Mnuchin said Americans will start to see money ‘at the beginning of next week’
Treasury Secretary Steven Mnuchin said a fresh round of $600 stimulus checks could start going out to Americans as soon as next week, much faster than the first batch of payments that Congress approved earlier this year.
“People are going to see this money [at] the beginning of next week,” he said during an interview with CNBC Monday morning. “Much needed relief — and just in time for the holidays.”
Congress reached an agreement Sunday night on a $900 billion COVID relief deal, the first substantial federal aid package since lawmakers passed the CARES Act in March.
If passed by the House and Senate on Monday as expected, the legislation would extend aid to millions of Americans still reeling from the pandemic by providing a fresh round of stimulus checks, enhanced unemployment benefits and money for small businesses, as well as new funding for struggling industries, tax breaks, vaccine distribution and education and health care.
Lawmakers have not yet released the text of the legislation, but the stimulus checks are expected to follow the same eligibility formula as the first round –although they’ll be half the size of the $1,200 payments sent out earlier this year.
“The good news is this is a very, very fast way of getting money into the economy. Let me emphasize: People are going to see this money at the beginning of next week,” Mnuchin said, adding: “People go out and spend this money, and that helps small business and that helps getting more people back to work. So it’s very fast, it’s money that gets recirculated in the economy.”
American adults who earn less than $75,000 will receive the full $600 check, while couples who earn less than $150,000 will receive $1,200. The payments will be tapered for higher earners (5% of the amount by which their adjusted gross incomes exceeded the initial threshold) and phased out completely for individuals who earn more than $99,000 and couples who earn more than $198,000. Dependents under the age of 17 are also eligible for $600 payments.
This means that a family of four could receive as much as $2,400.
A vast majority of Americans will not be required to take any action in order to receive the money. The IRS will use their 2019 tax return if filed or their 2018 return as an alternative.
One lingering question had been how long it would take the Treasury Department to distribute the money once the deal was finalized.
It took the government about two weeks after the passage of the CARES Act to begin sending out checks via direct deposit; almost two weeks after the $2.2 trillion package passed, the Treasury Department disbursed more than 81 million payments worth more than $147 billion, all through electronic transfers to recipients’ bank accounts, according to the Government Accountability Office.
Congressional leaders on Monday unveiled a mammoth agreement on a roughly $2.4 trillion spending package that includes $900 billion in coronavirus relief after a half-year stalemate, securing another tranche of aid as a surge in COVID-19 infections threatens to further derail the nation’s faltering economy.
The House is expected to move swiftly to pass the bill on Monday night. Senate Majority Leader Mitch McConnell has pledged that lawmakers won’t leave the Capitol until the bill is passed, giving lawmakers and their offices just a few hours to review the massive 5,593-page bill.
If Congress fails to pass the bill or another temporary spending measure, a government shutdown would begin at midnight.
Senate leaders announced the 11th-hour deal Sunday evening after days of frenzied in-person negotiations on Capitol Hill between House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, House Minority Leader Kevin McCarthy and Senate Minority Leader Chuck Schumer.
The measure includes about $325 billion in small business relief, including $284 billion in forgivable loans for small businesses through the Paycheck Protection Program; an extension of boosted federal unemployment benefits at $300 a week through March 14, 2021, and a second $600 stimulus check for Americans earning less than $75,000. Treasury Secretary Steven Mnuchin said Monday he expects the federal government to begin issuing checks to millions of Americans as soon as next week.
The legislation addresses dozens of other issues: It includes $45 billion for transportation needs, $82 billion for schools, $20 billion for vaccine distribution, $13 billion for food assistance and $25 billion in rental assistance. It also extends an eviction moratorium from the Centers for Disease Control and Prevention that was poised to sunset at the end of the year through Jan. 31, 2021.
The legislation notably excludes two of the thorniest issues, which have plagued negotiations for months: funding for state and local governments and a liability shield for businesses against coronavirus-related lawsuits.
Both chambers are expected to approve the measure, which will keep the government funded for the remainder of the fiscal year, and send it to President Trump’s desk for his approval.
Democratic leaders, however, made it clear they viewed the package as a critical first step in boosting the economy’s recovery from the pandemic.
“We will need to do more,” Pelosi said Monday morning while speaking in the House floor, a sentiment echoed by President-elect Joe Biden. In a statement Sunday, Biden said that “this action in the lame-duck session is just the beginning. Our work is far from over.”
The division over another round of aid will likely tee up a battle in the new year with Republicans, who view the latest relief effort as sufficient. During an interview on CNBC, Mnuchin called the $900 billion bill “fabulous” and said it should see the U.S. through the other side of the recovery.
“The direct payments get into the economy very quickly,” Mnuchin said. “This is a large bill and it has a little bit of everything for everybody.”
The nation’s rebound has sputtered in recent weeks amid a surge in COVID-19 infections nationwide and new state and local government lockdown measures. Economists warned that without another aid package, the economy faced a so-called “double-dip” recession.
Job growth is slowing — the economy created just 245,000 new jobs in November, the smallest amount since the recovery began, according to the Labor Department — state and local governments are implementing new lockdown measures, more Americans are filing for unemployment aid each week, retail sales in November shrank for the first time in six months and key lifelines that propped up the economy in the early days of the pandemic are poised to expire at the end of the year.
That includes the Pandemic Unemployment Assistance, a program created to provide jobless benefits to gig workers and others typically not eligible for benefits, and the Pandemic Emergency Unemployment Compensation, which extends state unemployment benefits an extra 13 weeks.
The $900 billion compromise bill will extend those programs through the spring; had it not, some 12 million Americans could have been left without an income the day after Christmas, according to one estimate from the Century Foundation.
“The stimulus deal is a step in the right direction and significantly lowers the odds of a recession in the first quarter,” said Ryan Detrick, chief market strategist for LPL Financial. “Still, massive shutdowns in Europe are a harsh reminder we aren’t out of the woods yet.”
The $900 billion coronavirus relief bill brings the total amount of government spending in response to the pandemic to more than $3.3 trillion, a staggering amount that highlights the unprecedented shutdown of the nation’s economy earlier this year and the subsequent fallout.
Congress has not passed substantial relief measures since March, when it signed the $2.2 trillion CARES Act into law. That bill expanded unemployment benefits by $600 a week, sent a one-time cash payment of up to $1,200 to Americans earning less than $99,000 and launched the Paycheck Protection Program.
Economists credited the program with staving off the worst economic downturn in U.S history, but the expiration of several key lifelines in the program at the end of the summer coincided with a spike in cases.
Federal Reserve Chairman Jerome Powell has been urging Congress to pass another relief bill for months, warning of a bleak winter without new safety nets in place.
“It would be very helpful and very important that there be additional fiscal support for the economy, really to get us through the winter,” Powell said at the beginning of December. “I think we made a lot of progress faster than we expected, and now we have a big spike in COVID cases, and it may weigh on economic activity. People may pull back from activities they were being involved in or not engage in new activities.”