by Lilian Kyle
While the world has been reeling from the impact of the COVID-19 virus, Congress has been working to provide relief for those affected, and supply sorely needed stimulus for the American Economy. In an attempt to lessen the impact and provide a bit of relief to American workers and businesses, the Senate unanimously passed a massive $2 trillion stimulus package late Wednesday night. Its approval in the House, however, was far from certain as both parties argued over their vision for the format the stimulus should take. However, after much debate, the House approved the stimulus package today making it the third measure passed by Congress in response to COVID19 and the largest economic rescue package in U.S. history. President Donald J. Trump assured Americans earlier this week that if the bill was approved by Congress, he would gladly sign it.
The stimulus package is set to provide billions in credit for struggling industries, boost unemployment insurance, and provide direct cash payments to over 90% of American adults. According to the bill, American adults who made $75,000 or less in 2019 will receive checks for $1,200. Couples who filed jointly and made $150,000 or less will receive $2,400. An individual who filed as “head of household” and earned up to $112,500, will receive $1,200. Finally, for every child in a household, an additional $500 will be received. However, there are limitations to the package. If someone makes more than $75,000, their payment will be reduced by $5 for every $100 of income that exceeds the limits. For example, if someone made $80,000 in 2019, they will receive $950. Individuals that make over $99,000 and couples that make over $198,000 will not receive any funds. The maximum payment a family of four will be eligible to receive is $3,400.
Treasury Secretary, Steven Mnuchin, said that checks will be sent out within three weeks to all of whom the IRS has information for. If someone has been working and paying taxes since 2018, there is no need to sign up or fill out a form to receive a check. Those who are on Social Security and don’t make enough to file a tax return will also be receiving a check. Unfortunately, college students who are still claimed as dependents on their parents’ taxes are ineligible.
In addition to these payments, the stimulus package will also provide roughly $100 billion in assistance for hospitals; $350 billion in assistance to small businesses; $500 billion in aid for corporations, including airlines and cruise lines hurt by the outbreak; and $150 billion for state and local stimulus funds. Unemployment insurance will also be boosted by the package for four months by increasing payments and extending the benefit to those who typically do not qualify. The bill is set to increase the maximum unemployment benefit that a state gives a person by $600 per week and ensure that laid-off workers, on average, will receive their full pay for four months. Any businesses controlled by President Trump, Vice President Mike Pence, members of Congress and heads of executive departments are prohibited from receiving any loans or investments from Treasury programs.
The stimulus package has a number of provisions set in place to help aid small businesses during this grueling time. Some small business concerns will be eligible for federal-guaranteed emergency “Paycheck Protection Program” (PPP) interest-bearing, non-recourse loans for business interruption due to COVID-19. This will allow borrowers to cover payroll costs of employees, making less than $100,000, and other working capital expenses not already covered by previous federal relief laws. Small businesses that are eligible for these loans will be covered from February 15th through June 30th. In addition, borrowers who demonstrate that loan proceeds were used for eligible purposes, including payroll/benefits, mortgage interest, rent, and utilities, are eligible for loan forgiveness on the PPP loan total.
The stimulus package is the third emergency legislation that Congress has approved to combat the coronavirus outbreak. The other emergency legislation includes an $8.3 billion bill for health agencies and a roughly $100 billion bill aimed at providing free coronavirus testing, some paid leave and unemployment benefits, as well as additional Medicaid funding and food assistance.
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