GOP to Propose Another Round of $1,200 Stimulus Checks–Who Will Be Eligible?

The latest GOP-led coronavirus relief package will include sending another round of stimulus checks to the same people who received a check the first time around.

Treasury Secretary Steve Mnuchin told reporters on Thursday that the proposal for stimulus checks is the "exact same provision as last time." Senate Majority Leader Mitch McConnell is expected to release additional details about the package on Thursday.

Under the CARES Act, individuals with an adjusted gross income of $75,000 or less were given $1,200, with $2,400 allocated for joint filers earning under $150,000. Additional payments of $500 for each child under 17 were also allocated. An extra $500 was allocated for each dependent child, as well.

Democrats and Republicans all the way up to President Donald Trump agreed a second round of stimulus checks may be needed to help individuals and the economy during the coronavirus pandemic. If Democrats had their way, checks would increase the amount paid for dependents and expand eligibility.

The Democrat-led HEROES Act, which passed largely along party lines in the House in March, took direct payments a step farther. It kept the same base payments as the CARES Act, but expanded additional payments to include all eligible dependents, not just children, and increased payments to $1,200 for up to three dependents. It also would allow for certain undocumented immigrants deemed ineligible under the CARES Act to receive payments.

While Democrats looked to expand on the original payment method, Republicans indicated they were looking at a more targeted approach.

At an event in Kentucky during the Fourth of July congressional break, McConnell floated the idea that stimulus checks could be reserved for those in the $40,000 income range. Playing into the theme of a targeted approach, many of these people work in the hospitality industry, a sector particularly hit hard by the pandemic.

gop coronavirus stimulus checks pandemic
Senate Majority Leader Mitch McConnell speaks during a press conference following the weekly Senate Republican policy luncheon in the Hart Senate Office Building on June 30 in Washington, D.C. On Thursday, McConnell revealed details about the GOP's stimulus package, including who would receive a second stimulus check. Stefani Reynolds/Getty

Income caps at $40,000 for individuals, about half of what it was under the CARES Act, seemingly made sense for a package with half the budget of the March bill. However, each part of the bill isn't wholly independent from the rest, and the money that can be allocated for stimulus checks depends on the entirety of the package–and the budget.

Through negotiations with Democrats, the $1 trillion spending cap the White House had eyed is likely to go up and The New York Times reported Republican officials acknowledged Congress could end up passing a package in the $2 trillion range.

At the halfway mark between the $3 trillion HEROES Act and the White House's starting point, it's a budget reminiscent of the CARES Act. The March bill allocated $290 billion for stimulus checks and unanimously passed Congress. That unity wasn't on the Hill this time around, and infighting in the Republican party took center stage leading up to McConnell's unveiling.

Kentucky Republican Senator Rand Paul, a strong critic of the forthcoming package, told Fox News' podcast on Wednesday he opposed the first round of payments. He said it made "no sense" to give money to people who were still employed and argued that it didn't boost the economy because people had nowhere to inject the money into, as many businesses were closed.

Trump long supported sending a second round of stimulus checks in conjunction with other pro-growth measures. The payroll tax cut the president pushed for didn't make it into the base bill, but Treasury Secretary Steve Mnuchin told CNBC on Thursday morning that Trump changed his preference.

"One of the issues with the payroll tax cut is that people get that money over time," Mnuchin said. "So the president's preference is to make sure we send out direct payments quickly so that in August people get more money."

There is "no question" that stimulus checks effectively drive economic growth, according to Mnuchin, who said people spending their first stimulus check in small businesses is "having a big impact in the economy."

McConnell unveiling the package is just the first of many steps before a package is enacted and both the Senate and House have to vote on it. Then, it has to make its way to Trump's desk so legislators don't expect a finalized package until August. But if both sides of the aisle can come to an agreement on a package that includes stimulus checks, Mnuchin said people could see their money "very, very quickly."