Second Stimulus Check Update: Senate Kills $2,000 Payments

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published 1 January 2021

Efforts to send eligible Americans a $2,000 second stimulus check are effectively dead…for now. Senate Majority Leader Mitch McConnell (R-Ky.) refused to allow a vote in the Senate on the House-passed CASH Act. That bill would have increased the second-round stimulus checks approved by the COVID-Related Tax Relief Act from $600 to $2,000. Senate Democrats made repeated requests this week for a vote, but each request was immediately blocked by McConnell or another Republican senator.

When Will Your Second Stimulus Check Arrive? It May Already Be On Its Way

Democrats delayed the inevitable for a few days by holding up a separate vote to override President Trump's veto of the defense spending bill. However, on New Year's Day, the override vote was held, which meant that the Democrats lost whatever leverage they had to force a vote on the CASH Act. The current session of Congress ends at noon on Sunday. At that point, the CASH Act and all other pending bills will expire.

The IRS has already started sending out the $600 second stimulus checks authorized by the recently enacted COVID relief law. If a deal to increase payments to $2,000 had been reached, the tax agency said it would have sent another payment for the additional amount to anyone who already received a $600 check. That, however, won't be necessary now absent some unexpected change of circumstances before Sunday.

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For a while, it appeared as if there might be enough momentum behind the $2,000 second stimulus check effort to get it across the finish line. Right after the COVID relief bill authorizing $600 checks was passed by Congress, President Trump reignited the push for $2,000 payments by threatening to withhold his signature if the $600 second stimulus checks weren't increased. Then, after the president signed the bill, the Democrat-controlled House of Representatives passed the CASH Act. In addition to boosting the already authorized $600 second stimulus checks up to $2,000 per eligible person, it would have increased the additional $600 payment for children 16 years of age or younger to $2,000 and allow these extra payments for all dependents, regardless of their age.

As President Trump continued to push for $2,000 second stimulus checks and concerns over the Georgian runoff elections surfaced, a handful of Republican Senators also climbed on the $2,000 payment bandwagon. By Tuesday, Sens. Josh Hawley (R-Mo.), Lindsey Graham (R-S.C.), Marco Rubio (R-Fl.), Deb Fischer (R-Neb.), Susan Collins (R-Me.), David Perdue (R-Ga.) and Kelly Loeffler (R-Ga.) all expressed support for $2,000 checks. (Perdue and Loeffler are involved in the close runoff elections in Georgia that could determine who controls the Senate for the next two years, and both their opponents favor $2,000 payments.) Although these Republican senators didn't directly say they would vote for the CASH Act itself (they simply liked the general idea of $2,000 checks), the idea that the CASH Act could receive the 60 votes it needed to pass in the Senate didn't seem too farfetched by Wednesday morning.

However, once the CASH Act hit the Senate floor, it quickly became apparent that it was stuck in the mud. As mentioned, Democratic senators made repeated requests this week for a vote on the bill. But, each time, Senate Majority Leader Mitch McConnell (R-Ky.) or one of his Republican colleagues blocked the request. The CASH Act couldn't get a vote on the Senate floor without Sen. McConnell's consent, and Democrats were not able to change the majority leader's mind and persuade him to allow the bill to move forward. On Wednesday, Sen. McConnell said the bill "has no realistic path to quickly pass the Senate." That statement signaled Sen. McConnell's reluctance to reverse course.

For Sen. McConnell and other Republicans opposing the bill, one of the primary reasons given for blocking a vote on the CASH Act was that the bill doesn't target people in need. For example, on Thursday, Sen. McConnell said the bill would "send thousands of dollars to people who don't need the help." He further noted that "a family of five where the parents earn $250,000 and have not seen any income loss this past year" would receive a $5,000 stimulus check under the CASH Act. This, he said, was "socialism for rich people." Sen. Thune (R-S.D.) described the bill as "a shotgun approach where a rifle makes a lot more sense."

Republicans also suggested that the $464 billion it would take to provide $2,000 checks under the CASH Act could be put to better use. For example, on Friday, Sen. Thune noted that "for the cost of the CASH Act, we could do another round of assistance to help small businesses keep their employees on the payroll and still, still have almost $200 billion left over." He added that, "the expanded unemployment benefit signed into law last week cost approximately $120 billion for 11 additional weeks. That means that we could provide more than [an] additional 40 weeks – 10 months of enhanced unemployment insurance benefits – for those who have lost their jobs for the same cost" as the CASH Act.

In response, Sen. Bernie Sanders (I-Vt.), referring to a study by the Tax Policy Center, claimed that less than 1% of the additional money proposed by the CASH Act would go to Americans with income in the top 5%. "Virtually nothing goes to the very, very rich," according to Sen. Sanders. "An overwhelming majority of those funds," he said, "go to the middle class, the working class, [and] low-income people."

However, this bill had no chance of being enacted into law. Even if the Senate passed the bill, the House would have to pass it as well. But the House has already adjourned for this legislative session. That brings us back to the CASH Act. According to Sen. Schumer (D-N.Y.), "there is one way and only one way to pass $2,000 checks before the end of the year," and that was to pass the CASH Act. To that end, on Thursday, he proposed holding three separate votes: One on the CASH Act, one on the internet company liability question, and one for the election study. On Friday, Sen. Sanders also tried to bring both the CASH Act and Sen. McConnell's bill to the floor for votes. Both proposals were rejected by Sen. McConnell and the Senate Republicans.

For those who support additional stimulus checks, the good news is that the effort is likely to continue. Many lawmakers have already called for a third round of stimulus checks in 2021. President-Elect Joe Biden has also said he'll push for more direct payments (although he didn't suggest an amount for each check). So, despite the demise of the CASH Act, we still might see more – and higher – stimulus check payments down the road.

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Rocky Mengle was a Senior Tax Editor for Kiplinger from October 2018 to January 2023 with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, Rocky worked for Wolters Kluwer Tax & Accounting, and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky holds a law degree from the University of Connecticut and a B.A. in History from Salisbury University.