With the number of coronavirus cases on the rise in the U.S., the need for a second stimulus check is imminent. When the Senate completes their recess on July 20, debates will begin on a plan for a second stimulus package. But there’s a catch. The income limit for a new stimulus check could be around $40,000.
State of the economy
The decision will depend on how the government perceives the economy to be doing. It’s complicated by the fact that 4.8 million jobs were added in June, and people are returning to work. In addition, the unemployment rate dropped from 13.3 percent to 11.1 percent.
On the other hand, the Labor Department reported that the number of Americans newly applying for unemployment has been over 1 million for 16 weeks. Overall, 43 percent of low-income Americans either experienced a loss in income or a job loss due to COVID-19 as of April. With the uptick in coronavirus cases and states shutting down businesses, the economy could be going backwards.
Mitch McConnell speaks out
Senate Majority Leader Mitch McConnell mentioned in an interview that the cap for the next stimulus check could be around $40,000. “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,” he said.
The $40,000 cap would represent over 80 million Americans. The cap amount could have originated from an open letter by 150 economists published in June, which clarified that “among people who were working in February, almost 40 percent of those in households making less than $40,000 a year had lost a job in March.”
The cap could be problematic for certain areas of the country, such as San Francisco, where a low income is defined as $60,900.
As far as the unemployment checks that people are receiving for an extra $600 per month, there is speculation that the payments could continue, but be reduced to around $300 per week.
The Senate returns from recess on July 20, then recesses again from August 10 to September 7. Starting July 20, the Senate will hopefully work quickly to come up with a new stimulus package. If passed, checks could go out as early as August or September.
Visit this online calculator to see how much you would get from the government with a second check based on the $40,000 ($80,000 for a couple) income cap.