- Pelosi wants a bill bigger than $1 trillion to fund and expand coronavirus assistance programs
- A targeted approach with health care as priority is what McConnell advocates
- Trump supports direct payments, more loans for small businesses and infrastructure spending
- White House officials discuss tax cuts, 50 Year bond, liability waiver for businesses
- Growing calls for more local government support
Leaders in Washington say they are ready to start work on the next stimulus bill and there appears to be some bipartisan thawing after public sparring.
House Speaker Nancy Pelosi reportedly told other Democrats and former Federal Reserve Chair Janet Yellen on a conference call it has to be $1 trillion or more. Bloomberg reports that Pelosi wants the bill to replenish funds for programs established in Congress’s $2.2 trillion virus relief bill, additional direct payments to individuals, extended unemployment insurance, more resources for food stamps and more funds for the Payroll Protection Program that provides loans to small businesses.
There was no mention of infrastructure, which she talked about last week. This is most likely a compromise to stick to issues directly related to the crisis rather than a broader agenda, which Republicans complained about last week. Senate Majority Leader Mitch McConnell previously advocated a wait-and-see approach. He said Pelosi’s push was “premature” and she should “stand down,” but he has recently signaled he is open to working on a new bill. On Friday, he told The Associated Press “there will be a next measure” and the fourth bill “should be more a targeted response to what we got wrong and what we didn’t do enough for — and at the top of the list there would have to be the health care part of it.” Sen. Marco Rubio has told the press that other Republican senators also recognize the need for another bill. “That includes, by the way, replenishing the funds on the small business loan program. Because I believe that those funds, given the demand, will not reach June 30,” he told CNBC
President Trump has also indicated his administration plans to do more. Yesterday he told reporters he supports additional direct payments and the idea of an infrastructure bill. “Our country has to be rebuilt. They spent all this money in the Middle East — $8 trillion,” he said. He has also promised he will ask Congress for more money for the small business loan program if it runs out.
White House officials have also discussed a payroll-tax cut, a capital-gains tax cut, creating 50-year Treasury bonds and a waiver that would clear businesses of liability from workers who contract COVID-19, according to Fox Business.
There is also a growing call for more funding directed toward local governments as revenue is expected to plunge.Yellen says there’s a tremendous need to support local governments, according to Bloomberg. The previous stimulus bill allocated $150 billion toward state and local aid, but this was for specifically coronavirus-related purposes. Denver’s Governor Jared Polis and local government officials recently wrote a letter to to Colorado’s congressional delegation in Washington that said, “As you look toward the Phase 4 stimulus package, we stand united as state and local partners on the front lines of this crisis, urging you to include at least $500 billion in direct, robust and immediate State and local aid. Absent this assistance, the state of Colorado and local governments who are directly helping Colorado’s communities respond and recover from the impacts of this public health crisis will face an unmitigated economic crisis.”
Congress is currently adjourned and lawmakers won’t return to Washington until April 20, so a bill could be possibly be enacted in May.
What Was in the $2 Trillion Dollar Stimulus Bill?
- One-time direct payments: Every adult earning up to $75,000 will receive a rebate of $1,200 plus $500 for each child. Married couples making a combined $150,000 will receive $2,400. Amount phased out beyond this limit. All those with Social Security numbers, even those with no income or those dependent on non-taxable means-tested benefit programs, such as SSI benefits, are eligible to receive this. This is expected to include 90% of U.S. households. Adults making over $99,000 and married couples making over $198,000 are not eligible. For single filers with children, the limit is raised to $146,500. The IRS will use a taxpayer’s 2019 tax return if filed and in the absence of that the 2018 return.
- Unemployment benefits: Expanded to include freelance, gig and furloughed workers and cover an additional 13 weeks through the end of the year. $600 per week extra assistance for four months.
- Small businesses: $350 billion in low-interest (up to 4%) loans for businesses with 500 or fewer employees per location. Loans will be forgiven if used to retain workers, pay rent/utilities or mortgage interest. Loans up to $10 million.
- Retirement plans: The 10% penalty on early withdrawals up to $100,000 from retirement accounts has been waived for those experiencing financial hardship due to the virus. The maximum loan amount from retirement accounts has been doubled to $100,000.
- Student loans: Payments on federal loans suspended without penalty through September 30.
- Hospitals: $100 billion in grants for hospitals. There is also a 20% Medicare payment boost for those treating coronavirus patients.
- Corporate America: $500 billion Treasury fund for loans to struggling corporations. An inspector general and accountability committee will serve as watchdogs and funds cannot be distributed to federally elected officials or their immediate relatives. Companies prevented from buying back stock until a year after the loan is paid back.
- Airlines: $58 billion in aid, half in the form of grants and the other half loans.
- State and local governments: $150 billion in aid, including $8 billion for tribal governments.
- Payment of employer payroll taxes: Employers and self-employed individuals can delay paying the 6.2% Social Security tax on employee wages. Half of the amount has to be paid by December 31, 2021 and the other half by December 31, 2022.