The Senate returned to Capitol Hill on Monday to discuss policy options for the second COVID-19 stimulus payments amid massive protests in several U.S. cities. 

According to the Wall Street Journal, the Trump administration has assembled a set of proposals which aims to jump-start the economy by encouraging U.S. residents to go out to restaurants, return to work, and take vacations. 

The House passed the fourth and final COVID-19 relief package mid-May. The Heroes Act proposal includes hazard pay for essential workers, funding for state, local and tribal governments, housing assistance for renters and homeowners, and funding for COVID-19 efforts-including testing, contact tracing, and research.

Democrats vs Republicans

The president and his allies may face another clash with Democrats who hold a different opinion on what should be included in the next stimulus check. 

The Democrats are pushing another round of relief package to households as well as extend the enhanced unemployment benefits set to expire at the end of the month. They are also pushing to provide states that are facing budget shortfalls with additional aid. Senate Democratic leader Chuck Schumer encouraged other lawmakers to consider granting more flexibility to small businesses after many have been looted and destroyed during the riots. 

On the other hand, Republican lawmakers called for incentives to encourage people to return to work. Employers will also be given liability protections from pandemic-related lawsuits. 

Details about the next legislative package have not yet been released. However, Republicans estimate the final check to amount to as high as $1 trillion. The size and scope of the stimulus payment will depend on the success of reopening efforts and the economic trend. 

Possible Policies

According to officials, the Trump administration is considering reducing the payments to $300 a week. Another option would be to ensure workers would earn more than 40 percent of what they would receive in weekly unemployment benefits by setting the payments as a share of their salaries. However, the latter option would present a new set of challenges to states that have been overwhelmed by a surge of new applicants. 

The payment reduction proposal comes after Republicans expressed concern that the unemployment insurance may discourage workers from returning to their jobs. Republican senators claimed the amount of money from the benefits could surpass what some workers earn on a weekly basis. 

Besides the payment reduction, officials claim the administration is also considering a tourism tax deduction or tax credit for people who take a vacation within the country in the coming months. Investors may also see a capital-gains tax cut. 

According to the president's economic advisers, the administration will prioritize encouraging companies to conduct business in the country by making permanent provisions that will allow companies to deduct the cost of capital spending, including relocating from other nations. 

Want to read more?