$40,000 Figure Not Finalized, Mnuchin Talks Stimulus

This is my Stimulus Update for Thursday, July 9th.

Stimulus Checks

So Kayla asked Mnuchin whether or not the next round of stimulus checks would be kept to only those who make 40,000 a year or less.

Here’s the clip if you want to hear what Mnuchin said.

Kayla: On the stimulus checks specifically, the president has said that he supports another round of stimulus. Leader McConnell has said there should be a $40,000 income threshold. Is that a level that the administration supports?

Steven Mnuchin: Well, I’m going to go into the specific details today on that. But what I would say is we do support another round of economic impact payments. You know, in most cases, those are not checks, it’s direct deposits, and we can get that into hardworking Americans’ bank accounts very, very quickly. The level and the criteria we’ll be discussing with the Senate. I had a very productive call with Mitch McConnell yesterday, Mark Meadows and I spoke to him. And as soon as the Senate gets back, we’re going to sit down on a bipartisan basis with the Republicans and the Democrats, and it will be our priority to make sure between the 20th and the end of the month that we pass the next legislation.

So, Mnuchin was pretty tight lipped, but then again, he wasn’t. At first he kicks it off by saying, I’m not going to go into the specific details, but we do support another round of stimulus payments.

He said, “the level and criteria, we will be discussing with the Senate.” The level and criteria of the next round of stimulus checks.

It’s interesting to me that he did not say, we’ll be discussing with the Senate whether or not there will be another round of stimulus checks.

He almost has the stimulus checks as a foregone conclusion that it’s going to happen, and he says we just gotta get down to the details with the Senate.

It sounds like things are at least a little bit in motion, a little bit of negotiation between the White House and Congress with respect to stimulus checks.

He said that yesterday he and White House Chief of Staff Mark Meadows had a productive call with Senate Majority Leader Mitch McConnell.

Mitch McConnell created a little bit of buzz earlier this week by tying a $40,000 income cap, maybe, to the next round of stimulus checks.

He didn’t directly say as much, but in one breath he said, yeah, there might be an around stimulus checks, and the next breath he said, I think those hardest hit are those who make $40,000 or below.

But concerning that $40,000 income figure, apparently that is not set in stone at all, at least according to anonymous sources informing the Washington Post.

Washington Post loves their anonymous DC sources. According to four anonymous individuals who spoke with the Washington Post, the exact number Republicans will seek with respect to another round of stimulus checks is unclear as talks are fluid.

One person cautioned that Republicans may ultimately revive the original proposal because of the difficult administrative challenges created by trying to narrowly target the checks.

Another anonymous source for the Washington Post, this one a Republican tax expert, predicted that Republicans would probably back off plans to curb the payments because of the administrative hurdles in effectively targeting the funding.

The GOP will also face political pressure not to curb stimulus payments during an election year for middle class households.

These are anonymous statements. You can say something anonymously. It’s not a big deal. So take him or leave him.

My personal gist on this is that I think McConnell might have thrown out that $40,000 figure, might have hinted at it fully expecting that Democrats want to negotiate them upwards on that.

But we’ll have to see. July 20th. That’s when everybody’s back in town. The Senate, got to get those negotiations underway.

PPP (Paycheck Protection Program)

Mnuchin was also asked by Kayla about the PPP. Here’s what Mnuchin said.

Kayla: And then the Paycheck Protection Program, which has supported and estimated 51 million jobs here in the country, many companies have already exhausted the funds that they’ve gotten for that. I’m wondering, can you reach an agreement before what many strategists are calling an income cliff happens at the end of the month?

Steven Mnuchin: Well, let me comment on both of those. First of all, on the PPP. I’ve had very productive conversations with Marco Rubio. Both of us are going to have a conversation with Ben Cardin next week. So there is already bipartisan work. I think any extension around the PPP is going to be much more targeted to the businesses that really need this money, and the smaller businesses. So we’re already working on a plan for that.

So he’s talking with Rubio, who is a Republican talking to Ben Cardin, who’s a Democrat.

He said it’s bipartisan. And he said that any further round a PPP will be targeted to businesses who need it the most.

Now see, Mnuchin is not afraid to say that the next round of PPP will be targeted.

He didn’t come out and say as much with respect to another round of stimulus checks. So I think that is at least somewhat significant.

Kayla also pushes him on the PPP transparency. Hey, why didn’t you give all the names for everybody who got PPP loans of 150,000 or under. And Mnuchin was like, well, those really small businesses. We also want to be respectful of their privacy.

Kayla pushed him on why did Kanye West’s company get a PPP loan, why did this golf club you’re a part of get a PPP loan.

Mnuchin’s like, “Well, I don’t want to get into the specifics of individual private parties,” but he did reassure her that, yes, businesses who got PPP loans of above $2 million, those PPP loans will be looked at closely.

Some will be audited, he said. Some will go through just a review.

But anyway, they’re going to be taking a closer look at all PPP loans over $2 million.

Unemployment

Mnuchin was also asked about supercharged unemployment. Here’s the clip.

Steven Mnuchin: As it relates to the enhanced unemployment, we’ve been very clear. We knew there was a problem with enhanced unemployment and that certain cases people were paid more than they made in, in their jobs. That was a technical fix. We were in an emergency. We went along with that. We’re going to fix that technical fix. We’re going to make sure that people are incented to go back to jobs. I’ve heard stories of where companies are trying to get people back to work and they won’t come because of the enhanced unemployment. But we’ll fix that and we’ll figure out an extension to it that works for companies and works for those people who will still be unemployed.

Kayla: There’s actually a study in the last day that shows that two thirds of workers that were laid off are now receiving more than their prior earnings because of those expanded benefits. So will the technical fix be a cap on those benefits at 100% of whatever that worker was making before?

Steven Mnuchin: You can assume that it will be no more than 100%. So yes, we want to incent people to go back to work. And even at 100%, if people have jobs, we want them to go back to work. So enhanced unemployment is intended for people who don’t have jobs in particularly industries that are harder to rebound. So we will not be doing it in the same way, and we’re in a dramatically different situation. Many businesses are open, many businesses want to hire more people today.

So we know that even in the CARES act, a group of Republicans wanted to cap the maximum benefits, combined federal and state, that an individual can get unemployment to 100% of their wages.

Mnuchin said that this time, after July 31st and the FPC expires, that that 100% limit will be a ceiling.

And in fact, it could possibly be lower than that. That’s what I’m reading here.

We’ll have to see. We’ll just see what they do about that.

Tax Day

Mnuchin was also asked about, why did they not extend tax day past July 15th, even though a lot of people supported that? Here’s what Mnuchin said.

Carl: Mr. Secretary, it’s Carl. Just a quick question on tax day, which is coming up next week, of course. I heard you tell David Rubinstein a couple of weeks ago that you had considered whether or not to delay it to September, but obviously in the end you decided not to do that. What was the calculus behind keeping it in July?

Steven Mnuchin: Well, I reached out to a lot of different constituents on this issue. It was something I wanted to carefully weigh. First of all, all of the accountants in the accountant industry, whereas last time they were concerned about getting taxes in, not only did they assure me they could get it done now, but they actually encouraged me. There’s about 30 billion of refunds that we still want to get to people. They also wanted to make sure that they didn’t get backed up into next tax season. So that was something that was very important. And also I heard from many of the states, it created tremendous revenue problems for them when we postponed it beforehand. But I just want to assure anybody who has a specific hardship, they can go to irs.com. They can go online, the IRS will enter into payment plans for people who have specific hardships. So I think we got the right combination here.

The last sentence there, he said, you can go to irs.com.

No, that’s not the right website. It’s irs.gov, is the right website.

Irs.com is a privately owned website that has nothing to do with the IRS. I think they make irs.com look super official so you’ll think, “Oh, this is IRS website.”

The official IRS website is irs.gov, not irs.com.