WSJ: Second Stimulus Payment Could Deliver Cash Even Faster

WSJ Second Stimulus Payment Could Deliver Cash Even Faster

Lawmakers agree that households should get repeat round of $1,200 checks, and IRS is poised to send out money quickly

By: Richard Rubin

Congress is poised to approve a second round of stimulus payments for U.S. households, and money could reach many Americans faster this time.

The Internal Revenue Service now has procedures, online tools, bank-account information and coordination with other agencies that it didn’t have set up in advance when the first round of payments was approved in the spring.

Now it is up to Congress to approve the second round of payments, set all the details and send a bill to President Trump for his signature. That still could take weeks, but once that happens, money can start flowing.

“Since the IRS has already assembled the data it needs to deliver the first-stimulus payment, they should be able to deliver a second payment fairly quickly and at a lower administrative cost,” said Jack Smalligan, a former Office of Management and Budget official.

House Democrats passed a bill in May that would offer $1,200 per adult and $1,200 each for up to three dependents. It would also expand eligibility to groups that were excluded from the earlier round, including adult dependents, college-student dependents and households where some people are citizens but others aren’t.

Senate Republicans and the Trump administration, meanwhile, want to repeat the first round of payments, Treasury Secretary Steven Mnuchin said Thursday. That means $1,200 per adult and $500 per dependent. The Senate Republican plan is likely to include payments for all dependents, not just the children eligible for the first round, said a person familiar with the proposal.

The House and Senate plans would both start shrinking payments for individuals with incomes over $75,000 and married couples with incomes over $150,000.

Once Congress reaches an agreement and includes payments in a broader economic-relief package, the IRS and Treasury Department will start preparing to send out the money. The more complex the criteria and the more they differ from the first round, the longer it might take to get payments out.

Treasury and IRS officials haven’t specified how fast the money might come, though Mr. Mnuchin said Thursday that Mr. Trump opted for more payments instead of a payroll-tax cut because the money could be delivered faster.

“There’s a fair chance that the IRS will be given the opportunity to do it all over again, and we will,” IRS Commissioner Charles Rettig said at a virtual conference this week. “And we will do it as successfully as we can. We will put everything back into place.”

Mr. Trump signed the law that authorized the first payments on March 27. Within about two weeks, the government made 81 million direct deposits, far faster than a similar program in 2008. Using direct deposits, checks and debit cards, the government has made more than 160 million payments totaling $270 billion, Mr. Rettig said.

During that process, 14 million people used new systems on the IRS website to provide the government with bank-account information, Mr. Rettig said. That trove of account information should accelerate the government’s ability to make a large first batch of direct-deposit payments.

In the spring, the government took several weeks to figure out how to send money to people who don’t file tax returns, including many who get benefits from veterans’ programs and the Social Security Administration. They won’t have to repeat all of that work.

The IRS correctly computed payments for about 98% of households, according to an inspector general’s report.

There were some hiccups, however. The government issued debit cards to expedite payments because it has limited capacity to print paper checks, but some people threw them out thinking they were junk mail.

More than $1.4 billion went to dead people after the IRS first determined they were eligible and then reversed its decision, according to the Government Accountability Office. GAO also found that the IRS initially paid too little to 450,000 low-income households with children. Tens of thousands of people received two payments when they should have gotten just one.

An Urban Institute study found that low-income households and Black and Latino adults were less likely to have received payments by mid-to-late May than other groups.

Because the IRS starts with information from tax returns, many low-income households that don’t file returns aren’t in the government’s systems. About 5 million are still waiting for the first payment, according to an estimate from the New America Foundation.

“Appropriating the money isn’t enough if it doesn’t get to families in need,” said Gabriel Zucker, a fellow at the foundation.

Even as the second payment nears approval, the IRS is trying to reach people who haven’t received the first payment through groups that work with homeless people and in non-English-speaking communities.

“The IRS is not perfect and there are areas we need to do better and could do better,” Mr. Rettig said. “We’re working really hard to get to the people that we have not gotten to yet in terms of payments.”

Write to Richard Rubin at