Most Americans to qualify for stimulus payments, as Democrats reject calls to limit eligibility

Those who earned up to $75,000 in annual income would be eligible for $1,400 stimulus payments in proposed plan, in a rejection of calls for more 'targeted' cheques

House Democrats released a draft of a sweeping coronavirus relief package proposed by Joe Biden that would send $1,400 direct payments to most Americans and extend $400 weekly federal unemployment benefits through August, among other measures critical to the new administration’s efforts to combat the Covid-19 pandemic.

Drafts from the House Ways and Means Committee on Monday hew closely to the president’s $1.9 trillion proposal, as lawmakers continue to debate the contours of the legislation.

Americans who have earned up to $75,000 a year would qualify for the full $1,400 direct payment – a proposal that rejects efforts among some lawmakers for a more “targeted” cheque to lower-income Americans, and signalling Democrats’ willingness to move forward with a promised “bold” package without Republican support.

Under the proposed plan, payments would begin to phase out for higher-income Americans. Individuals who earned $100,000 a year and couples who earned $200,000 would not receive any payments.

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Progressive lawmakers have argued that lowering the threshold undermines the state of the public health crisis and its economic fallout, while “targeting” cheques to people who earned certain incomes based on their 2019 earnings would leave millions of newly unemployed people without an additional lifeline.

The draft from Ways and Means qualifies individuals with incomes up to $75,000 and married couples with incomes up to $150,000, based on either 2019 or 2020 tax filings.

Legislation would also expand the child tax credit, child-care assistance and tax credits for health insurance. Weekly federal unemployment benefits of $400 would extend through 29 August.

“Our nation is struggling, the virus is still not contained, and the American people are counting on Congress to meet this moment with bold, immediate action,” said committee chair US Rep Richard Neal.

The committee will consider the legislation on Wednesday.

Release of the proposal follows debate among White House officials and lawmakers over the size and scope of the payments, and whether to move ahead with a procedural move that would allow Democrats to bypass Republican support in the Senate.

Congress approved $1,200 payments to most Americans in March, followed by the passage of a $900 billion relief package in December that included $600 in direct payments, which then-president-elect Biden called a “down payment” towards $2,000 checks.

That month, he said those payments would “go out the door immediately to help people who are in real trouble" following his inauguration and the election of Democratic senators in a Georgia runoff race.

White House press secretary Jen Psaki told reporters on 3 February that with the approval of $1,400 payments, the president “would be delivering on the promise he made, and it's something that he is firmly sticking by.”

Those earlier payments were phased out for individuals who earned more than $75,000 and couples with combined income above $150,000, based on 2019 tax filings, before mass layoffs and surging unemployment in 2020.

Moderate Democrats have urged direct payments to be more “targeted” to lower-income Americans who earned $50,000 or less, based on 2019 tax filings, though the previous payments were also already targeted.

Following a meeting with the president last week, Senator Chris Coons told reporters that the cheques could “be modified in a way to ensure they’re targeted” following a White House meeting on the bill.

Treasury Secretary Janet Yellen told CNN on Sunday that "the exact details of how it should be targeted are to be determined, but struggling middle-class families need help, too."

The president told CBS in an interview that aired on Sunday that he remains "wide open" for negotiating the "threshold" for eligibility.

"There's a discussion right now about what that threshold will look like," Ms Psaki said on Monday. "A conclusion hasn't been finalised – that will be worked through Congress."

She said that families who earn "$275,000, $300,000 a year may not be the most in need of checks at this point in time."

"But whatever the threshold is, there will be a scale up," she said. "So his view is that a nurse, a teacher, or a firefighter who’s making $60,000, shouldn't be left without any support or relief either."

A group of Senate Republicans sought to counter the White House proposal with a much-smaller package that includes direct payments to individuals earning up to $40,000 and couples earning $80,000. The White House effectively rejected that plan.

Democrats are prepared to vote on the president’s American Rescue Plan without relying on Republican support through a filibuster-proof budget reconciliation process that requires a simple majority vote in the Senate, which Democrats control with a tie-breaking vote from Vice President Kamala Harris.

The contents of the package will be debated over the coming days and weeks.

President Biden has stressed that passage of his $1.9 trillion legislation is critical to his administration’s Covid-19 response, with extended federal unemployment benefits, funding for testing and vaccine infrastructure, and aid to schools and businesses to safely reopen faster.

Progressive Democrats have meanwhile continued to push the administration and lawmakers to consider monthly payments of $2,000, a proposal also supported by then-senator Harris last spring in a bill with Senator Bernie Sanders, who now chairs the Senate’s influential budget committee.

The House Education and Labor Committee also revealed its relief proposal on Monday, including $130 billion to help schools reopen safely during the pandemic, and a provision to gradually raise the federal minimum wage to $15 an hour over the next few years.