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White House ‘studying’ options for second round of rebate checks

Millions of Americans gradually receiving initial payments may get more money in new aid package under discussion

Momentum appears to be building for another round of direct payments to households, as lawmakers and the Trump administration start discussions on a new COVID-19 aid package.

“That’s something that we’re studying very carefully, and I know that people in the House are as well,” White House economic adviser Kevin Hassett said Tuesday.

Speaker Nancy Pelosi, House Ways and Means Chairman Richard E. Neal, D-Mass., and other top Democrats have for weeks had more direct financial assistance on their list of priorities for the next aid bill.

Legislation that House Democrats introduced last month proposed checks and direct deposits of up to $1,500 per person, which was higher than the amount ultimately signed into law.

Pelosi told House Democrats on a conference call earlier this month that more cash payments are a priority for a new aid package, which she said could top $1 trillion, though that was before the latest $483 billion measure became law Friday.

President Donald Trump said this month that he favors another round of direct payments, though he didn’t specify a figure. “We could very well do a second round of direct. I would do a direct,” he said during a White House briefing on April 6.

The roughly $2 trillion aid package enacted last month included what the Treasury Department calls “economic impact payments” of $1,200 for individuals making less than $75,000 in adjusted gross income. Couples received $2,400 if they made less than $150,000, with $500 extra per child. Total payments start to phase out above those income thresholds.

The IRS said Tuesday that as of April 17, 89.5 million payments had been issued, totaling $160.4 billion. The agency expects to send out more than 150 million payments overall, which the Joint Committee on Taxation estimates will ultimately cost $293.4 billion.

During the initial bargaining over what became the massive $2 trillion aid bill, the Trump administration pitched the idea of two rounds of staggered payments, six weeks apart. But Senate Republicans and House Democrats ultimately settled on an initial payment, with the possibility of another round later if economic conditions continued to worsen.

Last week, the Congressional Budget office estimated that U.S. real gross domestic product would shrink at an annual rate of nearly 40 percent in the second quarter, an unprecedented contraction. The unemployment rate is set to hit 15 percent later this year, highest since the Great Depression.

It could take some time for another round of checks to go out, however. Lawmakers and the White House have yet to begin serious discussions on the next aid package, with likely protracted negotiations over more money for state and local governments, among other issues.

It’s also not clear what legislators’ timetable for returning to full sessions is. The Senate is expected back on May 4, but it’s unclear for how long. The House was due to return the same day, but Majority Leader Steny H. Hoyer, D-Md., said Tuesday that was no longer the case.

And Trump himself may be a wild card on the structure of direct aid to households. On Tuesday he reiterated his preference for payroll tax cuts, which he had initially insisted on last month, over another set of checks and direct deposits.

“Well I like the idea of payroll tax cuts,” Trump said at a White House briefing. “I’ve liked that from the beginning. That was a thing that I really would love to see happen.”

Democrats last month dismissed the idea of payroll tax cuts, which would deliver bigger benefits to households earning six figures than those in the middle of the income distribution.

Hassett, however, predicted there would ultimately be a deal on a new round of coronavirus relief.

“I expect that it’s very likely there will be a … deal. And we’re going to be speaking with the president throughout the week about what he thinks should be in there,” he told reporters from the White House driveway. “So I think the odds of there not being another round, at least one more round, of legislation are pretty low.”

David Lerman and Lindsey McPherson contributed to this report.

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