As expected, the House passed a $2 trillion relief bill on Friday benefiting US taxpayers and businesses impacted by the COVID-19 virus. Next, the bill is expected to be immediately signed by President Trump. The bill unanimously passed the Senate on Wednesday (96-0) despite the GOP drama. Sen. Lindsey Graham (R-S.C.) and others felt the bill incentivized citizens to not go back to work because the payouts they will receive may be greater than their average paychecks. This bill is the largest stimulus relief bill in US history.
Many would agree the relief package is a step in the right direction for the US economy, although it will not head off the huge surge in unemployment filings. A record 3.3 million people filed claims for unemployment in the US last week as the COVID-19 pandemic shut down large parts of the US economy and the full scale of the impact of the crisis began to emerge. US Treasury Secretary Steve Mnuchin has predicted unemployment in the US – which was close to record lows just last month – could reach as high as 20%.
Key elements of the package include sending checks directly to individuals and families, a major expansion of unemployment benefits, financial assistance for small businesses, and $500 billion in loans for distressed companies. The bill includes almost $400 billion to help small businesses retain their payrolls and $250 billion to boost unemployment insurance, offering $600 per week for four months for laid-off workers, on top of whatever benefits their states may provide.
It contains hundreds of billions of dollars in emergency federal aid for large corporations. However, businesses receiving the loan cannot cut their employment levels by more than 10 percent until September 30, 2020. There are some additional restrictions on executive compensation above $425,000 annually and companies cannot issue stock buybacks.
Specifically, the hospital industry is receiving $100 billion in rescue funds; however, the oil industry is getting nothing, and neither are cruise companies. The bill will provide $25 billion in grants and $25 billion in loans to passenger airlines; $17 billion in loans to industries deemed critical to “national security” — a provision specifically aimed at helping Boeing — and $425 billion in loans and loan guarantees for other large firms, a fund for which cities and states can also apply.
US taxpaying residents with an adjusted gross income of up to $75,000 can expect a $1,200 payment. Couples with an adjusted gross income of up to $150,000 will receive a $2,400 payment. There are also $500 payments for children included in the bill. People with incomes above $99,000 are not eligible, and the total benefit is phased out for people earning between $75,000 and $99,000.
It can be hard to make sense of all the new legislation passed in the wake of COVID-19. Contact us to help you navigate through this pandemic. Check out our COVID-19 Resources page for more information.