How the US Senate bailout differs from the House version

Senate Democrats passed their nearly $ 1.9 trillion version of the American Rescue Plan Act on Saturday afternoon, but not before making major changes to the version of the bill passed by the House of representatives last week.

Some of the more notable changes between the two relief bills include dropping a provision to gradually increase the minimum wage to $ 15 an hour and reducing the number of people who will be eligible for a stimulus payment. of $ 1,400.

The value of Federal Enhanced Unemployment Insurance (UI) benefits was also changed to appease moderate Democratic Senator Joe Manchin of West Virginia, who threatened not to support the bill. Just like in the House, no Republican lawmaker voted in favor of the legislation, saying it was unnecessary.

“This is not a pandemic bailout,” Senate Minority Leader Mitch McConnell, RK.Y. “It’s a parade of left-wing pet projects that they’re going through during a pandemic.”

The bill retains many of the progressive provisions of the House version and added a provision for the cancellation of student loans to pass between December 31, 2020 and January 1, 2026 tax-free.

“Covid has affected almost every aspect of life,” Senate Majority Leader Chuck Schumer, DN.Y. “The US bailout will provide more help to more people than anything the federal government has done in decades.”

Here are some of the major changes between the House and Senate versions of the bill that may affect your wallet.

As expected, the provision to gradually increase the minimum wage to $ 15 an hour was removed from the Senate bill after the parliamentarian, a non-partisan official who decides which bills are eligible to pass the House high by reconciliation, determined last week that the provision did not meet. legislation on standards must meet in order to be adopted by simple majority.

It’s not clear this would have been included anyway: Seven Democratic Senators and Angus King, the Maine Independent who Caucasian with Democrats, voted against an amendment proposed by Vermont Senator Bernie Sanders, also an independent, to raise the minimum wage.

The bill provides for the funding of a third economic impact payment, with a maximum value of $ 1,400 per person and dependent.

Individuals earning an Adjusted Gross Income (AGI) of up to $ 75,000 (and married couples earning up to $ 150,000) are eligible for the full amount of $ 1,400 each, plus $ 1,400 for each dependent. In the Senate version, the payments disappear much faster than in the House version: no one with an AGI over $ 80,000 or couples earning over $ 160,000 will receive one. Heads of household earning up to $ 112,500 will receive the full amount, and the amount will be completely eliminated at $ 120,000 for those tax filers.

In the previous version of the bill, payments were completely eliminated at $ 100,000 for individuals and $ 200,000 for couples. It is estimated that 12 million fewer adults will now qualify for a stimulus payment, compared to previous cycles.

Many Americans were upset by the decision to lower the highest income threshold, calling it a “slap in the face” for middle-class Americans who relied on money and no longer qualify.

Payments are based on 2019 or 2020 income, depending on when a taxpayer files their 2020 tax return.

Unlike previous stimulus payments, dependent adults, including students, adults with disabilities, and elderly Americans, may be eligible for a payment of $ 1,400.

The Senate bill includes a provision to make any student loan cancellations passed between December 31, 2020 and January 1, 2026 tax-exempt. Usually, debt forgiveness is considered taxable income.

The Senate bill does not directly include the cancellation of student debt, but it would make it easier for President Joe Biden to write off $ 10,000 in student debt, as he said, by executive action , if Congress doesn’t.

The Senate bill will extend the federal jobless benefit supplement to $ 300 per week until September 6 and make the first $ 10,200 UI received in 2020 tax-free for households with incomes below $ 150,000.

This differs from the House bill, which extended unemployment programs until August 29 and gave an extra $ 400 a week in benefits. It did not include the provision to make benefits tax-free.

The House will now have to approve the changes before the bill can be signed by the President.

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