A second stimulus check is likely, according to one DC insider. Here's what lawmakers are considering

It's likely that a second stimulus check will be included in the next coronavirus aid bill. Proposals include payments ranging from a one-time $1,200 to $10,000 a month.


Since early May, top government officials, including President Donald Trump, have proposed or appeared to endorse the idea of giving Americans a second stimulus check. Although there hasn't been much progress lately, experts expect that could change in the next eight weeks.

Numerous stimulus proposals being considered in Congress include various types of direct financial aid to individuals and families. And, while Democrats and Republicans are debating many of the components of the next stimulus package, a second payment is something both parties will likely agree on, says Joshua Gotbaum, a guest scholar at the Brookings Institution, who has worked in five administrations under presidents of both parties. 

"My guess is that you're going to see another demogrant [a grant based on purely demographic principals such as age and sex] proposal as part of the package," he says. He believes another economic impact payment is likely because it will benefit both parties politically: "The Democrats have proposed it, and the Republicans can agree to it and claim it."  

When asked if stimulus checks will be included in the next coronavirus aid package in an interview with CNBC Thursday, Treasury Secretary Steven Mnuchin said, "We do support another round."

Mnuchin did not offer any additional details related to the size, the date, or the eligibility requirements of any potential stimulus. Current proposals under consideration range from a single $1,200 payment to up to $10,000 per month for families until employment returns to pre-Covid 19 levels. Here's an overview.

The stimulus proposals under consideration and where they stand

HEROES Act: $1,200 one-time payment

In May, House Democrats passed the HEROES Act, which includes a one-time $1,200 stimulus check for qualifying individuals, $2,400 for joint tax returns, and $1,200 for each child (up to three children). The maximum household payment is $6,000.

The Republican-controlled Senate hasn't yet voted on the bill, and various components of the HEROES Act make it unlikely to pass, Gotbaum says, such as extending enhanced federal unemployment insurance past its July 31 expiration date and providing additional funding for state and local governments. "Basically what the House of Representatives were saying [when they introduced the HEROES Act] was, 'Here's our starting position.' And it has a zillion things in it."

President Trump has indicated that he wants to send Americans even more than the $1,200 per qualifying adult proposed in the HEROES Act. "I support actually larger numbers than the Democrats, but it's got to be done properly," he said in a July 1 interview on Fox Business.

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A different stimulus package, perhaps one that originates in the Senate, could feature a similar kind of direct payment, according to Gotbaum, because sending out more checks to Americans could be beneficial for Republicans, politically. "Think about if you're Donald Trump, running for reelection. You'd get a lot of attention for $1,200 checks. In fact, you'd put your signature on $1,200 checks," Gotbaum says. 

Although Gotbaum uses the $1,200 figure as an example, he cautions that "nobody knows" what the actual final amount could be.

Monthly Economic Crisis Support Act: $2,000 monthly payment

The Monthly Economic Crisis Support Act, which was introduced in May by Senators Kamala Harris, Bernie Sanders, and Ed Markey, would offer up $2,000 a month payments for qualifying individuals, with families able to receive up to $10,000 per month.

Under the bill, the payments would last until employment returns to pre-Covid-19 levels. But Democratic lawmakers might have a difficult time passing it, as there is not "a lot of enthusiasm from their colleagues on the right," Elaine Maag, senior research associate at the Urban Institute, told CNBC in a June 6 interview. 

Back-to-work bonuses and extended unemployment benefits

"There are people who want to pay people something for going back to work; some people argue for a one-time payment; other people argue for raising wages," Gotbaum says. Indeed, some Democratic lawmakers are pushing to extend the extra $600 per week in unemployment benefits.

But Mitch McConnell, the Republican Senate Majority Leader, said at a Kentucky event on May 29 that he will not support extending unemployment benefits past the July 31 expiration in the next stimulus package. 

Some Republicans have pushed for back-to-work bonuses. One of those proposals was introduced by Senator Rob Portman, whose bill would grant a temporary $450 weekly payment on top of your weekly paycheck to provide an incentive for people to return to their jobs. Under his proposal, the weekly payments would only last until July 31, which is when the extended unemployment benefits under the CARES Act is set to expire. 

In his interview with CNBC, Mnuchin mentioned that the administration wants to change, rather than extend, the enhanced federal unemployment provision under the CARES Act, but he did not give details on how it would want to structure aid to unemployed workers.

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Updates on stimulus checks could come in August

On June 30, McConnell said Americans "could well" receive a second stimulus check as part of a relief bill he's hoping to have completed before Congress breaks for recess on August 7.   

The Senate is currently on a planned recess and won't return to work until July 20, leaving lawmakers with three work weeks to debate the bill before that August break begins.

Getting checks out in that time frame may be attractive, politically, Gotbaum says: "You have a lot of people who are running for reelection in August," and if Washington doesn't pass more stimulus by then, it could hurt a politician at the polls. 

One in four people say they have experienced a problem with their stimulus checks, according to a June MagnifyMoney survey of more than 1,000 Americans. But Gotbaum believes things will go more smoothly if another round of payments go out. "There are going to be some mistakes, but they've done this once so they are going to make fewer mistakes the second time than the first," he says.

Eligibility for a second check could change

As with the first stimulus checks, if a second stimulus bill is approved, it will likely include eligibility restrictions based on your income, among other factors. Even if you qualified for an economic impact payment under the CARES Act, you may not qualify again. 

"I think the people who have been hit the hardest are people who make about $40,000 a year or less. Many of them work in the hospitality industry," McConnell said at a July 6 event in Bardstown, Kentucky. "So that could well be a part of it."

When asked about the threshold for eligibility, Mnuchin noted that he spoke to Senate Majority Leader Mitch McConnell on Wednesday and would discuss the "level and criteria" for checks with senators when they return to Washington.

White House economic advisor Larry Kudlow expressed a similar sentiment on Fox Business on June 22. "We would want to target those to those folks who lost their jobs and are most in need," he said.

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A June report from the Government Accountability Office, a federal watchdog agency, found that up to 450,000 low-income Americans did not receive the money they were due for dependent children under the CARES Act. 

Ensuring lower-income Americans are supported by the next round of stimulus checks is crucial, says R. A. Farrokhnia, a professor at Columbia Business School. He co-authored a study that examined the spending and saving habits of more than 1,600 people who received their stimulus check by April 21.

When issuing the first economic impact payments, "sliding scale stimulus checks would have been more appropriate so those on the lower end of the income bracket would get a higher share of the checks, also depending on your cost of living," which varies state by states, he says.

"You're seeing low-income people still suffering and financial situations worsening every day, so a solution needs to be found to alleviate some of the financial pain because costs have stayed steady," Farrokhnia says.

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