TOPLINE
As Congress heads into an 11-day crisis to agree on a new bailout package and President Trump signs it before a key $ 2.2 trillion CARES provision expires, with millions of Americans unemployed and new Coronavirus cases that become alarming levels – this is what is at stake in the next round of legislation.
Speaker of the House of Representatives Nancy Pelosi (D-CA) speaks at a press conference on Capitol Hill on June 29. … [+]
KEY FACTS
Unemployment insurance: The additional $ 600 a week in federal unemployment benefits authorized by the $ 2.2 trillion CARES Act will run out in late July, and while a new proposal from Senate Democrats would extend the benefits until the job market recovers, Republicans have argued that the extra boost discourages people from returning to their jobs.
Back to work bonuses: Instead of more unemployment benefits, some Republican lawmakers, like Senator Rob Portman of Ohio, prefer cash bonuses for workers who return to their jobs.
Payroll tax reduction: President Trump has long been an advocate of a payroll tax cut, which he says would bolster the labor market by increasing Americans’ net wages, although experts say the policy does not help the unemployed.
Stimulus controls: President Trump said this week that he supports sending another round of direct payments to Americans, as do many Democrats; Republicans, wary of additional government spending, are divided on the issue.
Aid to state and local governments.: Urging McConnell to restart stimulus negotiations immediately, Speaker of the House of Representatives Nancy Pelosi (D-Calif.) And Senate Minority Leader Chuck Schumer (DN.Y.) said Monday. State and local governments will have a hard time covering essential services like schools, not to mention high health care costs and large losses of tax revenue, without additional federal funds.
Small Business Relief: Both the House of Representatives and the Senate agreed this week to extend the Paycheck Protection Program until August 8, buying time for Congress to figure out what to do with the $ 134 billion that has not yet been lent and to decide on any additional help for small businesses.
Liability protections: Senate Majority Leader Mitch McConnell (R-Ky.) Has been a fierce advocate of legal protections for companies reopening to protect them against coronavirus-related lawsuits, calling them a “red line” for Republican negotiators in May.
Tax breaks for tourism: The White House has also suspended national travel tax cuts to help shore up the leisure and tourism industries, which are among the sectors most affected by the pandemic.
Key background
Lawmakers have passed four major rescue laws since the coronavirus pandemic hit the United States. The first two bills underpinned federal funds for testing and small business loans, established provisions for paid sick leave and expanded unemployment insurance. These bills were followed by the CARES Act, which became the most important piece of bailout legislation in United States history, priced at $ 2.2 trillion. The CARES Act is the law that created the Paycheck Protection Program and authorized the IRS to send the first round of stimulus checks. It was followed almost immediately by another package worth nearly $ 500 billion that replenished funds for small business emergency assistance. In May, the Democratic-led House passed the Heroes Act, a $ 3 trillion stimulus package that included everything from more stimulus controls to an extension of the expanded unemployment program and more aid to states. The Heroes Act has been largely ignored by the Republican-led Senate and is virtually guaranteed to fail in that chamber in its current form.
Further reading
The Republican Party suddenly expresses urgency about the stimulus: “Congress must act in July” (Forbes)
It’s official: Trump wants a second round of stimulus checks on ‘bigger numbers’ than Democrats (Forbes)
With Senate Republican MIA, Pelosi and Schumer urge McConnell to restart stimulus negotiations immediately (Forbes)
CARES protections, including $ 600 unemployment benefits, expire next month. This is what must happen to prevent further economic devastation. (Forbes)
