The Republican counterproposal on coronavirus relief unveiled Monday would potentially leave out 29 million middle- and upper-income earners who would qualify for stimulus payments under President Joe Biden’s plan.
The GOP plan would cut off cash for individuals earning more than $50,000 a year and couples earning more than $100,000, according to a fact sheet provided by the office of Maine Republican Sen. Susan Collins, who rolled out the proposal Sunday with nine other Republicans.
About 78% of families would qualify for a relief payment under the Republican proposal, while 95% would be eligible under Biden’s proposal, according to analysts at the The Penn Wharton Budget Model, who warned that the figures are preliminary since no formal legislative text is available yet.
Biden has asked Congress to send an additional $1,400 to Americans who are already getting $600 under the package approved by Congress in December, bringing the total to $2,000. People earning less than $75,000 and couples earning less than $150,000 would receive the full amount under Biden’s plan and payments would gradually phase out.
That would cover 99% of tax filers earning between $77,100 and $110,700, according to an analysis by the nonpartisan Tax Foundation – while just 8% of filers in that same bracket would qualify under the GOP plan.
The lower income threshold is meant to exclude people who have not been hurt financially by the pandemic and target those who need the money the most.
In the next income bracket, about 1% of tax filers earning between $110,700 and $157,000 would receive money from the Republican plan compared to 75% of them under the Biden plan, according to the Tax Foundation.
Smaller payments, too
The GOP relief plan would also provide smaller payments than Biden’s. It calls for $1,000 checks and would provide the full payment to individuals earning less than $40,000 a year and couples earning less than $80,000 – and gradually phase out altogether.
By contrast, Biden has called for $1,400 payments.
Both plans are designed to top off the $600 payments sent last month. Those phased out at $87,000 for single filers without children and $174,000 for those married without children. But another $1,400 payment would likely phase out slower, meaning that some higher income people would receive some money.
Biden also has proposed making some adult dependents eligible for the cash that were excluded from earlier rounds.
The Tax Foundation analysis didn’t take into account the effect of extending payments to more people, which could increase the number of filers receiving money.
Lower payments means a smaller total bill for taxpayers
Biden’s plan would cost $465 billion, according to the non-partisan Committee for a Responsible Federal Budget, while the Republicans say their measure would cost an estimated $220 billion.
Biden has said he is open to considering scaling down stimulus checks for families making more than $150,000 per year as well as some negotiation on other parts of his $1.9 trillion relief bill. But White House press secretary Jen Psaki indicated Monday that the Republican’s $600 billion proposal is insufficient.
Some economists agree that new direct payments should be more targeted, arguing that the money that has gone to individuals not financially hurt by the pandemic does little to help the economy.
The first round of payments that went out last year got money into people’s pockets extremely fast, partly because there weren’t a lot of eligibility requirements to slow down the delivery process. The trade off was that some of the money went to people who didn’t need it to pay their bills or make rent.