Stimulus Legislation “Loophole” Allows Garnishment of Relief Checks
This is one of them things that can make a bad situation involving people already under pressure exponentially worse:
Millions of people received their stimulus payments from the federal government this week, but some are at risk of immediately losing the money if they owe credit card, medical, or private student loan debts.
A loophole in the law could mean some of those who are most in need of the emergency aid don’t get the money. About a third of Americans — some 71 million adults — have debt in collections and could be impacted, according to the National Consumer Law Center.
The $2.2 trillion congressional coronavirus relief plan passed in March did not shield the stimulus payments from certain private debt collectors, though it specifically protected the money from being taken to cover unpaid taxes or federal student loan payments. (The law does allow the money to be garnished for child support payments.)
Twenty-five state attorneys general and the Hawaii Office of Consumer Protection warned about the problem in a letter sent this week sent to Treasury Secretary Steven Mnuchin, asking him to issue guidance protecting the payments from private debt collectors, too.
Democratic Sen. Sherrod Brown of Ohio and Republican Sen. Josh Hawley of Missouri also called on the Treasury Department to prevent garnishments for private debts.
Despite the bipartisan push, Treasury hasn’t issued new guidance. The agency did not respond to a request for comment Wednesday
.
UggghhhhhReport
How would a creditor garnish a one-time payment? And why isn’t this a matter of state law?Report
I was wondering this as well. Not exactly my area of expertise but every time I’ve had to deal with it in-house it’s been after getting a writ from a county circuit court.Report
Yeah, I don’t see how in my state one could garnish this payment unless the courts were open, the money sat in a bank account while whatever orders/summonses were acquired and served, it was not considered to be for “public assistance” or otherwise exempt.Report
Maybe this:
https://www.nytimes.com/2020/04/16/business/stimulus-paychecks-garnish-banks.htmlReport
I can’t read the whole thing, I wouldn’t consider that a garnishment though. I think of a garnishment as requiring judicial process against a third-party who is or will be in possession of money of a debtor. I would assume the bank has self-help methods in the contract to deduct fees and expenses from the account.
The AGs want analogous treatment with social security, disability and veterans’ benefits, which appear to be treated as garnishable wages in some states, not mine. But if it were, the creditor would serve some sort of legal process on the bank, so that going forward the bank would pay a certain percentage of each of those deposits to the creditor for a few months.Report
I’m not a lawyer, of course, but could the feds prevent it via the federal power to regulate bankruptcies?Report
I know the partisan Dems are going to shriek when I say this, but the corona relief bill Pelosi is so got-dam proud of is one of the single greatest FUBARs in American history.Report
A lot of us said so before it was passed. Like the %500BN that was originally going to be under the Treasury Secretary with no IG or other oversight, and which the President then said in his signing statement would not be subject to IG oversight right after demoting the Acting IG who would have run the panel. Or how hedge fund managers are trying to get relief from the SBA small business paycheck loan program. Just goes to prove that Democratic politicians are way more in the pockets of big business then they are given credit for.
And yet trying to right some wrongs in the next bill – like getting more money for hospitals and states – means Pelosi is playing games with people’s lives.Report
It was an opportunity to just send people checks. “We’re going to just send people checks”, they could have argued. Make the Republicans be the ones who say “but we want to bail out the Cruise Ships! Especially the ones flagged in Belize!”
I wonder what the last “clean” bill was. I’m wondering if it was something like “Post Office #4822 in Centerburg, Ohio be renamed the Homer Price Post Office”.Report
Yup. Work the problem from the bottom up. First, cash money to people so they can stay fed and sheltered; next, cash money/loans to small businesses to keep them afloat; etc and so on. Instead the got bogged down in negotiations of means testing a paltry one time $1200 payment. Which was a policy proposal from radical lib Mitt Romney, I might add. Ugh.Report
I’m just amused that it’s her bill now whereas a scant few days ago it was Mitch, Mitt and other republicans who were deserving of credit for suggesting just giving money to people directly.Report
Yeah, I noticed that also. For example, did the senate not also vote on this bill? Did any Republicans support it? Were they part of the committees that drafted it, even if they were in the minority? Did any of them point out that this was a problem? Did anyone think about this at all?
I suspect no one thought of it. They should have.Report
Vote on it? The Senate wrote it and passed it first (while haggling with the Dems and the House)! Then the Democratic Congress passed it afterwards.Report
No, it’s not her bill. It’s the bill Pelosi is so proud of. Despite her boasting, it’s a pos bill.Report
I’m proud she forced them to put oversight of the funds into the bill and the various other changes she forced through too. I don’t know how much of a shitty bill it is overall but I do know that Pelosi forced it to be less shitty.Report
Proud? Seriously? Isn’t including oversight the absolute least could expect from competent legislators?Report
Yes, and seeking it is something we got from our party whereas the other party sought to have no oversight and instead of folding our party stuck to their guns and ended up winning on that issue. Is that not reason to be proud? Not, like, wildly enormously proud but proud in a “small job correctly done” kind of way?Report
Oh, and yes, Mitt does deserve credit for proposing cash payments. Which should make Democratic voters very embarrassed about their party.Report
Don’t be an asshat. The bill passed through three bodies: the house, the senate, and the whitehouse. Two of those three are Republican controlled. If the bill has flaws — and did anyone expect it would have zero flaws? — then who pointed those out during debate?Report
Shut it, VD. Unless you wanna go right here on the main page of OT, back the fuck off.Report
What are you threatening exactly? To “go right here”?
What could you plausibly do to me that wouldn’t just make me laugh at you?Report
Not threatening anything. Just tired of your prissy school-marm bullshit and other assorted pretenses.Report
Do you expect to play an “See it’s all Pelosi’s fault” and no one is going to call you on it? Seriously?Report
Read what I wrote.
The bill is shit; Pelosi is proud of it; Pelosi is proud of a shit bill.Report
Personally I like how both of you debate and present yourselves. There’s no need to go personal.Report
Dude…..chill…..please.Report
Third time she’s called my an asshat or similar in the last two weeks, greg….Report
Maybe so, but escalation doesn’t help anyone. Sometimes it’s best to ignore or jest or anything else but ramping up.Report
my dude, it is the height of irony to see you complain about being treated badly by another commentor.Report
Let’s relax, I mean we’re arguing over legislative spin. I mean it’s crazy important stuff in a wonky kind of poli-sci nerd way but we don’t need to get intemperate about it.Report
So Mitt Romney is moving to the left on issues marginally and it should be cause for Democratic embarrassment? Oddly I don’t feel particularly embarrassed about it. Good on Mitt. Pity he’s alone. As I recall the Dems were pushing for something like 5 cash payments so it’s not like they had a march stolen on them.Report
So Mitt Romney is moving to the left on issues marginally
No, Mitt moved towards advocating a good policy, one experts near universally agreed was the right policy, and Dems *let him do it*. That he gets credit for moving left implies that cash payments is a lefty-ish policy, though. It was like a giant door, wide open, waiting for someone to walk through, perhaps the so-called Party of the Working Class. But no. Romney did.Report
It’s not like the Dems were not also proposing cash payments, Stillwater. They were, and more of it (as I recall- 5 regular payments) and without the ridiculous means testing that the GOP insisted on putting into their bill.
Thus my confusion on your point. It’s not like Mitt said “let’s do a cash payment to people” and the Dems were like “Never!”Report
North, Pelosi wanted the payments/benefits to be means tested. Here’s a tweet from Pelosi’s deputy COS on March 17:
As Congress considers the next steps, the Speaker believes we should look at refundable tax credits, expanded UI & direct payments—but MUST be targeted.
And look, I get that you want to highlight all the good stuff in Pelosi’s wishlist proposal from mid-March, but on cash payments not only did she think they should be targeted, the final bill didn’t move beyond Mitt’s initial proposal.Report
Well sure, and I take your point on means testing but they were still proposing cash payments to folks at the same time as the GOP did and MItts proposal was means tested too. Poorer people were supposed to get less, scaling up to 1200 for middle class people and then down again as you moved into the wealthy income brackets.
Hell, the wishlist proposal was just that- a threat and a wishlist. All it was intended as was a threat to get bargaining leverage with the GOP on their bill (the bill that was actually passed) in the Senate. As soon as it achieved its purpose it was dumped.
I get you’re deeply scornful of the Democrats for having insufficient vision and fight in them by your measures but they control half of Congress and that is it. I just don’t see much to criticize in Pelosi’s generally pretty skilled and disciplined fighting to hold her caucus together and get the Republicans to budge on various issues.Report
“Demanding” things doesn’t make them happen. I can’t tell , nor can anybody really, how much more Pelosi could have gotten from Mitchy poo. More would have always been better of course.
It’s a super common thing among people nowadays to always assume X side could have got so much more out of negotiation if they had just tried or demanded or some such. Gosh knows the R’s did it with the Obama/Iran deal. Just magically assumed O could have got everything the right wanted. But that isn’t how negotiations work.Report
Yeah, I think you’re confusing things a bit here. When people say “X could have demanded” they are stating a bare fact about these political situations. Pelosi could have, as a bare fact, demanded $2000/mth direct cash payments for the duration of the epidemic. She could have made McConnell publicly declaim it.. Trump veto it. She didn’t though.
Is she doing the best she can? Sure. Why would “doing the best she can” make her immune from criticism?
Alternately, I’m a bit baffled that you proggy lefty types aren’t with me in thinking the Dems blew a political opportunity, as well as hurt the country and its people, by not demanding direct cash payments. All I’m hearing is a bunch of “you don’t understand, Stillwater”s and “the Dems made the bill better than Mitch’s shit sandwitch”. Crazy.Report
From what I understand, you need to sound less like a moral scold.Report
Less like an asshat.Report
Criticize away, i agree with some it. She could have demanded though i dont’ know that would have done much. She did make mitch shit a bit less shitty. That seems to be true along with she could have pushed more. The thing with negotiations is you never know if you got everything you absolutely could have. You just never know what the other side was willing to bend on.
I would have liked a harder push. So i agree with you on that. That said we were always going to have to give in to some of mitchs crap. I also would like it if the D’s backed away from over-complicated plans towards simpler ones. So i think we agree there. But all good D things are going to be watered down by R’s.Report
She could have demanded though i dont’ know that would have done much.
Learned helplessness.Report
Meh. I think that applies more to Schumer who is terrible.Report
Pelosi knows exactly what she’s doing. That she didn’t include direct cash payments in the bill was a conscious choice on her part. Remember, she’s a master strategist political vote counting genius who’s the heart of the party. She absolutely knows what she’s doing. She doesn’t have learned helplessness. She’s counting on it in the electorate.
Also, Schumer is the f***ing worst. He costs Democrats votes every time he speaks publicly, and cuts shitty deals with McConnell that hurt Democrats on policy.
Add: This is the party I will crawl over broken glass to vote for in November.Report
Hey at least we agree on schumer being useless and voting for biden. If the D’s managed to get the senate, a long shot, i’d love from them to ditch schumer.Report
They can ditch him right now.
They should.Report
i’ll drink to that. Its actually one of my longest running arguments against so many talented senators trying to run for President – the D’s in the Senate need different leadership.Report
What was Pelosi supposed to do? McConnell’s proposed bill was even worse. It was literally just a giant slush fund with no oversight for the wealthiest people in the United States. It took the entire Democratic Party refusing to go along to get this bill passed. Pushing for something much more liberal would result in no bill because the Senate would vote against it or Trump would veto it. It was either this or nothing.Report
What was Pelosi supposed to do? ‘
Pelosi did exactly what she was supposed to do. A different Speaker mightawould demanded the inclusion of say bi-monthly direct cash payments at $1000 per for the duration of their unemployment/until the economy reopens and refused to vote on a bill lacking that provision.Report
…and then her right flank abandons her, backing the worse McConnell bill because it’s better than nothing.Report
She was supposed to use her superior willpower, Green Lantern style, to force Mitch to do her bidding.
It’s an idiotic idea that pops up on both sides of the aisle, for many things. In this case, dissatisfaction with the result of result of compromise coming out not as “In a just world, in a sane world, this would have been better” but into bitter recriminations that of COURSE a better deal could be found, if only [insert list of nonsensical things here].
Followed, of course, by bitterly blaming one side — or often one person — as the designated scapegoat for being unable to dictate the outcome, like a victor to the vanquished.Report
The causal acceptance of bad policy because it’s “the best the Dems can do” ought to make each of you sit up straighter in your chairs and pay attention. “Wait. Is this *really* the best the Dems can do? Powdered sugar on a shit sandwich? Hmmmm…”Report
There has been a lot of good policy proposed by democrats in this congress that is way better – and its all sitting on Mitch McConnell’s desk, dead as a door nail. the House has sent over 400 bills to him on everything from gun control to teacher pay, and he refuses to take any of it up because, you know, judges.
So when the economy tanked and people were dying, House Democrats backed off from their grand policy crusades and dug in to get some initial work done. It wasn’t all good policy – hell even the White House intends to ignore some of the good parts – but it was a start.
Now the second stimulus bill is facing the same death spiral as those other 400+ bills because the House version does contain better policy choices – including more money for hospitals and state governments and additional cash payments to individuals. But the WH and the Senate don’t want anything of the sort – they ONLY claim to want more money for the Paycheck Protection Program (which was clearly underfunded massively). SO now the second stimulus sits, and Demos are not yet backing down. Because the Republicans don’t want good policy – they want good sound bites that make Wall Street go back up.Report
“and he refuses to take any of it up because, you know, judges”
Kinda ignoring that Dems have done everything possible to slow-roll those judges, despite KNOWING Reps will get them through anyway, all because the Dems want their own sound bites first. If they hadn’t wasted so much time all the bench seats would have been filled by now and Mitch wouldn’t have anything left to do but finally bring bills to the floor. Dem leadership made a deliberate decision that grandstanding for the media over judges they couldn’t stop was more important than actually getting around to debating legislation they might have been able to pass.Report
Merrick F’n Garland.
Until the Right apologizes for that bit of showmanship I don’t really care. McConnell can easily do other Senate business when it suits him – the Pandemic bill is a prime example.
But Still.
Merrick F’n Garland.Report
Philip, I vote Dem because on balance I agree with their policy priorities more than the GOPs. But I’m not sure how “generally agreeing with their policy priorities” entails “never criticize the Democrats for their incompetence, political tactics, political blunders, institutional decision making, etc”. I know you aren’t the person who needs to hear that though.Report
Your refusal to acknowledge the existence of the GOP controlled Senate is just weird, man.
It’s like you want to blame Pelosi personally so bad you neglect the entire Senate in your indignation. If you’re going to discount an entire half of Congress in your tirades, why should anyone bother with you?
You’re not operating in reality, you’re just shouting spittle-flecked inanities at the clouds.Report
JS, do you think it would have been good policy as well as politics for Pelosi to have insisted on higher a total mount of cash disbursements to American workers?
Don’t say she would have if she could have!!!Report
“JS, do you think it would have been good policy as well as politics for Pelosi to have insisted on higher a total mount of cash disbursements to American workers?”
Just to be clear: You’re talking about the Senate bill Schumer negotiated, yes?
You want to know if I think Pelosi, who last I checked is the Speaker of the House, should have pushed harder in a Senate negotiation, for one specific bit — the cash disbursements? Not unemployment expansion or anything like that, just the one time checks?
With the conclusion that, if she didn’t push harder on a one-time check, this represents a total failure of the Democratic party that she’s singlehandedly responsible for?
This one thing, 100% her fault? Death to the witch?Report
Just to be clear: You’re talking about the Senate bill Schumer negotiated, yes?
Waitaminute. So now the argument is that Pelosi just passed the Senate bill without any personal input on her part?
Suppose that’s true, that she just rubber-stamped Schumer’s shit sandwich. Why are you defending her then, or the party?
“It was a matter of urgency, you see…”Report
Adding: one reason this discussion is so exhausting (to me 🙂 is because it strikes as so much easier to just admit that the Dems aren’t perfect as a party.
ANd even though partisan Dems will gladly concede that they agree the party isn’t perfect, you guys reject every single criticism of the party that I and other people offer as being illegitimate.Report
“you guys reject every single criticism of the party that I and other people offer as being illegitimate.”
congratulations, you’ve worked out why there are so few conservatives interested in posting at this website!Report
“Adding: one reason this discussion is so exhausting (to me 🙂 is because it strikes as so much easier to just admit that the Dems aren’t perfect as a party.”
Oh, is that what we’re doing?
Kinda…weird to go from “I know the partisan Dems are going to shriek when I say this, but the corona relief bill Pelosi is so got-dam proud of is one of the single greatest FUBARs in American history.” to that, innit?
Deceptive is the word that comes to mind. I mean I have a hard time reading that and thinking “Oh, man, he’s just wanting people to admit Democrats aren’t perfect”. Maybe it’s just because English is my first language, so my unfamiliarity with it is tripping me up.
Maybe that’s why I’m so strangely hung up on this “Pelosi is totally to blame” bit — I mean, again — I sort of thought bills became laws by passing both Chambers of Congress, again my unfamiliarity with the nitpicky nature of American government — being only a native citizen and all — might have led me astray.
When did she get elected queen? Or did she inherit?Report
Well, let me respond only by noting that you didn’t answer my above question re: whether Pelosi should have insisted on higher direct cash payments. So there’s that.Report
I didn’t, because you’re shoving goalposts around like crazy, and denying basic facts.
What’s the point of answering you, if you refuse to even acknowledge basic reality like “Both Chambers of Congress must agree to a bill, and one chamber if controlled by the GOP and one is not?”
And then when called on it, smoothly pivot to “partisan Dems can’t take criticism”.
Offer some, instead of transparent BS that requires the current object of your ire be Queen to actually have any relevance.Report
Plus 1!Report
I’ll add this to an already pretty lengthy of Reasons Criticisms are Democrats Can Be Rejected as Illegitimate: that the people who make them don’t understand how Congress works.Report
Saw this, thought it was appropriate:
Report
This seems like a good area for improvement.Report
Once more “the cruelty is the point.” A good chunk of this country is still extremely puritanical and Calvinist and refuses to acknowledge extraordinary situations. Everything is an opportunity for moralizing, hectoring, means testing, cutting, etc.Report
Loophole? There is no loophole here. If someone owes money, and then they get money, the people who are owed are going to try to get that. This is normal. If there was any loophole* it would be going the other way. In other words, a special carve out that exempts debt collection from stimulus type money..
But, when you look at who wrote that ignorant piece of garbage, you see it is CNN.
*By the way, in general this is a stupid term. Either there is a carve out in a law, in which case it is put there specifically, or it is still the status que.Report
To me, it reads like an oversight that will weaken the effectiveness of a bill that meant to provide relief in a time of crisis.
Yes, the people owe the money. No one (here) is suggesting the debts be liquidated. The point is, this is an emergency. People are in survival mode and that case might have helped, but now (for some) it will not. That is bad. It should not have happened that way. The drafters of this bill should have shown more foresight.Report
Now why would professional politicians show foresight regarding debt collection? They so very rarely have their wages garnished that I’d be impressed if it did cross their minds.Report
Shall we dare to use the word “privilege”!
But yeah, this is a “don’t attribute to malice what is explained by incompetence.”
However, I don’t think “incompetence” is precisely the right word. Instead, I would say “out of touch.” I think that gets closer to the real problem.
My question is this: will they learn from this? Will they take the time to think of the real lived experience of poor people? Will they do better in the future?
I mean, will they? Should we hold our breath?
Myself, when I say “I acknowledge my privilege,” I don’t mean whatever dumbass thing the anti-SJ crowd thinks I mean. Instead, what I mean is that I sometimes fail to imagine what it is like for people different from me. Furthermore, I understand this lack in myself. Moreover, I try to do better.Report
“Now why would professional politicians show foresight regarding debt collection? ”
There’s a reason large bills often take a very long time to get anywhere. There’s generally whole layers of staffers and analysts whose whole job is to comb through the bill and spot things like this.
I’d be shocked if this was the last problem in an emergency bill, one so large and so swiftly passed.
And I can’t really blame them for rushing it.Report
If I was going to rush through a bill to push trillions of dollars into the economy, one of the top things on my mind would be thinking about the many and varied ways people are going to try and get their hands on as much of that cash as possible. Stuff like, no garnishment (even for fines, etc., local governments are just as greedy as scammers and businesses), and making damn sure the POTUS can’t shitcan the watchdog keeping on eye on corporate disbursements.
Shit like that.Report
One of the complaints about the back-room-negotiated-Senate-originated bill was that the vote violated Pelosi’s own rule that votes will take place no earlier than 72 hours after a bill hits the floor. I get that the bill needed to be rushed, of course…
One more “of course”: partisans believe that their own side’s Reps acted in the best faith possible to create the best bill possible and the reason it sucks is due entirely to the incompetence and corruption of the other sides bad faith leaders.Report
I’d thought they deliberately left it open to garnishment because of child support.
“No garnishment” means it would be reported as keeping food away from children.Report
Speaking of, IMHO every politician, from the lowest of mayors and city council members on up to the Ol’ Cheeto In Chief should have their paychecks halted until the economy restarts. No tax revenue coming in, the leadership should stop getting paid.Report
Your mouth to god’s ear.Report
Well there is tax revenue coming in at all levels, and frankly if you try and take their paychecks someone will want to take bureaucrats paychecks, and sadly at least some of the bureaucracy is actually needed to make this all work.Report
“No Bureaucrat Left Behind!”Report
The point is not to punish, it is to make sure the political class remembers that the decision to drastically slow the economy has real consequences for people who don’t enjoy a high degree of financial security. They need to feel the same kind of pain, even if they will probably never feel the same degree of pain*, that a large percentage of the population feels over this.
I mean, how many pictures and videos have we seen already of elected officials holding press conferences regarding ‘social distancing’ (a term I am so very much done with) where a dozen or more people are all crowded together so they can make sure they are in the camera frame.
*PS I applaud business leaders who are forgoing their salaries, or who are dipping into corporate cash reserves so employees can keep getting paid.Report
The only way to make them feel pain is to unelect them.
That aside I was more reacting to the assertions about tax revenue and not the need to deal with the politicians.Report
I don’t know if this is where you were going with the “bureaucrats” comment, Phiip H, but I agree with what I *think* you meant. Bureaucrats are hard workers,* too. And too often that fact gets lost in the anti-bureaucrat mentality.
(Apologies if I misread your comment.)
*No, not all of them. And yes, bureaucracies, especially government bureaucracies, have a lot of incentives to facilitate abuse.Report
Well, Trump donates his paycheck every quarter, and this time it went to HHS to help with Corona efforts, so I wouldn’t want to stop that, but otherwise…Report
I’m skeptical that there is a loophole here, but from the piece greginak referenced, it does seem like direct deposits had unforeseen consequences when they went to what appear to be abandoned accounts with negative balances. For them it would have been better to get a check in the mail, and they could have deposited/cashed it where they wanted it, including paying down debts that make the most sense.Report
“Unforeseen consequences” seems like the correct way to frame this.
My question is can we fix this in a timely manner to help people in need?Report
This was a big bill passed in a hurry. I think Aaron David is right that income normally is subject to garnishment unless some law carves it out. There’s no carve-out in the law. Did somebody advocate for one and not get the vote? If so, I haven’t heard about it. That means it’s absolute nonsense to blame anyone, Republican or Democrat, that nobody thought about this in the mark-up sessions. It isn’t even incompetence. Big legislation usually has some unintended gaps, especially if it is thrown together fast. This looks perfectly normal to me. Now that it has come to public attention, let’s see if someone proposes a fix and, if so, who lines up on which side. Then we can all have our partisan fun if anyone thinks that worth doing.Report
Digging deeper into this, it looks like, as PD Shaw says upthread I beleive, that it is accounts that are allready in overdraft and it is an automatic feature. I have heard that some banks are catching it on their end and making the funds available.Report
If the problem is direct deposits into accounts with negative balances, then I wonder if its not too late to give at least some people an option to opt-out for a mailed check through the on-line site.
Second, each of those state attorney generals has attorneys that can investigate whether the debts and charges on those accounts are legitimate. I’m skeptical that errors in the account balances are necessarily a significant issue, but an announcement that their offices are willing to examine any consumer complaints about access to these funds over the next 30-60 days. The purpose here would be to encourage more financial institutions to voluntarily credit these accounts temporarily (or whatever JPMorgan Chase, Wells Fargo, Bank of America and Citibank are doing).
I doubt that once the bank has the money, the government can involuntarily force banks to credit the accounts, but if that’s the only route left, then Congress should simply pay the banks to do so. That wouldn’t be very popular.Report
I read only the excerpt Andrew provided (not the whole article), so my question might be answered there, but here it is: Has anyone actually had their check garnished, or is it only a theoretical possibility? (I do realize PD Shaw’s point about direct deposits going into accounts with negative balances, and I can see how that would have happened.)Report
This is not the only unforeseen circumstance involving debt to kill the checks. My parents live off fixed income and were forced to abandon their home, declare bankruptcy, and move after the bank more than doubled their adjustable rate mortgage payments. I’m not clear on exactly how bankruptcies normally work, but apparently writing off the remainder of the mortgage got counted as income on their most recent tax filing, so despite them barely making ends meet on Social Security and my Dad’s pension, they’re evaluated as exceeding the upper limit of the means testing. So, no checks for them.Report
I’m not clear on exactly how bankruptcies normally work, but apparently writing off the remainder of the mortgage got counted as income on their most recent tax filing, so despite them barely making ends meet on Social Security and my Dad’s pension, they’re evaluated as exceeding the upper limit of the means testing. So, no checks for them.
Write off of debt is counted as income for all taxpayers, generally. However, there’s a long list of rules on home foreclosing that would minimize your parent’s tax burden, most likely to zero (the most important one, if the mortgage was or not non-recourse)
As you should know by now, the original House proposal was that everyone, including you, me, and your parents, would get their checks, and a clawback -if applicable- would take place in your income tax filing next year. The Senate introduced the means testing procedure now.
To the extent you or your parents feel the means testing provision is unfair (I do, but that’s me), please address this to your senator, and vote accordingly next timeReport
Just curious, why do people think that means testing is unfair?
I want this to help those in greatest need. The fact is, I don’t need this check. I’m still working. I work for {bigtech}. I don’t need a thousand bucks from the feds.
Other people need this, and more than this. The fact that I earn enough to not need this is good for me. I’d much rather that I don’t get a check and those who need one will get more.
Means testing seems sensible. What are the arguments against it?Report
“Just curious, why do people think that means testing is unfair?”
As a basic concept? It isn’t!
In practice it’s bullshit because it always seems to turn out that someone who needed the money doesn’t get it for some complicated and unforeseen interaction of reasons, while the people the means-testing was supposed to stop getting money end up getting money after all for some complicated and unforeseen interaction of reasons.
“I don’t need this check. I’m still working. I work for {bigtech}. I don’t need a thousand bucks from the feds.”
So spend it! That’s the damn POINT! Go down to Emperor Norton in South San Jose and buy two hundred fifty dollars of wine so they can make their rent and don’t have to close. (get a cheesesteak too, they make really good ones.) Buy snacks at the bodega downstairs, buy cute knitted things off Etsy, find out if whatever bars or coffee shops you like to go to have merch and buy some T-shirts. If you’ve got money left over donate it to charity, donate it to the local hospital, buy some Safeway gift cards and put them in the dropoff slot for the mail carrier or tape them to the dumpster for the trash guys. Maybe you don’t need the thousand bucks, but the point is not just that you personally get a thousand bucks, it’s that you get a thousand bucks and then you go redistribute it to the rest of your community.Report
I live in Boston, so I can’t really go to those places (although I’m sure the airlines would love it if I did). Also, I’m in a high risk group, so I’m not going out much.
I do order take out reasonably often. I tip well. But otherwise there aren’t really many opportunities for me to spend.Report
In practice it’s bullshit because it always seems to turn out that someone who needed the money doesn’t get it for some complicated and unforeseen interaction of reasons
The means testing could also take place after the fact. Give everyone cash right now and determine whether they need to pay it back based on their 2020 tax returns (or whatever).Report
Thanks for the added info, J_A. I’m generally in favor of means testing aid, but I’ll admit this is a bit of a wake up call to how complicated the interactions with debt and taxes can get when proposals are rushed through. Given the time constraints, I’m not sure that was realistically avoidable though. I’m just hoping the follow up gets better. I did prefer a clean bill in this case (really in most cases, I despise omnibus bills for all the pork and stupidity that invariably get hidden in the depths as both parties have to bribe each other off to pass anything), but I’m vaguely hopeful that these sort of kinks will get ironed out before the next election rolls around.Report