The United States Senate, after days of discussions with the White House, on Wednesday passed an unprecedented emergency bill that would send some $2 trillion in aid to businesses, workers, state and local governments and a healthcare system overwhelmed by the coronavirus pandemic.
If approved by the US House of Representatives as written, it would represent the largest economic stimulus package in US history. The sprawling, 900-page measure is the third coronavirus response bill produced by Congress and by far the largest, building on earlier efforts focused on vaccines and emergency response, sick and family medical leave for workers, and food aid.
The bill now goes to the Democrat-controlled lower house for approval. House Speaker Nancy Pelosi said on Thursday that the House would move quickly on Friday to pass the bill and get it to President Donald Trump’s desk for his signature.
Here is a breakdown of who gets what from the massive aid package.
The package would provide one-time direct payments of $1,200 to every American adult making less than $75,000 a year, and $2,400 to couples with household incomes below $150,000, with $500 payments for each child under the age of 17. The payments phase out for those with adjusted gross incomes over $75,000 ($150,000 for couples), and are eliminated entirely for those earning more than $99,000 for singles and $198,000 for couples.
Rules on unemployment compensation are tweaked to give workers an additional $600 per week on top of state benefits that range between $200 and $550 a week depending on the state. The federal government will add 13 weeks to the amount of time unemployed workers will be able to collect benefits. Currently, workers are allowed to collect benefits for between 12 and 28 weeks, depending on the state. Additionally, those who wouldn’t normally be eligible for benefits – independent contractors, the self-employed and gig workers such as Uber drivers and delivery personnel – will be eligible.
The US Department of Education is allowing holders of federal student loans to defer payments until September 30 with no penalties, and people with 401K or retirement savings accounts would be able to withdraw funds from those accounts without paying the 10 percent penalty for early withdrawals.
The bill also bans lenders from foreclosing on federally backed mortgages through mid-May and imposes a four-month ban on evictions by landlords who rely on federal housing programmes.
The package includes nearly $25bn in food assistance, including $16bn for the Supplemental Nutrition Assistance Program, or SNAP, also known as food stamps, and $9bn for child nutrition programmes. Additionally, the bill provides $450m for the Emergency Food Assistance Program, which supplies food banks, $350m of which would go toward additional food and $100m of which would be channeled to distribution efforts. An additional $200m is provided for food assistance in Puerto Rico and other US territories, as well as $100m food distribution on Native American reservations.
The US Treasury Department will be authorised to provide up to $500bn in loans, loan guarantees and investments to companies both large and small. The money comes with catches, however. Businesses that receive the money may not issue dividends for up to a year beyond the date the loans are repaid, and must retain 90 percent of the employees on their payroll as of March 24 “to the extent practicable” through September 30. The loans must be repaid within five years. There are also limits on executive compensation at companies accepting the aid, and prohibitions on using the money for stock buy-backs.
Some of the money is directed at specific industries. Airlines, for example, will get $29bn in grants and $29bn in loans and loan guarantees, as well as a reprieve on excise and fuel taxes. Half of the money is devoted explicitly to employees’ wages, salaries and benefits. Strings on the assistance include limits on executive compensation and stock buy-backs.
Up to $17bn of the money is directed at companies involved in “national security”, which is being widely interpreted as intended for planemaker Boeing.
Farmers will get up to $14bn in aid via the Commodity Credit Corporation to offset losses in that sector. Additionally, the US Department of Agriculture will receive $9.5bn to provide emergency aid for cattle ranchers, fresh fruit and vegetable growers, and others in the agricultural sector.
One business that will not be benefitting from the package is the chain of hotels and resorts owned by Trump. Legislators inserted language into the bill that precludes companies majority-owned or controlled by any prominent figure in either the executive or legislative branches of government, including cabinet members and members of Congress, from tapping into the government loans or investments.
A total of $377bn has been allocated to offer loans and grants to small businesses with 500 or fewer employees. To encourage the distribution of these loans, banks would earn a 5 percent fee for making the loans. Payments can be deferred up to a year, and the loans could be partially forgiven if the money is used to pay employee salaries, rent, mortgage interest or utilities.
The bill also allocated $17bn to defer existing payments on Small Business Administration loans and $10bn in emergency grants to small businesses.
The bill includes $100bn in grants for hospitals and other healthcare providers to help them cope with the crisis and to make up for revenue they lost by delaying other procedures. They will also receive a 20 percent increase in Medicare payments for treating patients with the virus.
As much as $45bn is directed at the US Federal Emergency Management Agency’s Disaster Relief Fund for state and local efforts to combat the virus, including for protective equipment.
State and local governments will get $150bn to cover costs associated with the virus, to be distributed based on each state’s proportion of the total US population. No state shall receive less than $1.25bn, and local governments that serve populations of more than 500,000 will be eligible.
State and local governments will also receive $400m in grants to cover the costs of shifting elections away from polling centres to remote methods such as voting by mail.
Some $30bn in aid is directed toward the education sector, including colleges and universities and local school districts.