Senate Majority Leader Mitch McConnell. (AP)

Washington – Residents of Puerto Rico with an income of less than $75,000 would receive a $1,200 in cash payments as part of the U.S. Senate Republicans' proposal to boost the economy amidst the emergency caused by the coronavirus.

This relief would increase to $2,400 for married couples filing jointly, and another $500 for every child.

Last night, the Senate Republican leadership unveiled the proposal - which includes generous tax cuts for corporations and reviews paid family leave - as part of the third stage of the federal response to the coronavirus crisis.

Since the bill has only been discussed with the White House, Senate Republican Majority Leader Mitch McConnell (Kentucky) acknowledged that he now has to sit down and negotiate with Democrats.

Thus, he urged those talks to begin today. "The Senate is not going anywhere until we act," McConnell said.

For those with limited federal income tax liability, the bill proposes a $600 check, the same amount suggested for Social Security and military pensioners.

Cash payment for individuals who would have access to the $1,200 decreases for those who earned $75,000 or more in 2018 and is not available for those who earned over $99,000.

For couples, the $2,400 check decreases if they had income in 2018 of $150,000 or more, and it is not available if they made $198,000.

For a taxpayer, the refund is reduced by $5 for every additional $100 above $75,000. The same applies to couples with incomes of $150,000 or higher.

In the case of Puerto Rico, the language replicates that allowed island residents to receive a federal check during the 2008 financial crisis.

"Preventing the spread of the coronavirus will take a financial toll on individuals, families, and businesses. These recommendations would blunt the impact for most Americans and limit the damage to the U.S. economy," said Senate Finance Committee Chairman Charles Grassley, R-CA.

The proposal was first unveiled by Senator Grassley along with Republican Majority Leader John Thune (South Dakota) and Tim Scott (South Carolina), Rob Portman (Ohio), Tom Cotton (Arizona) and Mitt Romney (Utah), with McConnell's endorsement.

It also includes language to delay the date for U.S. taxpayers to file their returns until July 15. Previously, the Donald Trump administration said it would allow deferral of tax payments by individuals - up to $1 million - and corporations, until July 15.

Trump wanted the cash payment to U.S. citizens to reach $2,000 in two installments, one on April 6 and the other on May 18. But Treasury Secretary Steve Mnuchin warned the measure was being negotiated with the Senate Republican leadership.

Democrats believe the legislation should be focused on workers and the check to citizens should be larger, as part of a "Marshall plan" - like the one implemented for rebuilding Western Europe after World War II.

"The number one priority is addressing this health crisis, which requires a Marshall Plan to rebuild our health care infrastructure on a continental scale and ensure the resources are there to test and treat everyone who needs it," said U.S. House Speaker Nancy Pelosi and Senate Minority Leader Charles Schumer.

In a joint statement, Pelosi and Schumer added that "To earn Democratic support in the Congress, any economic stimulus proposal must include new, strong and strict provisions that prioritize and protect workers, such as banning the recipient companies from buying back stock, rewarding executives and laying off workers."

Under the proposal of the House Financial Services Committee Chairwoman Democrat Maxine Waters (California), citizens would receive a check of up to $2,000 per month, and $1,000 for every child, as long as the crisis lasts.

Waters has made it clear in a memo that any legislation would apply to Puerto Rico and the other U.S. territories. He also said the Federal Reserve should support "state, territory, and local debt issuance in response to the coronavirus outbreak."

The Senate proposal is about $1 trillion, but the Democrats´proposal could exceed that figure by far.

Economist José Caraballo Cueto, a professor at the University of Puerto Rico (UPR) Cayey Campus, said giving money directly to people, instead of a reduction in Social Security payroll, is an appropriate step.

"Reducing the payroll tax didn't reach everyone. It's better (a stimulus based on) a universal basic income. This has to be the beginning of an economic stimulus package. My message to citizens is to use it wisely for essential items," Caraballo Cueto said.

💬See 0 comments