The Senate finally approved the $2.2 trillion coronavirus stimulus package. The bill is set to be the largest federal spending bill in our history as a nation. The deal comes after Democrats fought for more oversight of the $500 billion relief fund for distressed industries and greater protections for workers. The bill is an estimated $400 billion more than the stimulus they rejected last week. The number of infected cases continues to rise and the death toll crept over 1000 on Wednesday. The lockdowns and economic disruption will likely carry on unabated. Now the bill heads to the House where it is expected to pass before President Trump signs it.
Here are the key provisions of the bill:
STIMULUS CHECKS
The government will send a one-time payment of $1200 to individuals who made under $75K. Married couples can receive $2400 and an additional $500 will be made available per child. The size of the stimulus checks will phase out for individuals making over $99K. The checks are being distributed as tax refunds to everyone with a valid SSN. Eligibility will be based on 2018 and 2019 tax returns. The bill will also waive the 10% early withdrawal penalty for early distributions up to $100,000 from 401(k)s and IRAs for coronavirus-related purposes. There are currently no plans for future direct payments if the economic disruption continues into late spring/early summer. Some economists and senators, including Bernie Sanders, argued for checks up to $4000. The total estimate for these payouts will be around $301 billion.
UNEMPLOYED, SELF-EMPLOYED, AND GIG ECONOMY WORKERS
$250 billion will be used to expand unemployment benefits. An additional $600 per week will be added to payments across the board until July. There will also be an additional 13 weeks of benefits beyond what states typically allow for those in need. These will be extended to self-employed and independent contractors as well, so Uber drivers and other gig economy workers are covered. This comes at a time when unemployment offices around the country are seeing an unprecedented spike in claims. Many applicants for unemployment are not covered under typical state unemployment laws either. This package aims to keep these workers afloat during this difficult time.
BIG BUSINESSES AND DISTRESSED INDUSTRIES
Big businesses, states, and municipalities will have access to $500 billion in loans. The airline industry will receive over $50 billion to keep companies afloat and to cover employee wages. There will also be safeguards in place to protect against abuse. Employee and executive compensation cannot exceed $425K, stock buybacks are prohibited for the duration of the loan, and the government may be able to up a stake in some companies.
SMALL BUSINESSES AND HEALTHCARE
Small businesses will have access to $349 billion in loans to be spent on payroll, rent, or utilities. There are also provisions in place to reward firms that maintain payroll, such as debt forgiveness. The healthcare system will also see an injection of $140 billion, with the biggest (and best) news being that testing and the purchase of potential vaccines for COVID-19 will be covered at no cost to patients.
For more information, you can check out the summaries of the bill’s policies for individuals, unemployment, small businesses, health, and distressed industries.