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Update July 27: Senate GOP releases the new “HEALS Act” proposal, includes $1,200 Stimulus Checks, cuts to Unemployment, and more
On Monday, the Senate Republicans revealed their new proposal, titled the “HEALS Act.” As expected, it included $1,200 stimulus checks, with the same qualifications as last time.
It also included an extension of the weekly Pandemic Unemployment Assistance, but instead of $600 per week, it is cut down to $200 per week. The current $600/week ends on Friday, July 31.
This proposal all but finalizes the $1,200 Stimulus Check round 2, which many have been expecting, but with so many opinion floating around the internet, and quotes from Congress contradicting each other, it’s nice to see something official.
Deadline: Congress has until August 7th to reach an agreement on this proposal and pass both the House and Senate before their nearly month-long recess. If passed in time, checks could go out as early as August, especially since the Treasury already has the infrastructure and operation in place from the first round of checks.
Bottom Line: I’ll have a more complete breakdown of this bill soon, but for now, Americans can expect a second round of checks identical to the first round, but will lose a LOT MORE in the reduced unemployment benefits.
Update July 23rd: Mnuchin confirms that the GOP Senate will propose a bill with the EXACT SAME provisions as the CARES Act.
It is now confirmed. The GOP Senate proposal coming this week will include a Second Stimulus Check, under the same guidance as the first round of stimulus checks.
After debating all week, the Republicans AND the White House both are on board for a second round of payments, and the proposal is expected in the next few days.
“We’re talking about the same provision as last time, so our proposal is the exact same proposal as last time,” Mnuchin told reporters.
This is good news to the millions who are set to lose the extra $600/week of extra unemployment, and those still struggling during this pandemic.
“We’ll lay out the specifics. I’m going to introduce a bill in the next few days that is a starting place that enjoys fairly significant support among Republican senators, probably not everyone. And, at that point, we’ll be more specific about how to allocate. But we do envision direct checks again,” he said on Tuesday.
Bottom Line: So for all of you who have been following this post, or watching the daily updates from your favorite Youtuber, the wait is finally over, and we WILL have second stimulus checks!
Update July 19th: McConnell to introduce new stimulus legislation tomorrow (7/20)
Mitch McConnell is set to introduce new legislation on July 20 when Congress is back in session. This is to start rapid negotiations between parties to pass a 5th (and FINAL) Coronavirus Relief Bill.
A “direct payment” is top of mind for many, including McConnell. Another topic of discussion will be the $2,400 per month Unemployment Bonus that many have been getting, and is set to expire July 31.
My prediction: In reality, the July 31 deadline for the unemployment assistance is more pressing than anything, and will probably be the biggest point of contention. I expect it to be extended for at least another 3 months, but most likely at a rate much lower than $600 per week (probably closer to $300 per week).
I do expect a second round of stimulus checks as well, but with a more limited scope on who will receive them (see McConnell comments below on income limits). This is an idea also backed by White House Economic Advisor Larry Kudlow
Bottom Line: Congress is under HUGE pressure to get something passed in the next 2 weeks (before they go back on recess August 7th). If they don’t, it’s going to get ugly!
Update July 9th: McConnell says families making “less that $40,000” need the most help
At a recent event in Kentucky, Senate Majority Leader Mitch McConnell was asked if the next stimulus package would include direct payments (stimulus checks).
He said this:
“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. The hospitality industry, as all of you know, just got decimated…..hotels, restaurants….and so that could well be a part of it.”
McConnell has been opposed to talks of a second stimulus check, and was firmly in the “wait and see” camp for the past few months when asked about more stimulus money.
It sounds like he (and other Republicans) are finally coming around to the idea of a second round of Stimulus Checks. It also seems like they are trying to keep the cost of this next relief bill down by specifically targeting those who make less than $40,000 per year.
My prediction: They will introduce a bill in late July (after Congressional recess) that has Stimulus Checks for a smaller subset of Americans who make much less per year ($40k for individuals, probably $80k for married). This will be a starting point, and will be negotiated with the Democratic party to push a bill through in the coming months that has stimulus checks included.
Bottom Line: There is MORE favor of second stimulus checks than ever before, so I think it’s becoming VERY likely this will happen.
Update June 22: Trump says “YES” to Second Stimulus Package
President Trump was interviewed by reporter Joe St. George and was asked point-blank about a second round of stimulus checks:
Joe: “…are you going to get them a second stimulus check?”
Trump: “yeah, we are, we are.”, “…we will be doing another stimulus package, it will be very good, it will be very generous…”
Joe: “How much? how much?”
Trump: “You’ll find out about it. You’ll find out.”
Joe: “When you gonna do it? When you gonna announce it?”
Trump: “…I think it’s gonna be in the next couple of weeks probably.”
No further details have been given by the White House or Congress, but it seem that is Trump is pushing for it, we should be seeing some more details in the next few weeks.
I don’t anticipate this happening before Congress is back in session after Jul 17th. But let’s hope it happens quickly, because the extra $600/week unemployment BONUS is ending on July 31 as well, so it’s getting urgent.
Update May 27: The Senate has the HEROES Act, and is reviewing it. They will most likely want changes, and will NOT be voting on it before June. Republicans are on record saying they want to WAIT to see how the CARES Act affects the economy, and they want a stimulus package that helps get people back to work.
Update May 15: The HEROES Act has passed the House! But it’s doubtful the Senate will pass it, and Trump has promised to veto it if it crosses his desk. More details on the HEROES Act in this post.
Update May 13: Nancy Pelosi delivers official bill, nicknamed the HEROES Act. It’s a $3 Trillion proposal that’s over 1,800 pages long! More importantly, it has a provision for a second stimulus check for individuals.
It would use the same phaseout amounts as the previous checks, and would also be $1,200 per person, but would include $1,200 per dependent (up to 3), so a family of 5 could receive up to $6,000 total!
Best Savings Account For Your Stimulus Check?
- Update May 11: It seems that many senators are in a “wait and see” holding pattern as they want to see if the first Stimulus payments and unemployment are helping.
- “Before we take up any new bill, let’s have hearings. Let’s have the information and data come back to us and see if there’s a need. As states open up, there will be a difference of what’s needed today than is needed tomorrow,” House Minority Leader Kevin McCarthy told USA TODAY.
- Update May 9: Senators Bernie Sanders (D-VT), Kamala Harris (D-CA), and Ed Markey (D-Mass.) proposed the “Monthly Economic Crisis Support Act” that would help give Americans $2,000 per month each, as well as $2,000 per month per qualifying child (up to 3 children). These monthly payments would extend until 90 days after the COVID-19 State of Emergency ends.
- Update May 6: Senator Mitt Romney (R-UT) proposed the “Patriot Pay” plan that would help give “essential workers” up to a $12/hour raise from May through July 2020.
- “Patriot Pay is a way for us to reward our essential workers as they continue to keep Americans safe, healthy, and fed.” Romney said.
- Update May 1: Rep. Matt Gaetz (R-FL) said in a Facebook Live event that Congress is working on a CARES Act 2.0, which *should* include stimulus checks to Americans.
- “I think people can expect another round of direct payments to individuals,” Gaetz said.
- Update April 29: White House economic Kevin Hassett adviser affirms that Congress and Trump are in talks about a possible “phase four” stimulus package.
- “I expect it is very likely there will be a phase four deal and we’re going to be speaking with the president throughout the week about what he thinks should be in there…”1
Trump himself commented recently on sending Americans more money, saying:
“I like the idea of payroll tax cuts, I have liked that from the beginning, I think frankly it’s simple, it’s not the big distribution.”1
Previous Second Stimulus Check Proposals
Here are the previous 5 proposals for the second round of stimulus payments:
- 1 – Bernie Sanders proposes to pay Americans up to $10,000 per month until 90 days after state of emergency over
- 2 – $2,000 a month stimulus payments for up to 6 months or until unemployment reaches “pre-COVID levels”
- 3 – Rent and Mortgage payment cancellation for up to a year
- 4 – Payroll Tax Rebate to help cover up to 80% of payroll costs
- 5 – Patriot Pay to give essential workers up to a $12/hour bonus
What Are The Stimulus Check Details?
More than a few people (millions, actually) have had issues getting their payment, and many more have been left in the dark about where their stimulus check is.
There are a few tools to track your payment, but issues still abound.
And even though many people were paid, it seems President Trump and Congress are in agreement that the first round of stimulus payments may not be enough to help people get through right now.
There are lots of rumors floating around about a possible second stimulus check, so I wanted to go over the details of what is ACTUALLY being proposed and what to expect.
COVID-19 Financial Relief Summary
Let’s recap the financial relief packages Congress has approved so far:
Financial Relief Package #1 – This original package (about $8 billion) was aimed at getting funding to help pay for more testing and expenses related to the COVID-19 outbreak
Financial Relief Package #2 – The Families First Coronavirus Response Act was the first MAJOR financial relief package to help people get paid sick leave, unemployment benefits, and free medical testing for COVID-19 related issues. It helped people feel better about NOT going to work sick, to help slow the spread of the virus. (More details in my COVID-19 Financial Resource Hub)
Financial Relief Package #3 – The CARES Act was the largest financial relief package (over $2 Trillion!), and included small business relief (loans and grants), and the first round of Stimulus Checks for American Taxpayers. Stimulus Payments have started going out, but the small business loans have already run out!
First Round Of Stimulus Checks Summary
The first round of stimulus payments will continue going out throughout the summer.
Here’s are the qualifications to see if you will be receiving a stimulus payment (based on 2018 or 2019 tax return info):
- Single Taxpayers with an AGI $75,000 or under = $1,200
- Head of Household Taxpayers with an AGI $112,500 or under = $1,200
- Married Filing Joint Taxpayers with an AGI $150,000 or under – $2,400
- Taxpayers with qualifying children age 16 or under = $500 per child
The payments starts to reduce by $5 for every $100 more in AGI above the above threshold amounts.
- Single Taxpayers with an AGI $99,000 or over get no payment
- Head of Household Taxpayers with an AGI $136,500 or over get no payment
- Married Filing Joint Taxpayers with an AGI $198,000 or over get no payment
- Taxpayers with qualifying children age 16 or under still get $500 per child, but as their AGI goes above the phaseout, it will reduce their child payment by $5 for every $100 more in AGI
We were under the limits, and received our $3,900 payment (Married, (3) kids 16 and under) on April 15th.
We promptly put it into our CIT Bank Money Market savings account to beef up our emergency fund.
Many other have reported NOT getting paid yet, even though they expected direct deposit. There are ways to track your payment and possibly speed up the process, but many will be waiting for a while.
More details on the first round of stimulus checks can be found in our complete Stimulus Check 2020 Guide.
Is There A Second Round Of Stimulus Checks On The Way?
Ever since the payments were approved, many in Congress, and even the President, have expressed that the $1,200 check may not be enough.
USA Today reported that a second round of payments is on the discussion table, and now there is a bill on the table for possible “monthly payments” during this health and economic crisis.
Related: Planning on shopping online with your check? Earn cash back at the same time with Rakuten!
Monthly Economic Crisis Support Act
Senators Bernie Sanders (D-VT), Kamala Harris (D-CA), and Ed Markey (D-Mass.) proposed the “Monthly Economic Crisis Support Act” that would help give Americans $2,000 per month each, as well as $2,000 per month per qualifying child (up to 3 children). These monthly payments would extend until 90 days after the COVID-19 State of Emergency ends.
Here are the details:
- Americans with an AGI less than $100,000 annually would receive $2,000 per month.
- Head of Household filers with an AGI less than $150,000 annually would receive $2,000 per month.
- Married couples with an AGI less than $200,000 annually would receive $4,000 per month.
- Qualifying families with children (16 and under, similar to round 1) would receive an additional $2,000 per child, per month(maximum of three children).
- Yes, college students and adult dependents with disabilities would qualify! They would receive the $2,000 monthly payment, or their parent/guardian would get the $2,000 dependent credit per month.
This means that married filing joint families with 3 children (hey! that’s me!), would receive $10,000 per month!
The payments would continue every month, up to 90 days “public health emergency” has ended. It would also be retroactive to March 2020, meaning the payments would pay Americans starting in March.
For example; If the public health emergency ends on June 30th, the monthly payments would extend until September 30th.
Will The Monthly Economic Crisis Support Act Pass?
Long answer: This bill only provisions for an additional $250 Billion in funding, but according to this Forbes article, would cost at minimum of $300 Billion PER MONTH, not accounting for children, or those on social security.
Due to the cost of this bill, and the fact that Trump favors a payroll tax cut1 instead, I’m going with “no” on this one.
Emergency Money For The People Act
House Representatives Tim Ryan (D-OH) and Ro Khanna (D-CA) introduced a bill called the Emergency Money for the People Act, and it includes provisions for a second round of stimulus payments. These payments would occur EVERY MONTH, for “up to 6 months”.
Here are the details:
- Americans age 16 and older with an AGI less than $130,000 annually would receive $2,000 a month.
- Married couples with an AGI less than $260,000 annually would receive $4,000 per month.
- Qualifying families with children (16 and under, similar to round 1) would receive an additional $500 per child (maximum of three children).
- Yes, college students and adult dependents with disabilities would qualify! They would receive the $2,000 monthly payment, and their parent/guardian would get the $500 child credit per month.
- There are no earnings or employment requirements to get the monthly stimulus payment.
- If you earned too much or otherwise don’t qualify based on 2018/2019 tax returns, you may still qualify if your income has been reduced in 2020. You would need to submit 2 months of consecutive paychecks to prove your qualification.
The “up to 6 months” number does have some specific qualifications, and is tied to employment numbers. Here’s what is proposed:
The payments would continue every month, for up to 6 months or “until employment returns to pre-COVID-19 levels.” This means the employment for ages 16 or older would need to exceed 60%.
So the payments will only extend as long as employment is lower than it was before the outbreak.
Will The Emergency Money For The People Act Actually Pass?
As is with most legislation right now, it most likely will NOT pass in its current form. It is currently proposed in the Democratic-controlled House, and even if it passes there, the Senate is Republican majority, and will most likely ask for concessions and adjustments to the bill before it is in its final form.
The House is definitely pushing for monthly payments right now to help people continue to pay their bills.
When Would The Second Stimulus Checks Go Out?
As of right now, the proposal wouldn’t even be reviewed until Congress is back in session on May 4th. It would them be debated and adjusted, probably for week, before coming into to anything resembling a final bill.
There is no way to tell WHEN these payments would go out, but if past history is any indication, it would still take at LEAST 3 weeks from when the bill passes to get the first round of payments out to people.
If the bill passed in June, payments would come in July.
This is all speculation at this point, but I will be following the story as it unfolds and updated this section accordingly.
What Should You Do With Your Stimulus Check?
Here are a few things I recommend doing with your stimulus money:
GET ON A WRITTEN BUDGET
Yes, this stimulus money is much needed during this time of crisis, but long-term, it doesn’t mean a thing unless you have a plan for your money.
p.s. if you’re ready to make a complete money plan, our 40-page Budget Binder is only $9 until this health crisis slows down.
PAY FOR IMMEDIATE NEEDS
The most important needs right now are food, shelter and utilities. You may also need a few household items to help through the current lockdowns. Take care of yourself and your family first. And remember, there are options available for financial help on my COVID-19 Financial Resources page.
ADD TO YOUR EMERGENCY FUND
If you can pay for your immediate needs, but don’t have 3 to 6 months of expenses saved in an Emergency Fund, these funds can be added to help you weather the current health crisis.
We immediately transferred our first stimulus check to our CIT Bank Money Market account. Currently paying 1.65% interest!
PAY OFF DEBT
If you are financially secure and have taken care of your immediate priorities, you can now look at paying down some of your debt. I recommend using the Debt Snowball Method. You may also consider paying down your Federal Student Loans, as they are currently suspending interest, and your payments would all go toward principal.
If you still have income and an emergency fund, you may consider putting these extra funds into something like a Roth IRA. You can read more details on how I recommend investing in my Personal Finance 101 post.
If you are unsure what you should be doing with your money right now, I also recommend checking out my 7 Steps To Creating An Emergency Budget which can help your dollars stretch further during this health and financial crisis.
If you are in a good financial position, you may consider donating these funds to those in need. Some have suggested buying gifts cards to local businesses to use later, which gives them much-needed revenue to stay afloat.
There are also many local community relief funds opening up everywhere you can give to. Or simply help those around you who are struggling to put food on the table or pay their bills.
Find a cause, and give, it will have a PROFOUND IMPACT to those in need around you.
More Second Stimulus Proposals
Mitt Romney Patriot Pay (Up To $12/Hour Bonus)
Senator Mitt Romney proposed a bonus to essential employees who are still working, and it could give them up to $12/hour of “hazard pay” as a bonus.
Here’s a quick overview of the details:
- “For essential employees that make less than $50,000 annualized, employers would receive a 75% refundable payroll tax credit for a bonus up to $12 an hour.
- For essential employees making over $50,000 annualized, the tax credit phases out by $24 for every additional $500 in income until annualized incomes hit $90,000.
- The maximum tax credit is $1,440 per month, per employee, meaning a full-time worker would receive up to a $1,920 monthly bonus.”
Personally, I do NOT think this will pass, as it only covers 75% of the employer costs for the bonus, and employers would have to elect to opt in to this bonus. Essentially businesses would be LOSING MONEY to make this a reality.
More details on this proposal found on my full article on Patriot Pay
The Rent And Mortgage Cancellation Act
The second proposal on the table for Financial Relief is the Rent & Mortgage Cancellation Act, introduced by Representative Ilyan Omar (D-MN).
Here’s what Rep. Omar stated is the reason behind the bill:
“The coronavirus crisis is more than just a public health crisis—it’s an economic crisis. Minnesotans are losing jobs, getting their hours reduced, and struggling just to put food on the table. We must take major action to protect the health and economic security of the most vulnerable, including the millions of Americans currently at risk of housing instability and homelessness,” said Rep. Omar. “Congress has a responsibility to step in to stabilize both local communities and the housing market during this time of uncertainty and crisis. In 2008, we bailed out Wall Street. This time, it’s time to bail out the American people who are suffering.”
This is aimed at helping both renters and landlords alike who are struggling to make their obligated payments.
This bill would effectively “pause” all rent and mortgage payments until the coronavirus pandemic is over.
Here are the details:
- Rent payment and mortgage payment forgiveness on your primary residence
- No debt accumulation of backed payments for renters or debt for mortgage owners
- No negative reporting of rental history for renters or credit for mortgage owners
- Applies to all existing mortgage and rental agreements.
- Applies to all renters and primary residence mortgages, regardless of income or payment size
- Borrowers with primary mortgage AND rental property can only elect relief on one property
- Relief would be retroactive starting on March 13, 2020, and would last one year
- Renters and mortgages owners would be reimbursed for payments made April 2020
Does The Rent & Mortgages Cancellation Act Help Landlords and Banks?
Ok, so rent and mortgages are cancelled, but what about landlords and banks who are on the other end of the contracts? How do they get paid?
The bill proposes a relief fund, manages by the Department of Housing and Urban Development (HUD), to help landlords and lenders get reimbursed for lost rent and mortgage payments.
To receive these funds, there would be a guideline to follow a set of fair rent and lending practices for a period of 5 years.
Will The Rent And Mortgages Cancellation Act Pass?
As of right now, this is simply a proposed bill in the House.
Similar to the second stimulus check proposal, this will need to be reviewed once Congress is back in session on May 4th. And it may not pass in its current form.
Stay tuned for updates as these bills are reviewed and updated.
Until we know the outcome of these bills, there is a TON of financial relief available, including expanded unemployment benefits, paid sick leave, mortgage and student loan relief, and more. I’ve put together everything in my COVID-19 Financial Relief page.
Getting America Back To Work Act
A third proposal to help stimulate the economy was proposed recently by Senator Josh Hawley (R-MO) to help businesses re-hire employees, called the Getting America Back To Work Act.
The idea is to help companies rehire by providing “a refundable payroll tax rebate covering eighty percent of employer payroll costs for firms of all sizes affected by this crisis, applicable up to median wages.”
It also proposes a rehiring bonus for firms that rehire employees quickly (by May 2020) that were laid off due to Coronavirus related business issues . The idea would be to incentivize businesses to bring their employees back quickly.
This would use the same advance mechanism that the Families First Act did for Paid Sick Leave, and give businesses an advance, meaning businesses could get access to the money immediately and start rehiring employees right away
Essentially this proposal would try to help get workers back into their jobs, and help businesses keep their doors open.
This could help the 26+ Million workers who are currently on unemployment become re-employed, and help get the economy back on track.
This proposal (similar to the two above) will still need to be reviewed, debated, and finalized in both the House and the Senate before becoming law.
But a “Payroll Tax Credit” has been done before (most recently under Obama in 2009), so the precedent is already there.
The final details are still to come.
Make Your Own Luck
While we await government debates and voting on these regulations, you can give yourself a raise right now!
Grab a copy of my Free Budget Template and take back control of your money!