WASHINGTON, DC – MAY 07: U.S. Speaker of the House Rep. Nancy Pelosi (D-CA) speaks during a weekly … [+]
On Thursday, May 7th, Senator Charles Schumer (D-NY) said that he and Speaker Nancy Pelosi (D-CA) were going to unveil a stimulus package that was “Rooseveltian” in size – a callback to the programs, collectively known as The New Deal, ushered into existence by President Franklin D. Roosevelt.
Largely credited with the getting the United States out of the Great Depression, many of these programs exist even today.
Today, May 12th, Speaker Pelosi proposed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions Act, or the HEROES Act.
HEROES Act Under Consideration
For the purposes of this article, we’re going to focus strictly on what the new stimulus check would look like. The HEROES Act would create a new recovery rebate similar to the one in the CARES Act, albeit a slightly larger check for those with dependents:
- $1,200 ($2,400 in the case of a joint return) plus
- $1,200 per dependent (with a maximum of 3)
The income limits of this stimulus check match those of the first one:
- Single filers: $75,000
- Joint filers: $150,000
- Head of Household filers: $112,500
Your stimulus check would be reduced by 5% of the amount above the lower limit. An individual with no children who earns $99,000 or more would not receive a check.
There have been a lot of other proposals by other legislators that would’ve included monthly checks but this one is a one time payment, similar to the CARES Act.
The mechanism for determining the payment and executing the payment matches that of the CARES Act. if you recall, the amount of your stimulus is determined by your 2019 tax return. If you didn’t file a 2019 yet, or didn’t have to, the bill would use your 2018 tax return information.
If you didn’t file either, but receive benefits from Social Security, the Railroad Retirement Board, or Veterans Affairs; the bill would use that information instead.
It’s unclear whether the IRS would use previously submitted information, such as to the Non-Filer’s portal, to determine how they would send out payments or if you would have to enter it again.
CARES Act Fixes
The bill also amends the CARES Act to fix certain oversights in the first bill – under the section titled “2020 recovery rebate improvements.” For example, if someone had a joint return in one spouse’s tax identification number (TIN) was not included, it stopped the check from going out.
The HEROES Act adjusts the language of the bill to reduce the benefit designed for just that person to $0. If the HEROES Act passes, joint filers with just one TIN would receive a $1,200 check from the CARES Act.
The HEROES Act would also:
- Change “qualifying children” to “dependents” for stimulus check amount calculations. Each dependent must have a TIN or their benefit will be reduced to $0.
- Includes provisions to protect the rebates from seizure. It states that the payment “shall not be subject to transfer, assignment, execution, levy, attachment, garnishment, or other legal process, or the operation of any bankruptcy or insolvency law, to the same extent as payments described in section 207 of the Social Security Act (42 U.S.C. 407).” It gives your stimulus check the same protections as Social Security benefits.
If the HEROES Act passes in this form, it would increase the number of individuals eligible for a stimulus check. It would also increase the amounts of others, which would subsequently be disbursed.
The stimulus check is just a small part of the bill. Next, I want to highly a few other sections that have been ideas from other bills or floated by other legislators:
Temporary Moratorium on Evictions
In a section titled “Protecting Renters and Homeowners from Evictions and Foreclosures,” the HEROES Act would put a moratorium on eviction filings for 12 months.
The protection would extend to repossessions as well, to cover any recreational or motor vehicles used as a dwelling.
Pandemic Premium Pay for Essential Workers
A section titled Pandemic Premium Pay for Essential Workers is an idea first suggested by Senator Mitt Romney – to increase the pay of essential workers up to $12 an hour for the next three months.
The HEROES Act does him $1 better by increasing the premium pay to $13 an hour performed by an essential worker dating back to January 27th to 60 days after the COVID-19 Public Health Emergency.
The bill has limits for highly-compensated and non-highly-compensated employees but this would be a big boon for many workers who have been out on the front lines during the pandemic.
Forgiving Student Loan Debt
The CARES Act put federal loans into forbearance until the fall but the HEROES Act would extend that forbearance to private student loans until September 2021. It would also, no later than 90 days after the end of September 2021, forgive up to $10,000 of student loan debt.
The bill has several of these types of provisions to inject more stimulus into the economy and provide more support for those who need it.
To be clear, at this point this is just a proposal and a place to begin discussions.
While it’s not as massive as a monthly $2,000 payment, it’s likely more politically palatable but the bill contains a lot of other aspects that Republicans may not be amenable to. We will have to follow along to see how likely it is this bill passes in its current form.