Democrats have not decided the final threshold levels for the checks to include in their plan despite having little time before they are expected to release legislation, according to one aide granted anonymity to discuss internal deliberations.
Centrist lawmakers such as Sen. Joe Manchin III (D-W.Va.) have called for targeting the payments to prevent them from going to high-earning Americans, arguing that families who have not lost their jobs do not need help. Senior Democrats have eyed a plan that would lower the income threshold determining eligibility for the checks from prior levels of $75,000 per individual to $50,000 per individual, while lowering the threshold for married couples from $150,000 to $100,000.
But that idea has been met with increasing resistance from other members of the party, including Senate Finance Chairman Ron Wyden (D-Ore.) and Senate Budget Chairman Bernie Sanders (I-Vt.), as well as House lawmakers in the Congressional Progressive Caucus. Wyden and Sanders have publicly criticized the proposals to lower the income thresholds to $50,000, saying middle class families have suffered pay cuts and other economic shocks and need relief, too. Sen. Jon Ossoff (D-Ga.), whose victory in January helped seal Democrats’ Senate majority, also opposes lowering the threshold on the checks, according to a spokeswoman.
The White House has said it is willing to compromise on the thresholds, with spokeswoman Jen Psaki repeatedly saying the administration is open to negotiations with Congress on the matter. On Sunday, Treasury Secretary Janet Yellen suggested the administration was not on board with Democrats’ plans for lower income thresholds.
“The exact details of how it should be targeted are to be determined, but struggling middle-class families need help, too,” Yellen said on CNN. Asked if she supports a phaseout higher than $50,000 per person, but not necessarily as high as $75,000, Yellen responded: “Yes, I — I think the details can be worked out. And the president is certainly willing to work with Congress to find a good structure for these payments.”
Biden gave similar remarks in an interview with CBS Evening News, saying he was “wide open” on the precise levels of the income threshold.
The dispute comes as House committees prepare to take up the legislation this week. It’s uncertain how the matter will get resolved.
White House senior economist Jared Bernstein floated a compromise during a press briefing on Friday, suggesting that lawmakers could design the benefit to diminish faster for higher earners. Under prior proposals, the size of the stimulus check diminished by 5 percent as incomes rose. Bernstein suggested that phase out of checks for those at upper incomes could be sped up, meaning those at higher income levels would get less.
“If you look at the distribution of who gets the checks … virtually none of it goes to the very top of the scale, and the vast majority goes to the middle and the bottom,” Bernstein said, citing research by the Institute for Taxation and Economic Policy, a left-leaning think tank. “What’s important to the president is that we don’t lose sight of people in the middle of the income scale who continue to struggle.”
The debate over the check thresholds represents one of many disputes Democrats may face as they try to pass Biden’s $1.9 trillion stimulus package through Congress. There is a wide ideological gulf between the party’s moderate and liberal wings, which will likely produce numerous policy fights — over the $15 an hour minimum wage; the scale of unemployment assistance; and the overall price-tag of the bill, among other things — on the way to passing their first major piece of legislation under Biden.
The split within the party appeared to intensify over the weekend. Manchin told WV News last week that he supported the next round of payments not going to individuals earning more than $50,000 or couples earning more than $100,00.
“An individual of $40,000 income or $50,000 income would receive it … And a family who is making $80,000 or $100,000, not to exceed $100,000, would receive it,” Manchin said. “Anything over that would not be eligible, because they are the people who really are hurting right now and need the help the most.”
Manchin has great influence over the issue because the Senate is split 50-50 between Republicans and Democrats, so Democrats need his vote as they aim to push the legislation forward without GOP support.
But on Twitter and on CNN this weekend, Sanders slammed Democrats for embracing a plan that would cut out individuals earning $52,000 a year in income. He also pointed out the potential political downside for the new Democratic administration of sending fewer payments than Trump had. Wyden has also said in a statement that families who had received the first two payments would expect a third.
“Unbelievable … working class people who got checks from Trump would not get them from Biden. Brilliant!,” Sanders said on Twitter.
While passing a budget resolution through Congress earlier this month that set the stage for approval of the broader relief bill, Sens. Susan Collins (R-Maine) and Manchin co-sponsored an amendment to exclude affluent families from the stimulus checks. The plan did not define an income amount, leaving that question open to interpretation. Sanders and all other Democrats voted for the proposal.
Under the lower threshold, about 71 percent of Americans would get the full benefits and another 17 percent would get the partial benefit, according to Kyle Pomerleau, a fellow at the American Enterprise Institute who specializes in tax policy. That compares to about 85 percent of families under the initial plan.