Republicans reportedly want to shrink the 2nd round of $1,200 stimulus checks for low-income Americans and limit who gets government cash

Congressional Republicans are weighing whether to narrow a second stimulus check to low-income Americans, though they haven't settled on an income threshold.

  • McConnell opened the door for another stimulus check on Monday, singling out people earning under $40,000 a year as those among the hardest hit.
  • Around 20 million people could be left out of a second direct payment if Republicans move ahead with a $40,000 income cap, according to an estimate from economist Ernie Tedeschi.
  • Visit Business Insider's homepage for more stories .

Republicans are reportedly weighing whether to narrow a second round of stimulus checks to low-income Americans that are in dire financial straits as a result of the pandemic and limit who can get extra government cash.

The Washington Post first reported on Thursday that congressional Republicans are seeking to scale back the amount of government spending in the next economic relief package set to be debated later this month. As a result, conservatives are seeking to lower the income threshold for people getting a full $1,200 stimulus check.

Back in March, Congress authorized a wave of direct payments for individuals earning up to $75,000 a year, and the size of the check gradually diminished until it phased out entirely for those making above $99,000 annually. Nearly 160 million so-called "Economic Impact Payments" have been sent so far.

The Post cited four officials familiar with internal deliberations who said talks were fluid and no income cap has been established yet. However, Republican Sen. Majority Leader Mitch McConnell opened the door on Monday for another stimulus check for lower-income Americans, particularly those earning under $40,000 a year.

"I think the people who have been hit the hardest are people who make about $40,000 a year or less," McConnell said during a public appearance in Kentucky. "Many of them work in the hospitality industry."

McConnell's office did not immediately respond to a request for comment.

Limiting the pool of eligible recipients to individuals earning $40,000 and less could leave out 20 million middle-class Americans who benefited from the initial wave of payments, according to an estimate from Ernie Tedeschi, head of fiscal analysis at Evercore ISI and a former economist in the Obama administration.

President Donald Trump supports a second round of direct payments, but Republicans on Capitol Hill are more split on the proposal. Some oppose it and say it's not needed to boost the economy. But others like Sen. Thom Tillis signaled last week they were open to targeting it toward financially struggling people.

Republicans and Democrats are already clashing on what should be included in another stimulus package, as well as its size. The GOP is seeking to keep it below $1 trillion, a step likely to spark heated debate with Democrats seeking a larger spending initiative.

"I think we want to make sure that people that are still unemployed or hurting are protected but at the same time, we want to take into consideration the fact the economy is bouncing back and want to try to contain the amount of spending," Marc Short, Vice President Mike Pence's chief of staff, told Bloomberg Radio on Tuesday.

Democrats passed a $3 trillion spending bill in May that would include another round of $1,200 direct payments, extend aid to states and healthcare systems, and keep the $600 federal supplement in unemployment benefits in place until January of next year.

The Democratic plan would increase the payment for dependents to $1,200 from $500 per child. Some progressive Democrats, such as Sen. Bernie Sanders, have called for a $2,000 recurring monthly check during the pandemic.

On Tuesday, 156 economists published a letter calling for recurring direct payments as well, though it didn't contain specific figures related to frequency or cash amount.

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