House Democrats settle income debate for direct payments

House Democrats will move ahead with a coronavirus stimulus package that would keep the existing income limits for Americans who receive stimulus checks, while tightening eligibility for higher-earning Americans — a major win for progressives.

The plan, which was unveiled Monday night, would keep $1,400 stimulus checks flowing to Americans making up to $75,000 a year — rather than the $50,000 threshold that some moderate Democrats had proposed. It would, however, tighten eligibility for those making over $75,000 as an individual — a higher-earning group that previously qualified for smaller checks.

Couples making $150,000 would also qualify for direct payments, with that eligibility phasing out for earners making up to $200,000. Centrist Democrats had pushed to lower the threshold for joint tax filers to $100,000.

The details on the stimulus checks will be among the first tests of unity for Democratic leaders in Washington, under immense pressure to assemble a package that can garner support from nearly every one of its members. Already, a number of policy spats have emerged as potential sticking points, including the income levels for stimulus checks and a new $15-an-hour federal minimum wage.

The direct payments proposal — drafted by House Ways and Means Committee Chair Richard Neal (D-Mass.) — settles a debate that has been raging among the various ideological factions in the Democratic Party in recent days and threatened to derail the delicate negotiations before they were even fully underway.

Sen. Joe Manchin (D-W.Va.) did not immediately dismiss the plan when asked about it Monday night, telling reporters that he and other moderates are just trying to ensure Democrats target the payments to those “truly in need.”

“So if they can show that $75,000 and $150,000 is truly in need,” Manchin said of House Democrats.

House Democrats are speeding toward passage of their own version of Biden’s $1.9 trillion bill by the end of February, though key components of that bill could change when it reaches the Senate. With the narrowest of margins, a single Democrat could determine the relief bill’s fate and some in the party are already concerned Manchin alone could reject the House’s proposals.

The House Ways and Means Committee will begin considering its part of the massive reconciliation bill on Wednesday and go through Friday.

“While it is still our hope that Republicans will join us in doing right by the American people, the urgency of the moment demands that we act without further delay," Neal said in a statement Monday.

The tax-writing panel has a huge portion of the relief plan, including a boost in federal unemployment benefits and a major expansion of child tax benefits. The proposal released Monday would expand the popular tax credit for having kids to as much as $3,600 per child, up from the current $2,000 while aiming to allow recipients to claim a portion of the break each month in the form of a check from the government.

Biden has come under increasing pressure to tighten the qualifications for the third round of stimulus payments as Democrats in Congress draft the next big coronavirus rescue package. Biden has proposed a $1,400 check to most Americans, though Democrats have disagreed about whether to make it more difficult for people to qualify for the payment.

Manchin, for instance, proposed phasing out checks for individuals making over $50,000 — rather than the $75,000 threshold used in previous bills. Biden has personally told Democrats he is open to refining the proposal, ensuring that the checks flow to the neediest Americans, though he did not offer specifics.

But progressive Democrats — including those who hold powerful perches in the House and Senate — have rejected the idea.

“The people who got the first two checks are going to expect a third check,” Senate Finance Committee Chair Ron Wyden (D-Ore.) said in an interview Monday. “If you look at the promises that were made, including on the campaign trail in Georgia, I think it supports my position.”

In addition to Wyden, Senate Budget Committee Chair Bernie Sanders (I-Vt.) has also knocked Manchin’s plan to slash the income eligibility limits.

“To say to a worker in Vermont or California or any place else, that if you’re making $52,000 a year, you are too rich to get this whole help, the full benefit, I think that’s absurd,” Sanders said on CNN on Sunday.

Left-wing Democrats in the House, too, have revolted at the idea of narrowing the payments. Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) said imposing further limits was “cruel."

Aaron Lorenzo and Brian Faler contributed.