Federal Stimulus Check: Senate Republican To Propose ‘Inflation Relief’ For Americans
The last federal stimulus check was approved in March 2021 under the American Rescue Plan Act. Although a few proposals have been put forward since then to offer relief to Americans, none have gathered enough support to turn into law. On Thursday, one more proposal came up that aims to offer a form of a federal stimulus check to lower- and middle-income Americans. This proposal was introduced by a Senate Republican to help Americans offset some of the impacts of rising consumer prices. This proposal doesn’t directly offer a stimulus check, but rather adjusts the federal programs for inflation to give recipients more money.
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Federal Stimulus Check: How Americans Could Get More Money
On Thursday, Senate Republican Chuck Grassley proposed the Family and Community Inflation Relief Act. The proposal calls for adjusting certain thresholds for several tax benefits and government assistance programs, such as the child tax credit, to account for the rise in price levels.
"The bill would ensure tax benefits afforded to families, students and others are not eroded at a time when they are seeing their paychecks shrink and costs rise due to inflation," read the summary of the proposal.
Inflation jumped to 9.1% in June on a year-over-year basis, the biggest increase since 1981. In June, the Federal Reserve came up with the biggest interest rate hike in 28 years to control inflation.
"While President [Joe] Biden has failed to produce any meaningful solutions to the economic crisis he created, I'll continue working on commonsense policies that will help Americans weather this soaring inflation," Grassley said in a statement.
A point to note is that the IRS usually adjusts the federal income taxes for inflation, but many of the government's low-income assistance programs, such as the child tax credit, don’t get the same treatment. The Child Tax Credit is an income-based program that offers up to $2,000 per child to families with children under the age of 17. Individuals earning less than $75,000 (and married couples earning less than $150,000) qualify for this payment.
Other Programs That Would Offer More Money
Apart from the Child Tax Credit, the proposal would index for inflation many other federal programs as well. These programs are: the American Opportunity Tax Credit, Non-Child Dependent Credit, Child and Dependent Care Credit, Student Loan Interest Deduction, Lifetime Learning Credit, and Charitable Mileage Deduction.
The cost of indexing will come from extending the current law cap on the state and local tax (SALT) deduction that is set to expire after 2025. Grassley’s proposal calls for extending this cap for one more year.
In June, Grassley introduced another proposal, called the Middle-Class Savings and Investments Act. The proposal calls for providing tax relief to low- and middle-income Americans by allowing them to exclude some of their interest income from being subject to tax.
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