For many Americans, 2020 has been one of the most challenging years of their lives. The 2019 coronavirus disease pandemic (COVID-19) has completely disrupted social norms, sent unemployment levels to more than eight decades highs, and cost the lives of more than 173,000 Americans.
Work to combat the disease is continued in laboratories around the world. Meanwhile, in order to combat the historic financial malaise caused by COVID-19, lawmakers only passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March.
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The CARES Act has not done enough for the average American
The $ 2.2 trillion price tag added to the CARES Act made it by far the most expensive piece of relief legislation ever to come from Washington. It eventually provided about $ 500 billion to emergency businesses, provided roughly $ 350 billion in loans to small businesses, provided $ 100 billion to hospitals, and spent $ 260 billion on the unemployment benefits program. This $ 260 billion is what allowed unemployment benefits to increase by an additional $ 600 per week between April 1 and July 31.
The CARES Act also provided $ 300 billion in direct incentive payments to working Americans and seniors receiving Social Security. These economic impact payments (as they are officially known) totaled as much as $ 1,200 per person or $ 2,400 per couple, with an additional $ 500 for each dependent under the age of 17.
A record amount of cash thrown at an unusual problem sounds like a good idea at the end of March, and it probably did quite a bit to help prevent even more bankruptcies for small businesses than we witnessed. But the CARES Act did not hurt the average American. A Money / Morning Consult survey in late April found that about three-quarters of recipients burned out in four weeks or less because of their incentive money.
With improved unemployment benefits ending and the US unemployment rate still hovering above 10%, there is little doubt that another round of direct assistance to Americans and small businesses is needed – and lawmakers agree.
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there are major differences between the HEROES and HEALS Acts
The problem is, Democrats and Republicans may not seem to agree on what should be included in the next incentive package.
In May, the Democratic-led House of Representatives introduced the HEROES Act, which came with a price tag of close to $ 3.5 trillion. The HEROES Act would establish money for state and local governments; however, extend the $ 600 per week improved unemployment benefit through January 2021; create a $ 200 billion Hero Fund for Essential Workers; apportion $ 175 billion to help families struggling to pay their mortgage, rent and / or utility bills; and provide another round of direct incentive payments to Americans.
Meanwhile, Republicans unveiled the HEALS Act last month. Priced at roughly $ 1 trillion, the HEALS Act allocates funds for additional loans for Paycheck Protection Program (PPP) to small businesses; extends $ 105 billion to schools and universities; and reduces the improvement in unemployment benefits to $ 200 per week for a period of 60 days, after which a combination of federal and state benefits will replace 70% of a worker’s salary. It also funds a second round of incentives to workers and seniors.
In addition to the difference of about $ 2.5 trillion in funding between these two accounts, there are other holdups. For example, the HEROES Act makes unemployment without documents with an individual number of the taxpayer eligible to receive incentive money, while the HEALS Act does not. Likewise, the HEALS Act introduces the idea of protecting liability for companies where House Democrats are not fully on board.
Suffice it to say, the HEROES Act and HEALS Act are miles apart, and weeks of discussion to reconcile these two bills have not led to much progress.
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A new COVID-19 “lean” bill lacks one main component
Although, there is a lot of variance between these two accounts, there is also one important similarity. Both the HEROES Act and the HEALS Act require a second round of direct incentive payments to workers and seniors, with the same maximum payouts of $ 1,200 per individual and $ 2,400 per pair. Although there were some differences over dependent payouts and those eligible for stimulus money, support for a second round of direct payments was considered as the foundation on which future negotiations would be built.
However, according to a new skinny incentive proposal that is gaining steam on Capitol Hill, this fundamental piece could stay put.
With increasing pressure to get something done on both sides of the political spectrum, it seems more likely that lawmakers will be able to try to give a “lean” COVID-19 relief bill in the coming days or weeks. A skinny bill would include some key provisions, such as PPP loans for small businesses, a reinstatement of improved unemployment benefits at $ 300 a week through Dec. 27, funding for schools, and added cash for tests and faxes.
However, a skinny bill would not include all the provisions currently contained in the HEROES or HEALS Acts. Most notably, direct incentive payments to working Americans and seniors would be denied. Remember, I’m writing this from Wednesday night, August 19th, and things could change at the rap of a hammer on Capitol Hill. But based on ongoing reports, it sounds like Americans may not get any incentive money if a skinny bill is passed.
Why direct payments are not written in the skinny incentive package, given that both parties have essentially agreed to additional payouts is actually one of the tips at this point. With the Senate on recession until after Labor Day (Sept. 7), however, it is unlikely that serious progress will be made on significant stimulus differences until after that date. Then you need to factor in the multiple weeks it can take for the Internal Revenue Service to get everything to issue incentive payments. It therefore seems unlikely that workers and seniors will see a second round of incentive payments hitting their bank accounts by early October.
