Democrats Pivot, Now Say Next Stimulus Bill Must Focus on More Loans, Direct Payments

By:
Chris Gaetano
Published Date:
Apr 3, 2020
Congressional Democrats want to put their previous plans for an infrastructure bill on hold and instead focus on more direct payments for individuals and loans for businesses, said Bloomberg. While initially they had been pushing for a $760 billion plan focused on funds for highways, water, and broadband, House Speaker Nancy Pelosi (D-Calif.) now says that the $350 billion in the last stimulus for small business to maintain payrolls for two months is not sufficient, nor are the expanded unemployment benefits and the direct payments to individuals. Republicans were generally against this idea, believing that it would be better to wait and see how the CARES Act works out before considering anything new.

The announcement comes as the previous $2 trillion CARES Act implementation has started to encounter hurdles. Accounting Today said that, because of the logistics of giving out so many $1,200 payments, it is estimated that some people will have to wait until as late as September to get their money. The IRS will first need to send 60 million direct deposit payments in mid-April to the people who have bank account information on file with the agency. This is estimated to take about three weeks. But then the real challenge begins, when it starts sending out paper checks in May, as it will need to send out about 100 million checks at a rate of about 5 million per week, possibly adding up to about 20 weeks. These checks will be issued starting with people with the lowest adjusted gross income, and ending with those with the highest. To expedite matters, the IRS expects to create a portal later this month or in early May to let people update their direct deposit information and check on the status of their payment, said Accounting Today.

This, in turn, comes after the IRS came under heated criticism for saying in its regulatory guidance that recipients would need to file a tax return, despite the law explicitly saying that this would not be necessary, resulting in a quick reversal of position.

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