Nancy Pelosi rips McConnell for touting stimulus aid for Kentucky: ‘Vote no and take the dough’

Nancy Pelosi Mitch McConnell
Senate Minority Leader Mitch McConnell (left) and House Speaker Nancy Pelosi (right).

  • Nancy Pelosi rebuked Mitch McConnell for touting state aid for Kentucky from the stimulus.
  • “I didn’t vote for it, but you’re going to get a lot more money,’ McConnell said to local lawmakers.
  • Some Republicans have touted parts of the law in recent months, even though none voted for it.
  • See more stories on Insider’s business page.

House Speaker Nancy Pelosi slammed Senate Minority Leader Mitch McConnell for touting the benefits of the stimulus law for his home state of Kentucky. The $1.9 trillion coronavirus relief law cleared Congress in March without any Republican support.

“Vote no and take the dough,” Pelosi wrote on Twitter.

At a press conference on Tuesday, McConnell swung between noting his opposition to the federal rescue package and crediting it with providing substantial financial relief for Kentucky.

“Not a single member of my party voted for it. So you’re going to get a lot more money,” McConnell said. “I didn’t vote for it, but you’re going to get a lot more money. Cities and counties in Kentucky will get close to $700-$800 million.”

The Kentucky Republican said the state was projected to get $4 billion as a result of the stimulus law. “So my advice to members of the legislature and other local officials: Spend it wisely because hopefully this windfall doesn’t come along again,” McConnell said.

Republicans were staunchly opposed to Biden’s stimulus law, which contained $1,400 direct payments, a renewal of federal unemployment benefits, and aid to state and local governments. They argued it was too large and costly after lawmakers had approved a $900 billion federal rescue package late in 2020. Not a single Republican in Congress voted for it.

However, at least a dozen congressional Republicans have since touted parts of the law, such as small business aid, even though they didn’t support the law’s passage. Biden rebuked the GOP earlier this year for “bragging” about the law, saying, “some people have no shame.”

Also on Tuesday, McConnell pledged a bruising political brawl over Democratic efforts to bypass Republicans to implement their infrastructure spending plans. “This is not going to be done on a bipartisan basis,” he said. “This is going to be a hell of a fight over what this country ought to look like in the future and it’s going to unfold here in the next few weeks.”

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Stimulus checks spurred nearly 50% declines in pandemic-era food shortages and financial worries, study shows

Woman supermarket groceries
  • A University of Michigan study found stimulus payments were effective at staving off economic pain.
  • Gauges of food insecurity and financial instability plummeted after checks were sent in December and March.
  • The payments’ delivery even coincided with broad improvements in the mental health of recipients.
  • See more stories on Insider’s business page.

New analysis suggests that relief payments included in Congress’s sweeping stimulus were highly effective at supporting Americans and easing various stresses through the pandemic.

The pandemic-era stimulus checks weren’t the first instance of the government issuing relief payments, but the amount of cash sent directly to Americans over the past year is unparalleled. Millions of Americans received $1,200 payments from the March 2020 CARES Act, another $600 check from President Donald Trump’s late-2020 package, and a $1,400 payment from Democrats’ March stimulus.

The payments were among the less-studied elements of the various relief plans, but a study by Patrick Cooney and H. Luke Shaefer at the University of Michigan found the checks were helpful in several ways. The researchers cited data from the Census Bureau’s Household Pulse survey.

For one, food shortages fell sharply after the December stimulus’s passage and again after the American Rescue Plan Act was approved in March. The share of Americans saying they sometimes or often lacked sufficient food fell to 8.7% by early May from a late-December high of 13.7%. For households with children, the share fell to 11.3% from 18.3%.

Food instability UMich analysis
Source: University of Michigan Poverty Solutions

The second and third relief payments also padded against financial concerns. Roughly 10% of Americans said it was “very difficult” to pay for usual household expenses in late May. That’s down from 17.8% in December 2020. The proportion fell to 13.5% from 23.1% for respondents with children.

Households earning less than $25,000 saw the largest drop in financial instability over the period, but those earning less than $49,000 also saw notable declines.

Recipients’ mental health also improved markedly in the weeks after checks were sent out. The share of Americans saying they felt anxious for several or more days in a week fell to 52.8% last month from 68.6% in late December.

Similarly, the proportion of respondents saying they felt symptoms of depression for several or more days of the week fell to 46% from late-2020 highs of 59.4%.

To be sure, sentiments broadly improved through the spring as the country emerged from the worst phase of the pandemic. Vaccination led daily COVID-19 case counts to plummet, and the easing of lockdown measures brought back a sense of normalcy after a dire winter.

Yet when considered alongside data on food shortages and financial insecurity, the checks seemingly made significant positive impacts on Americans’ lives. Similarly, in the period between March 2020 and December 2020, gauges of economic hardship worsened amid soaring COVID-19 case counts and the gradual exhaustion of CARES Act relief.

The stimulus checks’ broad-based, rapid, and cash-based nature made them far more effective forms of economic support during the pandemic, the researchers said. The checks supported needs ranging from food scarcity to housing payments, and widespread eligibility matched the widespread fallout felt throughout the country.

“The success of this approach is worth learning from, and building off of, in the months and years ahead,” the team added.

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A Venezuelan ring is accused of stealing over $800,000 worth of stimulus checks during the pandemic

US dollars
  • The Miami Herald reported a Venezuelan ring is accused of stealing over $800,000 in stimulus checks.
  • The FBI has been investigating the ring since January, which was also charged with identity theft.
  • Biden has not yet said if more stimulus checks are on the way amidst calls from Democrats urging him to do so.
  • See more stories on Insider’s business page.

Since the start of the pandemic, the government has distributed three rounds of stimulus checks to Americans in order to help prompt economic and financial recovery. But a ring of Venezuelans might have prevented hundreds of people from receiving those checks.

The Miami Herald reported on Wednesday that Venezuelans living in South Florida and Mexico have stolen over $800,000 in stimulus checks since the start of the pandemic, according to federal authorities. The feds have so far charged Jesus Felipe Linares Andrade for conspiring to steal government money, along with identity theft, and prosecutors in South Florida said Linares could have as many as four other “co-conspirators.”

Linares was arrested in May and pleaded not guilty after being caught in an undercover FBI operation in which he, and his conspirators, stole checks in South Florida and Mexico and created fake IDs to correspond with the names of actual US taxpayers.

According to the Herald, an FBI informant met with one of the conspirators in January to discuss cashing about 30 stimulus checks totaling to $36,000. Then, in April, Linares met with two FBI informants to make arrangements to pick up a package with 416 more stimulus checks worth about $249,000.

The meetings continued through April and eventually totaled to over $800,000 in stolen stimulus payments.

“During the meeting [in April], Linares placed an envelope in the vehicle containing over $150,000 in stolen U.S. Treasury checks and over 30 identification documents,” the affidavit wrote. “The identification documents consisted of copies of driver’s licenses, including Florida driver’s licenses. Some of the names on the driver’s license matched the names on the checks.”

Linares is being held without bond.

Although President Joe Biden has not yet announced whether more stimulus checks are en route, studies have shown that the benefits of stimulus checks are significant, with two more checks having the ability to lift an additional 12 million Americans out of poverty.

And a growing number of Democrats are pushing for recurring stimulus payments to sustain economic recovery from the pandemic.

“The pandemic has served as a stark reminder that families and workers need certainty in a crisis,” House Democrats wrote in a letter. “They deserve to know they can put food on the table and keep a roof over their heads. They should not be at the mercy of constantly shifting legislative timelines and ad hoc solutions.”

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1.2 million people still haven’t cashed their first stimulus check

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In this April 23, 2020, file photo, President Donald Trump’s name is seen on a stimulus check issued by the IRS to help combat the adverse economic effects of the COVID-19 outbreak, in San Antonio, Texas.

  • The Boston Herald found that 1.2 million of the $1,200 stimulus checks remain unspent.
  • The IRS said those people either refused to accept, paid back, or haven’t cashed the check.
  • Republicans have suggested using unspent COVID money to fund infrastructure, which Democrats strongly oppose.
  • See more stories on Insider’s business page.

As a growing number of Democrats are pushing for recurring stimulus checks beyond the three that Americans have already received, the Boston Herald found 1.2 million people still haven’t spent their first $1,200 check, from all the way back in March 2020.

Under the CARES Act passed that month, most Americans received a $1,200 stimulus check to help ease the financial pain of the pandemic. The Herald reported on Sunday that 1.2 million people have yet to spend those checks, citing records obtained from the Internal Revenue Service (IRS). The records show that California leads the country with 123,265 unspent stimulus checks, followed by Florida with 92,018 unspent checks.

The IRS told the Herald that the figures reflect “the number of people who either refused to accept, paid back or not cashed the stimulus checks they received from the IRS as a result of the CARES Act that was signed into law on March 27, 2020” by President Donald Trump.

Unspent COVID-19 relief money supports Republican lawmakers’ arguments that more money should not be spent on things like infrastructure until money already allocated from pandemic relief bills gets put to use. For example, House Republican Whip Steve Scalise cited in February the Committee for a Responsible Federal Budget’s COVID Money Tracker that found $1 trillion of pandemic relief funds are unspent.

“There’s over a trillion dollars of money unspent from previous relief bills that were bipartisan,” Scalise said Feb. 21 on ABC’s This Week.

However, the CRFB noted that figuring out how much money is actually unspent is complicated because much of it is already allocated and scheduled to be spent.

More recently, a growing number of GOP-led states have moved to cut off $300 weekly unemployment benefits early, and Sen. Shelley Moore Capito has suggested using those unspent funds to fund infrastructure.

“I think there’s all kinds of different ways that we’re looking at. Certainly repurposing some of those covid dollars,” she told Bloomberg. “I’ve been looking at those 21 states that are no longer paying the enhanced unemployment – why don’t we repurpose those dollars to help those folks coming off unemployment get work in an infrastructure plan.” The White House has dismissed such suggestions.

Even though 1.2 million stimulus checks remain uncashed, a growing number of Democrats are pushing for checks to be recurring, along with extended unemployment benefits, to sustain economic recovery. A recent report from the Economic Security Project found that sending two more rounds of stimulus checks could keep 12 million more Americans out of poverty, which is why in March, 21 senators wrote a letter to Biden advocating for recurring direct payments. Last week, seven House Democrats wrote a similar letter pushing for the same thing.

“The pandemic has served as a stark reminder that families and workers need certainty in a crisis,” the House Democrats wrote. “They deserve to know they can put food on the table and keep a roof over their heads. They should not be at the mercy of constantly shifting legislative timelines and ad hoc solutions.”

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‘Big Short’ investor Michael Burry predicted the inflation spike a year ago – and sounded the alarm multiple times in February

Michael Burry big short

  • Michael Burry predicted post-reopening inflation back in April 2020.
  • “The Big Short” investor warned prices could surge earlier this year too.
  • Burry trumpeted the value of profitable companies during inflationary periods.
  • See more stories on Insider’s business page.

Michael Burry warned the post-pandemic reopening could cause inflation to spike as early as April last year – mere weeks after the first lockdowns in the US. His prediction was proven right this week by data showing consumer prices jumped 4.2% year-on-year last month, the sharpest increase in 11 years.

“When we start working and playing again, inflation may be in store,” the investor told Bloomberg for a story published on April 7 last year.

Burry is best known for anticipating the collapse of the US housing market in the mid-2000s, and making a billion-dollar bet on that outcome. That episode of his career was immortalized in the book and movie “The Big Short.” He also helped lay the groundwork for the meme-stock frenzy earlier this year by investing in GameStop and pushing for changes at the retailer back in 2019.

The Scion Asset Management chief ramped up his inflation warnings in February of this year. He cautioned that stimulus checks, the Federal Reserve’s continued pumping of liquidity into markets, and the reopening of large parts of the economy were likely to drive prices higher.

“Prepare for #inflation,” Burry tweeted on February 19. “#Inflation pressure building. The Fed is monetizing $80 billion of Treasury debt per month, and now comes $Trillions in stimulus/debt + reopening,” he tweeted four days later.

Burry highlighted America’s inflation woes in the 1970s, as well as Weimar Germany’s hyperinflation in the 1920s, as cautionary tales about the risks of soaring prices. He also flagged Warren Buffett’s description of inflation as a “tax on capital,” as it discourages companies from investing by reducing their real returns, and acts as an implicit tax on investors by eating into their purchasing power.

Read more: The founders of a crypto-asset hedge fund break down how ether could overtake bitcoin in market cap – and why the second-largest cryptocurrency will go over at least $25,000 in the short- to medium-term

The Scion chief’s takeaway was that profitable companies shine during inflationary periods.

“Each $ of earnings today becomes important,” he tweeted on February 23. “Earnings 10 and 20 years from now, the corollary goes, may be worth substantially less tomorrow’s today.”

Burry didn’t only raise the alarm on inflation. He also warned the stock market was “dancing on a knife’s edge” in February, and called out Tesla, GameStop, bitcoin, and Robinhood as examples of dangerous speculation in markets.

The investor pledged to stop tweeting in mid-March, citing a visit from federal regulators. He deleted his Twitter profile in April.

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Billionaire ‘bond king’ Jeffrey Gundlach blasted stimulus checks for distorting markets – and warned inflation could threaten stock prices

Jeffrey Gundlach
Jeffrey Gundlach

  • Billionaire investor Jeffrey Gundlach warned stimulus checks are distorting markets.
  • The DoubleLine Capital CEO said sustained inflation could hit stock prices.
  • Gundlach called crypto the “poster child” of the speculative mania in markets.
  • See more stories on Insider’s business page.

Jeffrey Gundlach underlined the risks of excessive federal stimulus in a Yahoo Finance interview this week. He also warned sustained inflation could hammer stock prices, and suggested bitcoin’s recent slump might indicate that market speculation is on the decline.

The billionaire founder and CEO of DoubleLine Capital, whose nickname is the “bond king,” said multiple rounds of stimulus checks have distorted several parts of the economy. They have fueled the sharp rise in US house prices over the past year, he said, and discouraged some recipients from working because they’re “making more money sitting at home watching Netflix.”

“One of the dangers that we’ve opened the door to is these stimulus checks are starting to feel like they might not go away,” Gundlach added.

The DoubleLine boss was caught off-guard by inflation data this week that showed consumer prices jumped the most in 11 years last month. His firm’s models were predicting higher inflation in another month or two, and he still expects the peak to be in July, he said.

“If we keep going higher from there, then I think people are going to be seriously worried,” he continued, explaining that it would rule out a temporary increase in prices due to the economy reopening.

Moreover, sustained inflation could pressure the Federal Reserve into raising interest rates and pumping less liquidity into markets. “That’s gonna be problematic for the valuation of the stock market,” he said.

Gundlach linked the cryptocurrency boom and meme-stock frenzy to stimulus checks later in the interview.

“Gamestop, all these things, a lot of people are just playing with this funny money,” he said. “They feel like they’re playing with the house’s money, so it actually does resemble a casino to them, psychologically.”

Gundlach, who was bullish on bitcoin last year, compared it to the pre-revenue tech startups that went public in the months before the dot-com crash. “Every era of really highly valued markets, after they’ve run a lot, has some sort of a poster child,” he said. “Here I think it’s really these cryptos.”

The investor suggested bitcoin’s recent correction might indicate the rampant speculation in markets has peaked and may now be easing. “Maybe it’s only temporary, but when you’re looking at a speculative fervor, I look for the poster child to roll over last,” he said.

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Jen Psaki says the IRS letter sent to Americans about stimulus checks was ‘not intended to make it about’ Biden

white house press secretary jen psaki
Jen Psaki, the White House press secretary.

  • Jen Psaki defended a letter President Joe Biden sent to Americans about stimulus checks.
  • The letter was “not intended to make it about” Biden, the White House press secretary said.
  • Trump sent a similar letter to Americans when stimulus checks went out during his administration.
  • See more stories on Insider’s business page.

The White House press secretary, Jen Psaki, on Friday defended a letter that President Joe Biden sent to tens of millions of Americans who received a third round of COVID-19 stimulus checks this spring.

The letter, mailed by the Internal Revenue Service and signed by the president, touts his $1.9 trillion American Rescue Plan, which was passed in March, and highlights key provisions of the bill, including $1,400 direct payments, funding for small businesses, and an expanded child tax credit.

“A key part of the American Rescue Plan is direct payments of $1,400 per person for most American households,” Biden wrote in the letter obtained by Insider. “This fulfills a promise I made to you, and will help get Americans through the crisis.”

The letter is “pretty standard” and was “not intended to make it about him,” Psaki told reporters during a press conference on Friday. “It’s about the American people.”

Psaki said the letter “goes out with physical checks.” But people who got the federal aid through direct deposit have also received the letter. The IRS said all recipients of the third payment will get the letter, which “should be kept with tax year 2021 records.”

Psaki’s comments come after some have criticized the letter as an act of self-promotion and compared Biden’s move to that of his predecessor, President Donald Trump, who sent a similar IRS letter to Americans about coronavirus stimulus checks enacted during his administration.

Biden’s letter appears identical in format to the one Trump sent last spring. Both letters were mailed by the IRS, displayed the White House letterhead, are signed by the president, and addressed to “My fellow American.”

But Biden did not include his signature directly on the stimulus checks, which Trump did – a decision that may have delayed their delivery to the public. “We didn’t have [Biden] sign the checks because we were concerned about any impact that would have on delaying them going out to the public,” Psaki reiterated on Friday.

At the time, Trump’s letter prompted criticism that he was politicizing the IRS for his benefit. Citizens for Responsibility and Ethics in Washington, a government watchdog group, called Trump’s letter “self-aggrandizing.”

The organization reacted negatively to Biden’s letter as well.

“This trend toward presidents sending self-serving signed letters at taxpayer expense is unfortunate regardless of who does it,” said Noah Bookbinder, CREW’s president. “I hope that President Biden will not learn the wrong lessons from his predecessor and continue this kind of tactic.”

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Mitch McConnell claims Biden’s stimulus benefits are setting back the economic recovery

Mitch McConnell
Senate Minority Leader Mitch McConnell.

  • McConnell claimed on Thursday that Biden’s stimulus benefits are causing worker shortages.
  • “We have flooded the zone with checks that I’m sure everybody loves to get, and also enhanced unemployment,” he said.
  • Some economists say a labor shortage would cause wages to rise, but that hasn’t happened yet.
  • See more stories on Insider’s business page.

Senate Minority Leader Mitch McConnell on Thursday faulted the Biden administration for approving stimulus benefits, and claimed they are hurting the nation’s economic recovery.

“We have flooded the zone with checks that I’m sure everybody loves to get, and also enhanced unemployment,” McConnell said from Kentucky. “And what I hear from businesspeople, hospitals, educators, everybody across the state all week is, regretfully, it’s actually more lucrative for many Kentuckians and Americans to not work than work.”

He went on: “So we have a workforce shortage and we have raising inflation, both directly related to this recent bill that just passed.”

McConnell’s comments reflect longstanding GOP concerns about disincentivizing people from returning work as a result of issuing direct payments and federal unemployment benefits. Democrats approved a massive $1.9 trillion stimulus package in March, arguing many households needed immediate financial aid from the government.

No Republicans voted for the relief package. The unemployment rate has steadily fallen to 6%, and new claims have dropped for four weeks in a row.

But employers are growing alarmed over worker shortages, particularly those in the restaurant sector, while shortages of commodity goods are causing massive price increases in certain pockets of the economy. The trends caused the White House to defend its policies on Thursday. White House Deputy Press Secretary Karine Jean-Pierre said there was “little evidence” that enhanced unemployment insurance was enticing people away from work.

Some economists note that a key feature of a labor shortage – rising wages – is not in evidence, as businesses typically take that step to lure job-seekers from a scarce pool.

“When you don’t see wages growing to reflect that dynamic, you can be fairly certain that labor shortages, though possibly happening in some places, are not a driving feature of the labor market,” Heidi Shierholz, economist and director of policy at the left-leaning Economic Policy Institute, wrote on Twitter. “And right now, wages are not growing at a rapid pace.”

Federal Reserve Chairman Jerome Powell weighed in on the issue last week at a press conference. He said potential factors that could explain the shortage include a lack of childcare, lingering COVID-19 fears, and school closures.

“We don’t see wages moving up yet. And presumably we would see that in a really tight labor market,” Powell said. “And we may well start to see that.”

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30 million people may now get their $1,400 stimulus checks after the Social Security Administration released new information

Richard Neal
Rep. Richard Neal (D-MA).

  • 30 million people on Social Security and Supplemental Security incomes haven’t gotten stimulus checks yet.
  • That’s because the SSA wasn’t sending necessary payment information to the IRS.
  • Top House Democrats gave the SSA 24 hours to provide it, and the IRS got it Thursday morning.
  • See more stories on Insider’s business page.

Following a 24-hour ultimatum from Democratic lawmakers, the Social Security Administration provided information to the Internal Revenue Service on Thursday that will help more Americans get stimulus payments.

Nearly 30 million Social Security and Supplemental Security income beneficiaries were kept waiting on stimulus payments because, House Democrats said, the SSA hadn’t provided the Internal Revenue Service with necessary payment files for them.

On Wednesday, the chair of the House Ways and Means Committee, Richard Neal, and the chair of the House Oversight Subcommittee, Bill Pascrell, Jr., sent a letter to the SSA requesting that information be sent over right away. “We are giving the trump-appointed heads of the Social Security Admin **24 Hours** to get off their backsides and stop delaying sending stimulus checks to 30,000,000 Americans,” Pascrell said on Twitter on Wednesday.

On Thursday, the SSA transferred the necessary files to the IRS, making it possible for the affected Americans to get the $1,400 stimulus checks that many others have already received.

“The delays imposed by Commissioner Saul defied congressional intent and imposed needless anxiety and pain on taxpayers,” the Democrats said in a statement on Thursday. “Now the IRS needs to do its job and get these overdue payments out to suffering Americans. Further delays will not be tolerated by this committee.”

Rep. John Larson of Connecticut and Rep. Danny Davis of Illinois had joined Neal and Pascrell in calling for action from the SSA and IRS.

Since President Joe Biden’s stimulus bill was signed into law, Americans across the country have encountered delays in receiving stimulus aid. Due to December and March stimulus changes, the IRS was behind in processing nearly 7 million tax returns, and customers of major online tax preparers, such as TurboTax and H&R Block, faced delays on the $10,200 tax break on unemployment benefits received during the pandemic.

As a result of the delays, along with calls from lawmakers, the IRS extended tax filing season to May 17, which Neal and Pascrell said would lift the “titanic strain” on taxpayers.

The Treasury Department, IRS, and Bureau of Fiscal Service announced on Wednesday that 127 million of the $1,400 stimulus checks have been sent out to date.

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People who don’t get a $1,400 direct payment by March 24 can expect mailed checks, Treasury says

coronavirus relief bill cares act stimulus check
  • Treasury said people waiting for $1,400 stimulus payments on March 24 can expect theirs by mail or prepaid debit card.
  • The IRS and Treasury are moving swiftly to issue tens of millions of direct payments.
  • Singles earning up to $75,000 in adjusted gross income qualify for the full amount.

Americans who don’t receive a $1,400 direct deposit by March 24 can expect either a mailed check or a prepaid debit card, according to the Treasury Department.

The cabinet agency said in a statement that a second round of stimulus checks were sent out on Friday with a pay date of Wednesday, March 24. People waiting for checks after that date will likely receive theirs by mail.

“Taxpayers who do not receive a direct deposit by March 24 should watch the mail carefully in the coming weeks for a paper check or a prepaid debit card, known as an Economic Impact Payment Card, or EIP Card,” Treasury said on Monday.

The Biden administration along with Congress approved $1,400 stimulus checks earlier this month, the third wave of federal payouts over the last year. The IRS started issuing the payments only a day after the rescue package was signed into law.

The Treasury Department said on Wednesday it had already deposited 90 million checks, amounting to $242 billion. It also said 150,000 paper checks were mailed.

Singles earning up to $75,000 in adjusted gross income qualify for the full amount, along with couples making up to $150,000. Each adult dependent is eligible for a check as well.

But the stimulus check amounts shrink much more quickly above those thresholds. Individuals earning more than $80,000 and couples making above $160,000 will receive zero.

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