Robbins: What the $2 trillion coronavirus stimulus package provides
When I was a kid, on a rainy day, a bunch of us would gather at the Merritts. The Merritts had the widest TV screen in the neighborhood. If memory serves, it was a console with a 27-inch screen.
The kids would settle on the living room couch and sprawl out on the floor and Mrs. Merritt would pass out Jiffy Pop, Bugles and Whistles, Lorna Doones, Chips Ahoy! and Hawaiian Punch. Invariably, it was a western we would watch.
The plot was always pretty much the same and, of course, the climax was when the cavalry arrived to rescue the outnumbered and bedraggled settlers from some savage threat. Most times, there was a pretty girl who gushingly threw herself against the handsome captain with a breathy “Thank you!” or “My hero!”
Here comes the cavalry
What’s old is new again. Except the “calvary,” circa 2020 — the Year of the Great COVID Pandemic — looks more like Mitch McConnell’s and Nancy Pelosi’s gangs. But “rescue” nonetheless has at last arrived.
On March 27 in year one of the GCP, Congress acted. Boy, did they act. To the tune of $2.2 trillion. $2,200,000,000,000. Borrowing from the president’s lexicon, that’s a “tremendous bigly number.” So what is all that moola intended to do?
Called the Coronavirus Aid, Relief, and Economic Security Act, here are some of the highlights:
$500 billion in loans and guarantees allocated to businesses, state and local governments
This half-a-trillion dollar “bite” includes up to $50 billion for passenger airlines and $8 billion for air cargo carriers. Half of the money is specifically earmarked for paying workers. $17 billion will go to “businesses critical to maintaining national security.”
Companies accepting loans may not repurchase outstanding stock or pay dividends until one year after the borrowing is repaid. What’s more, those companies must maintain the employment levels they had on March 24, 2020, “to the extent practicable” through September 30, and may not cut jobs by more than 10% from that level. Neither may they give raises to executives earning over $425,000 annually until the loan is repaid. Companies are not eligible for loans if top Trump administration officials, members of Congress or their families have 20% or greater control.
$350 billion to small businesses
The stimulus bill provides for $350 billion in loans for “small” businesses (companies with 500 or fewer employees), including nonprofits, the self-employed, and hotel and restaurant chains with up to 500 workers per location. The government will provide eight weeks of cash assistance through loans to cover payroll, rent and other expenses. Much or all of these loans will be converted to grants if the company retains its workers. Another $17 billion will go to help small businesses repay existing loans and $10 billion is allocated for grants up to $10,000 for small businesses to pay operating costs.
Go here to apply: https://www.sba.gov/funding-programs/disaster-assistance.
$260 billion in emergency unemployment insurance
Weekly benefits will increase up to $600 for four months. There will also be an extra 13 weeks of coverage for people who have exhausted existing benefits. The benefit will also encompass part-time workers, the self-employed, and “gig economy” workers.
$150 billion for health care
Yep, $150 billion goes directly to health care. This includes $100 billion for grants to hospitals, public and nonprofit health organizations, and Medicare and Medicaid suppliers.
$150 billion in aid to state and local governments
Of this amount, at least $1.25 billion will go to each state.
$45 billion for the Department of Homeland Security
This money will be used as a disaster relief fund to reimburse state and local governments for medical response, community services, and other safety measures. An appendage to this allocation is that the deadline for people to get driver’s licenses with the enhanced security features, known as the REAL ID, is extended from Oct. 1 of this year to Sept. 30 of next year.
There is $31 billion earmarked for education. This includes $13.5 billion for states to distribute to local schools and programs and $14 billion for universities and colleges. There is $27 billion that goes to COVID-19 treatment. This money is intended to fund research and development of vaccines and treatments and to stockpile necessary medical supplies. There is $25 billion directed to public transit systems; $10 billion for publicly owned commercial airports which is intended to sustain nearly half-a-million transit jobs. Another $1 billion goes to Amtrak.
For veteran’s needs, there is $20 billion, and another $16 billion for treating veterans at VA hospitals and $3 billion for temporary and mobile facilities. There is also $15.5 billion allocated for food stamps; $14 billion for supporting farm income and crop prices; $9.5 billion for “specific producers” including specialty crops, dairy and livestock; and $8.8 billion for child nutrition. There is also money allocated for food banks and farmers’ markets.
Another $10.5 billion will go to the Department of Defense, including $1.5 billion to nearly triple the 4,300 currently available beds in military hospitals. Another $1.4 billion will go to states to deploy up to 20,000 members of the National Guard for six months. Another $1 billion under the Defense Production Act will help private industry boost production of medical gear. These monies may not be used to build the president’s proposed border wall.
There is $3.5 billion earmarked for childcare and early education. There is money for social programs including $3.5 billion in grants for child care and early education programs; $1 billion in grants to aid communities in addressing local economic problems; $900 million in heating/cooling assistance for low-income families; and $750 million for extra staffing for Head Start programs.
Another $5 billion in community development “block grants” will provide economic aid to communities and help state and local governments expand health facilities, child care centers, food banks and senior services. There is $4 billion in assistance for the homeless; $3 billion for low-income renters; $1.5 billion to help communities rebuild local industries including tourism; and $300 million for the fishing industry.
There is $2 billion allotted for Native American communities for health care, equipment, schools and other needs. Another $1.1 billion will be set aside for diplomacy, including $324 million to evacuate Americans and diplomats overseas; $350 million to help refugees; $258 million in international disaster aid; and $88 million for the Peace Corps to evacuate its overseas volunteers.
Even “smaller” grants
The bill provides for $400 million to help states prepare for 2020 elections, including expanded mail-in voting. There is $150 million in federal grants appropriated in support of the arts and $75 million for Corporation for Public Broadcasting. Another $93 million goes to Congress for the costs of teleworking, cleaning the Capitol and congressional office buildings, and other costs.
Money in your pocket
Although it will be on a sliding scale depending on your income, checks will go out for up to $3,400 for a family of four. A one-time payment is scheduled for up to $1,200 per adult ($2,400 per couple) and $500 per child. Amounts begin phasing out at $75,000 for individuals ($150,000 per couple).
There are also tax breaks. Penalties for virus-related early withdrawals from retirement funds are temporarily waived and required minimum annual disbursements from some retirement accounts will be eased. Increased deductions for charitable contributions are provided for. Employers who pay furloughed workers may be eligible for tax credits for at least some of those payments. Business payments of payroll taxes are postponed until 2021 or 2022. Additionally, student loan repayments may be deferred until Sept. 30 without penalty.
Collectively, this is the largest stimulus bill in U.S. history. The foregoing are just the highlights. The bill itself runs to more than 800 pages.
The cavalry has arrived.
Let’s hope that it’s enough.