About five months ago, the severity of the 2019 coronavirus pandemic (COVID-19) came into focus. States were early in the process of developing non-essential business location plans, and deaths associated with COVID-19 began to tick noticeably higher in the United States. It was this emerging physical and financial toll that prompted lawmakers to pass the Aid, Relief, and Economic Security (CARES) Coronavirus Act on March 27th.
The CARES Act failed at the individual level
At $ 2.2 trillion, the CARES law was higher than any previous aid plan ever to be passed in Washington, DC. For some contexts, it was nearly three times the cost of the relief plan undertaken under the Obama administration to support banks and the U.S. economy in the wake of the financial crisis.
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This boatload of cash was paid out through a slew of channels. Approximately $ 500 billion was used to support emergency businesses, with close to $ 350 billion raised for loans for payment protection program (PPP) to small businesses. Hospitals also received roughly $ 100 billion, and the unemployment program netted $ 260 billion to increase benefits (that is, the extra $ 600 payout per week) for a four-month stretch (April 1, 2020 to July 31, 2020).
However, it is the $ 300 billion allocated to direct incentive payments that most people associate with the CARES Act. Nearly 160 million payments for economic impact were paid out, with individuals and married couples participating together to receive a maximum of $ 1,200 or $ 2,400, respectively, depending on their adjusted gross income. Alders as caregivers were also eligible to receive $ 500 for each addict under the age of 17.
Although throwing money at an unusual problem appeared fair in March, the one aspect of the CARES law that fell flat was its attempt to financially support individual workers and seniors. Based on a Money / Morning Consult interview of 2,200 people at the end of April, nearly three-quarters in four weeks or less had spent or expected to spend all of their incentive money.
Additional stimulus appears to be sorely needed, and Capitol Hill is currently (since Wednesday night) knee-deep in paperwork to make another stimulus deal a reality.
Surprisingly, the following incentive action can actually save you money
While a definitive deal is likely to mix important aspects of the Democrat-proposed HEROES Act and the GOP-backed HEALS Act, what you may find surprising is that, in addition to the next incentive bill that applies to large, save people make money in different ways.
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A temporary security deposit on Medicare Part B premiums
Seniors and most Social Security recipients could see a nice surprise as part of the next incentive action, with the HEALS Act requiring one year to get free on Medicare Part B premiums.
Today, more than 60 million people are enrolled in the Medicare program, with many paying the standard monthly premium of $ 144.60 for Part B (that is, outpatient services). Most years, the monthly B-premium costs of Medicare will increase to reflect the increasing costs of medical care services. But rapidly increasing premiums for medical care could be a thing of the past if the U.S. economy is in a recession or if the cost of adjusting for Social Security (COLA) creeps higher by a negative amount.
Fortunately, approximately 70% of Medicare Part B subscribers are also recipients of Social Security of more than one year and are therefore protected by the harmless provision of the hold. This provision ensures that Medicare Part B premiums cannot increase faster than COLA of Social Security.
However, a provision in the HEALS Act specifically requires a free premiere for Medicare Part B for 2021, regardless of what happens with the COLA or Social Security of Social Security in general. If no COLA is passed, Part B premiums would not have gone up in any case, but this incentive provision would hamper the idea that in 2021 seniors would no longer pay for Medicare Part B premiums.
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A full tax return on business meal
Another cost-saving initiative you will find in the HEALS Act is the Supporting America’s Restaurant Workers Act, which was introduced by Republican sen. Tim Scott of South Carolina. Scott’s bill would increase the existing deduction from business equity by 50% to a temporary tax return of 100%.
The purpose of Scott’s facility is simple: Get people back into restaurants that have been under the heaviest industry. According to data published by online reservation service OpenTable, diners of online, telephone and walk-in reservations ranged from 53% to 66% in the US every day for the past month, relative to the period of previous year. By providing an incentive to do business in restaurants or business in restaurants, Scott hopes to drum up companies for the sector and get employees back from food.
However, even if Scott’s provision makes it into the definitive incentive letter, it’s not clear how much it will move the needle for restaurants. A weekly Morning Consult survey measuring consumers’ comfort levels when going out to eat has been established just around the 34% mark for six consecutive weeks (through 4 August 2020). This means that two-thirds of those surveyed at the moment will not feel comfortable in a restaurant.
But if you are one of the three who are comfortable eating out, a larger tax return may await.
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A responsible shield for companies
A third and final way in which the next incentive action can save people money is through a corporate liability shield.
When Senate Majority Leader Mitch McConnell (R-Ky.) Introduced the HEALS Act, the one provision he maintained that was not negotiable was the Safe to Work Act, which prohibits companies and other entities (e.g. hospitals and schools) are being prosecuted for coronavirus infections. To be clear, people could still prosecute and win if they could prove that a company as an entity was grossly negligent in not complying with local, state or federal health guidelines. But the key essence of this provision with the support of GOP is that it would protect companies for a five-year period against an attack of terrible COVID 19-related lawsuits.
While the Safe to Work Act does not directly save a majority of Americans money, it will protect businesses from a major uptick in legal expenses. That means the ability to not cut back on staff, pay, or work hours. It also means less of a chance that business owners with their own owners will go bankrupt from coronavirus lawsuits.
All of this means that there are many ways to potentially save money if / when the next incentive agreement is signed into law.
