The $2 Trillion Stimulus Package Explained

At the beginning of April, the Senate approved a monumental $2 trillion stimulus package in order to jumpstart a stagnant economy reeling from the coronavirus pandemic. Its passage was the culmination of days of negotiating and serves as one of the most expensive measures the federal government has ever considered. In an extraordinary display of bipartisanship, the bill passed with a unanimous 96-0 vote

Two days later, the House of Representatives passed the bill by voice vote. Republican Rep. Thomas Massie of Kentucky angered members on both sides of the aisle by requesting a full roll call vote, which required representatives to travel to Washington D.C. amidst a massive public health crisis. House leadership denied the roll call, but 216 members still had to return to the capital to establish a quorum.

President Trump signed the bill into law just hours after the House approved it. He thanked both parties for “coming together and putting America first” and reiterated the stimulus package would be the first step toward economic recovery in the United States. 

The package was the result of days of talks between the Trump administration and Republican and Democratic leaders in Congress and prior to the president’s signing, congressional leaders explained that they expected to draft additional legislation as the pandemic continues in the coming months. 

The stimulus package includes worker protections pushed by Democrats as well as a $500 billion rescue fund Republicans demanded for large corporations in flailing industries, such as travel and transportation. It also includes direct stimulus payments to American taxpayers. The amounts of the payments will be determined by  income. Single adults who make $75,000 or less annually will get the full $1,200. Taxpayers filing as head of household will also get the full payment if their income is $112,500 or less. Married couples without children bringing in $150,000 or less will each get the full amount – a combined total of $2,400. The payment amount decreases before stopping altogether for single people as their annual income approaches $99,000 and for married couples with no children as their combined income approaches $198,000. A married couple with two children will not be eligible for any payments if its income surpasses $218,000, as per the Senate Finance Committee

College students who are claimed as dependents will not receive any benefits. If tax returns for 2019 have already been filed, these will be used to determine the payment amount. If the 2019 return has yet to be filed, the 2018 return will be used. According to the Tax Policy Center, ninety percent of Americans are eligible for either a full or partial payment.

It still remains uncertain how long it will take the Internal Revenue Service to process and calculate each payment, but payments began processing out on April 12th, with 80 million Americans receiving their payments by April 16th.

The bill measure also expands jobless aid by providing 13 additional weeks as well as a four-month enhancement of benefits that amount to $600 per week, even extending to freelancers, furloughed employees, and gig workers. This will be in addition to what state unemployment programs will pay. Unemployed workers will be eligible to receive up to 39 weeks of benefits. This tremendous expansion of unemployment insurance is estimated to cost $250 billion.

The bill will also allocate $377 billion for loans to small businesses in distress from the lull in economic activity. The federally guaranteed loan program will be available at the end of June for small businesses and will be forgiven if the employer pays its employees throughout the crisis. An additional $100 billion will be sent to hospitals on the front lines of the crisis. $30 billion has been allocated for emergency education funding and $25 billion for emergency transit funding.

Vermont Representative Patrick Leahy, the ranking Democrat from the Senate Appropriations Committee, pushed for language to ensure small states like Vermont would not lose out on emergency funds. Subsequently, the agreement will give $150 billion for state and local governments, with no state receiving less than $1.5 billion. This helps states in distress as tax revenue diminishes and unemployment continues to skyrocket. 

Airlines were able to lobby their way into $25 billion in aid, but carriers are not the only ones benefiting. The money will be allocated for loans and loan guarantees for eligible businesses that perform inspections, repair, replace, or overhaul services, and ticket agents. The term “ticket agents” extends to travel agents who book flights, meaning they can also apply for their part of the $25 billion.

The package will also allow President Trump to extend the terms of seven senior military leaders if need be: the Air Force chief of staff; the chief of space operations, the chief of the National Guard Bureau, the directors of the Army and Air National Guard, and the chief of the Army and Navy Reserves. Because many of these officers’ terms will expire later this year, this provision allows for them to remain in office until the pandemic ends or successors are confirmed. Backed by the Senate Armed Services Committee, it was included as part of the Senate Republican initial version of the package. “At this unprecedented time, the committee and the administration wanted to ensure we have every possible option available to keep critical military positions filled,” committee spokesperson Marta Hernandez said.

The stimulus package also creates a tax benefit for those who have taken out student loans with employers helping them pay off their debt. A company would be able to pay up to $5,250 of an employee’s student loan payments annually tax-free. The provision is the result of a bipartisan proposal, but some critics have voiced that it will also provide new tax benefits to those borrowers who are financially secure and do not need help. 

 The deal will also include $10 billion in Small Businesses Administration emergency grants and an additional $10 million limit for emergency relief supplies per business. Senate Minority Leader Chuck Schumer’s office also said $17 billion has been allocated for the Small Businesses Administration to cover six months’ worth of payments for small businesses with an existing Small Businesses Administration loan.

A point of contention that prevented Democrats from supporting the bill’s earlier draft was a portion that essentially allowed for the United States Treasury to issue loans to large businesses without disclosing these loans to the public for up to six months. Democrats were able to bring down this timeframe to one to two weeks and also added a provision that would exclude companies owned by elected officials like President Trump and their family, including in-laws, from receiving loans. It also prohibits them from using different elected officials or family members each owning a smaller amount of shares, but who collectively own the majority of the company.

“We’ve written a very strong provision not just for Trump, but certainly for him, but for any powerful official,” Schumer explained. “A cabinet, a senator, a congressman. If they own a business or their family owns a business, they should not get these loans.”Even after the passage of a landmark bill, Congress has suggested more stimulus legislation will be drafted to ensure companies continue to receive capital as well as keep millions of workers on payrolls throughout the pandemic. The Senate will remain in recess until April 2oth, and the House will take an extended break, but members have said they may return earlier depending on changes in the economy. Legislators in Washington are working on a fourth legislative response—duly nicknamed ‘Phase 4—that is likely to pass between late April and mid-May.



Categories: Domestic Affairs

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