Democrats in the House of Representatives recently announced a new "round four" stimulus package designed to help the United States economy weather the storm of the COVID-19 pandemic. The new legislation, known as the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act for short, would have a massive price tag of more than $3 trillion. This would make it the most expensive economic recovery bill yet, roughly 50% costlier than the CARES Act.
According to a summary (link opens PDF) of the provisions contained in the 1,800 page bill, the HEROES Act would provide almost $1 trillion in funding to states and local governments, allocate $200 billion to providing hazard pay to essential workers, fund coronavirus testing and tracing programs, and much more. And last, but certainly not least, the legislation would provide another round of economic impact payments -- better known as stimulus checks -- to individual Americans.
House Democrats' proposal for the next stimulus checks
The direct payments proposed in the new legislation would be of the same $1,200 size as the Economic Impact Payments included in the CARES Act. So, why could this result in a larger payment to you?
While the HEROES Act would keep the same $1,200 payment amount for each adult, it would also provide a $1,200 payment for each of the taxpayer's dependents, up to a maximum of three. In contrast, the CARES Act stimulus payments provided $1,200 per adult and $500 per child. So, a family of four who received a stimulus payment of $3,400 after the CARES Act passed could receive a payment of $4,800 under the new proposal.
To be clear, the same income limitations would apply. The new stimulus payments would begin to phase out for adjusted gross income (AGI) levels above $150,000 for a married couple filing jointly or $75,000 for single taxpayers.
So, if you received (or expect to receive) a stimulus payment from the CARES Act, you would likely receive one under the HEROES Act as well. And if you have dependents, your payment could be significantly higher.
The check isn't in the mail -- yet
As a final thought, it's important to emphasize that the newly introduced stimulus bill has virtually no chance of passing in its current form. The Republican-controlled Senate and the Trump Administration have both expressed reservations about massive payments to states, and some of the package's features, such as extending the $600 weekly unemployment payment bump until January, are likely to be met with strong opposition. So, it's best to think of this as a starting point for negotiations between government leaders.
That said, it's highly probable that the next stimulus package will contain a direct payment to Americans. Leaders on both sides have been supportive of getting money into the hands of consumers throughout the COVID-19 pandemic, and there's no reason to think leaders on either side of the aisle will be completely opposed to the amount included in the Democrats' bill.
While this fourth stimulus effort is a long way from being signed into law, it's looking quite likely that Americans will get another direct payment during the coronavirus crisis.
The $16,728 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.
The Motley Fool has a disclosure policy.
The business news you need
With a weekly newsletter looking back at local history.