full $2,000 payment, in addition to January’s stimulus check.
The bill now heads to the Senate for deliberation. Democrats are hoping to have Biden sign it by March 14, when many federal unemployment provisions expire.
House Democrats were forced to drop their minimum wage increase after the Senate parliamentarian ruled Thursday that raising the federal minimum wage to $15 an hour as part of the $1.9 trillion pandemic relief legislation failed to qualify under fast-track budget rules that Democrats are using to pass the stimulus without Republican support.
Senate Finance Committee Chairman Ron Wyden and Budget Committee Chairman Bernie Sanders proposed tax penalties on bigger companies that pay low wages along, and wanted to provide incentives to smaller companies to hike the minimum wage they paid workers. But it became clear over the weekend that getting all 50 Senate Democrats to agree on specific language would risk missing the March 14 deadline for extending expiring supplemental unemployment benefits, congressional sources said.
Democratic Senator Chris Coons of Delaware said on Sunday that there will be further opportunities to consider a minimum wage hike. “This isn’t the last bill we will adopt this year. There may be several other chances for us to move a minimum wage bill. But I look forward to hearing from senators Sanders and Wyden this week,” he said on CNN.
The decision to drop the minimum wage removes a major complication in the Senate and could speed approval of the rest of the package in the chamber.