Second stimulus checks: Trump executive orders leave $1,200 payments in limbo

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WASHINGTON (NEXSTAR) — With President Donald Trump bypassing the nation’s lawmakers and issuing executive orders to defer payroll taxes and replace an expired unemployment benefit, many are wondering where that leaves a second round of direct payments to Americans.

The answer, for now, is nowhere.

Though Trump had previously said additional stimulus checks would be coming, direct payments were not mentioned in his four executive orders issued Saturday. That leaves that portion of coronavirus aid proposals in limbo.

Trump cast his orders as necessary given that lawmakers have been unable to reach an agreement to plunge more money into the stumbling economy. Both sides were on the same page that an additional round of $1,200 checks was a good idea. However, they couldn’t agree on much else. With negotiations at a roadblock, Trump made the decision to bypass Congress. The decision may be met with legal challenges.

In the orders, Trump moved to continue paying a supplemental federal unemployment benefit for millions of Americans out of work during the outbreak. However, his order called for up to $400 payments each week, one-third less than the $600 people had been receiving. How many people would receive the benefit and how long it might take to arrive were open questions.

The previous unemployment benefit, which expired on Aug. 1, was fully funded by Washington, but Trump is asking states to now cover 25%. He is seeking to set aside $44 billion in previously approved disaster aid to help states, but said it would be up to states to determine how much, if any of it, to fund, so the benefits could be smaller still.

Many states already faced budget shortfalls due to the coronavirus pandemic and would have difficulty assuming the new obligation.

Trump hopes the four executive orders he signed will signal to Americans that he is acting where Congress will not to address economic fallout from the COVID-19 pandemic, which has upended nearly all aspects of American life. It’s unclear what the economic impact of his actions will be, and his orders do not address several areas that have been part of the congressional negotiations, including funding for schools and state and local governments.

House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer dismissed Trump’s actions as “meager” in the face of economic and health crises facing Americans. Democrats initially sought a $3.4 trillion package, but said they lowered their ask in talks to $2 trillion. Republicans had proposed a $1 trillion plan.

Trump’s orders also call for a deferral of payroll tax and federal student loan payments and efforts to halt evictions. The evictions executive order directs the Treasury and Housing and Urban Development departments to identify funds to provide financial assistance to those struggling to pay their monthly rent.

In addition to stimulus checks, other remaining issues for lawmakers include money for schools trying to reopen, a cash infusion for the struggling Postal Service and money to help states hold elections in November.

More money for dependents

The GOP aid plan called for checks up to $1,200 for most taxpayers plus an additional $500 for any dependent. The word “any” is the change that could result in additional dollars.

According to Yahoo Finance, parents of older high schoolers and college students claimed as dependents would get the bonus. This also includes anyone taking care of elderly relatives who are also claimed as dependents.

In the first round of stimulus payments, only parents of dependents under 17 received the additional $500.

“We also include, in the additional $500 for each dependent, some people that we didn’t intend to leave out last time, but we did,” Republican Sen. Chuck Grassley of Iowa said of the plan. “So regardless of age, some of these dependents will now be helped.”

A Democratic plan approved in the House back in May proposed a similar structure for dependents but with the amount being $1,200 instead of $500.

President Trump wanted larger checks?

During a recent visit to West Texas, President Trump hinted that a second round of stimulus checks could exceed the $1,200 payment amount issued in the first COVID-19 stimulus package.

When asked if $1,200 was enough, Trump said, “We’re going to see it may go higher than that, actually.”

“I’d like to see it be very high because I love the people, I want the people to get it, you know, the economy is going to come back,” Trump continued. “We saved millions of lives but now we’re bringing (the economy) back … we gotta take care of the people in the meantime.”

How much money will I get?

Outside of the dependent payment, here’s how the proposed payment up to $1,200 broke down, according to CNBC:

  • Individuals earning a gross adjusted income of up to $75,000 per year in 2019 will receive a $1,200 payment.
  • Couples earning a gross adjusted income of up to $150,000 per year in 2019 will receive a $2,400 payment.
  • The checks will be reduced by $5 for every $100 in income, phasing out completely at $99,000 for individuals and $198,000 for couples.
  • Individuals with no income and individuals who rely on benefits such as Social Security are eligible for the full $1,200 payment

The Associated Press contributed to this report.

Copyright 2020 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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