Congress has passed a stimulus package to aid Americans as the coronavirus continues to adversely affect the economy. At $2.2 trillion, it is one of the most expensive and largest pieces of legislation to come through the modern congress.
The legislation addresses the mounting economic crisis from multiple angles providing aid both to workers directly and to businesses. Below is a breakdown of what’s included in the bill and the next steps Congress should take to ensure working Americans can navigate this crisis.
$1,200 checks for millions of Americans: Taxpayers will receive $1,200 per adult and $500 per child. Those earning over $75,000 annually ($150,000 for a couple filing jointly) will be smaller. Individuals earning over $90,000 will not receive any benefit. Benefit eligibility will be determined by 2019 or 2018 tax returns.
Increase in unemployment insurance benefits: The plan overhauls the existing unemployment and extends unemployment benefits to people who may have been fired but are unable to work because of the coronavirus. It also provides an additional $600 per week payment in addition to the usual $300.
Aid to large businesses and new oversight measures: This provision, in its original form, held up the stimulus package from being passed on Sunday. It includes aid for “severely distressed industries” in the form of $25 billion in grants for passenger airlines; $25 billion in loans for passenger airlines; $17 billion for companies deemed critical to national security; and $425 billion for other businesses, cities and states, allocated through funding mechanisms set up by the Federal Reserve. It’s worth noting that the $17 billion for companies deemed critical to national security was essentially included to specifically help aerospace manufacturing giant Boeing. What was initially deemed a “corporate slush fund” now includes more oversight and reporting into who is receiving these funds and why. It also prohibits funding to benefit the president, vice president, Cabinet members or congressional lawmakers, and federal officials’ relatives. It will also be required to go through the Federal Reserve’s lending facilities, the same system used during the 2008-2009 financial crisis.
Emergency aid for small businesses: The legislation helps small companies that employ less than 500 people through generous zero-interest loans. The loans can be forgiven if these companies adhere to certain conditions like not firing their workers. Also included are close to $400 billion in loans made available through lenders certified by the Small Business Administration, like banks and credit unions. The maximum loan is capped at $10 million. The loans convert to grants if used for covering employee salaries, rent, paid leave, utility payments, health insurance premiums or other necessities or worker protections. It also includes guardrails to prevent business owners from pocketing the money being lent. Loans provided to businesses like bars and restaurants with tipped employees could be forgiven if they are used to provide additional wages to employees. Nonprofits are also eligible.
It also includes numerous tax benefits to help ease the burden small businesses could face. It grants firms the ability to deduct 50% off their interest, up 20% from the amount allowed in the 2017 Republican Tax law. It also gives them greater ability to deduct losses against taxable income. Payroll taxes will also be delayed. It also provides numerous delays on corporate and business taxes and would allow the hospitality industry to immediately write off the octs of building improvements.
Expanding spending for hospitals and health-care- Hundreds of billions of dollars will go to help prepare America’s healthcare system for the influx of patients likely to occur in the next couple of weeks. The money can be used for protective gear for healthcare workers, testing supplies, and emergency operation centers. The legislation also increases funding for community health centers, medicare payments, telehealth and home services, and public health agencies like the Center for Disease Control and Prevention.
Emergency Aid for State and Local Governments- The federal aid package allocates $150 billion to state and local governments and $8 billion to tribal governments. Each state will receive a minimum of $1.5 billion and includes $25 billion for infrastructure grants.
Remaining spending includes $45 billion for the Federal Emergency Management Agency’s disaster relief fund; $31 billion to support local schools and colleges; $25 billion for the nation’s transit systems; and $25 billion for more food stamp funding.