While the current Coronavirus recession rages onward, Americans are becoming increasingly more uneasy with the country’s economic trajectory. At this point, it doesn’t seem fair to try to place blame on any one particular person or group of persons since there’s plenty of blame to go around.
At the absolute least, we know the American worker and family are not to blame. Every man, woman, and child in America has been adversely affected by the Coronavirus recession in some manner.Read More »
For the average American, even the mention of new stimulus packages elicits nothing more than confusion and doubt. To clarify where stimulus negotiations stand at this time, a comparison of the original CARES act and two subsequent proposed bills seems timely.
The CARES Act (First Stimulus Package)
What seems like a lifetime ago, March of 2020, Congress passed the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) with bipartisan support. The first stimulus package authorized the distribution of $2.2 trillion to Americans, American companies, health facilities, and certain government agencies.
While the bill gave support across a wide range of beneficiaries, three components were of particular interest to American citizens.
The first was a Paycheck Protection Program that offered up $659 billion in loans to be shared by small businesses. Under the guidelines of the program, qualifying small businesses were permitted to borrow money to sustain their businesses. If 75% of the borrowed monies are being used on payroll, the applicable loans will eventually be forgiven.
The second key component of the first stimulus package was the unemployment provision. This particular provision authorized the payment of up to $600 per week in unemployment benefits to people who had lost their jobs. The $600 was to be paid on top of any state unemployment benefits already being paid by the states. This provision expired on July 31.
The third key component was addressed directly to American citizens and their family members. The bill authorized an Economic Impact payment of $1,200 to each American citizen over 18 years of age with an income of less than $75,000. An additional $500 was authorized for dependents. A lesser amount of stimulus was paid up to individuals earning up to a maximum of $99,000, at which point people became ineligible.
For the most part, most of the $2.2 trillion has been spent. How the country and its citizens may have benefitted remains to be seen.
The HERO’s Act (Second Stimulus Package)
With health concerns still growing in May, the House of Representatives went to work on a second stimulus package. While there was universal support for the idea of another round of stimulus, the Senate had not yet decided to move forward with the introduction of another bill.
After partisan negotiations in the House, House Speaker Nancy Pelosi, introduced the House’s HERO’s Act (Health and Economic Recovery Omnibus Emergency Solutions Act) in May. This time around, the House Democrats were set to seek a $3 trillion stimulus package in response to the Coronavirus recession.
Currently, the billed has been passed by the House right down party lines. Before it formally reached the Senate, Senate Majority Leader Mitch McConnell declared the HERO’s act “dead on arrival.” At issue has been what Republicans deem as unnecessary spending. The biggest sticking point in this bill has been the proposal of hundreds of billions in economic assistance to governments at the state, local, tribal, and territorial levels. The GOP calls this an unnecessary bailout of mismanaged states and cities.
It’s worth noting the GOP has also taken an unfavorable position of a clause in the HERO’s act that would extend the up to $600 in unemployment benefits awarded in the CARES Act. Reports indicate $600 in weekly benefits is serving as a disincentive for people to go back to work.
What everyone does seem to support in the bill is a provision that would allocate another round of the same Economic stimulus payments to American citizens, though the Democrats want to extend those same benefits to nonAmericans. It’s also worth noting that both the Democrats and President Donald Trump are open to a higher amount than $1,200.
The HEALS Act (Second Stimulus Package)
After much contemplation, the U.S. Senate, led by Mcconnell, decided to punch back against the HERO’s Act with its proposal for a second stimulus package. On July 27, McConnell and his Republican-dominated Senate introduced the HEALS Act (Health, Economic Assistance, Liability Protection, and Schools Act).
Before this bill was finally introduced to the public, it caused a lot of infighting among GOP leadership. The big concern has been over the need to spend more money with unemployment sitting at double digits and the national debt nearing $27 trillion. It took a lot of screaming and compromise before the bill was finally introduced.
With the House’s approval pending, all indications are Pelosi won’t be bringing this bill to the House floor. While the HEALS Act has the same language as the HERO’s Act as it relates to the financial stimulus for individuals and their family members, language regarding unemployment benefits has this bill stuck in concrete.
Keeping in mind that Democrats want to keep weekly federal unemployment benefits at $600 a week until the end of the year, the Senate has indicated it would only offer an extension through September with the maximum amount dropping to $200 a month for the rest of the year.
With very little hard evidence that the CARES Act made a significant impact on the Coronavirus recession, President Donald Trump and congressional leaders all agree more needs to be done as soon as possible to support the U.S. economy. The problem is politics seem to be dominating the legislative process.
For now, it would appear that both sides have dug their heels in over support of their favored provisions. The GOP is standing firm on its support of protection for employers from lawsuits related to the COVID19 pandemic. They also don’t seem likely to give in to allocating money for failed cities and states. Meanwhile, the Democrats don’t want to budge on their demand that unemployment benefits get extended through December.
With some states looking at shutting down again as the second wave of virus goes through the nation, the ones who are suffering the most are average Americans who need to pay their bills and feed their families with little to no money to do so. Surely, something will get done very soon. At this point, there is no way of knowing exactly what that something is going to be.
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