With rare bipartisanship and speed, Washington, D.C., is about to deliver massive, unprecedented legislation to speed help to individuals and businesses as the coronavirus pandemic takes a devastating toll on the U.S. economy and health care system.
The House is set to pass the sprawling, $2.2 trillion measure Friday morning after an extraordinary 96-0 Senate vote late Wednesday. President Donald Trump marveled at the unanimity Thursday and is eager to sign the package into law.
The relief can hardly come soon enough. Federal Reserve Chairman Jerome Powell said Thursday the economy “may well be in recession” already and the government reported a shocking 3.3 million burst of weekly jobless claims, more than four times the previous record. The U.S. death toll has surpassed 1,000 from the virus.
It is unlikely to be the end of the federal response. House Speaker Nancy Pelosi said Thursday that issues like more generous food stamp payments, aid to state and local governments, and family leave may be revisited in subsequent legislation.
“There’s so many things we didn’t get in … that we need to,” Pelosi told reporters Thursday.
The legislation will pour $1,200 direct payments to individuals and a flood of subsidized loans, grants and tax breaks to businesses facing extinction in an economic shutdown caused as Americans self-isolate by the tens of millions. It dwarfs prior Washington efforts to take on economic crises and natural disasters, such as the 2008 Wall Street bailout and President Barack Obama’s first-year economic recovery act.
But key elements are untested, such as grants to small businesses to keep workers on payroll and complex lending programs to larger businesses. Millions of rebate payments will go to people who have retained their jobs.
Policymakers worry that bureaucracies like the Small Business Administration may become overwhelmed, and conservatives fear that a new, generous unemployment benefit will dissuade jobless people from returning to the workforce. A new $500 billion subsidized lending program for larger businesses is unproven as well.
First the measure must clear Congress. Leaders in both parties had hoped to pass the measure with a sparsely attended voice vote — remarkable for a bill of such magnitude—so scattered lawmakers don’t have to risk exposure by traveling back to Washington.
But now it is feared iconoclastic Rep. Thomas Massie, R-Ky., an opponent of the bill, may seek to force a roll call vote. Democratic leaders summoned members back to Washington, at least those who are able and willing to return.
Friday’s House session will also be unprecedented. Originally scheduled as a non-working “pro forma” meeting, the session will be extended to a debate on the bill—all conducted under social distancing rules to minimize the risk of transmitting the virus.
Rep. Jim Jordan, R-Ohio, one of the House’s conservative leaders, said he wasn’t aware of anyone planning to block a voice vote Friday but planned to talk more with colleagues before the vote.
“If that’s the method used to get this to the American people, to get this passed, then I think lots of members are probably OK with that,” Jordan said Thursday as he drove back to Washington. “I know the plan is for it to be a voice vote, and that’s what the leadership has said they’re for, and I think that’s fine.”
Wednesday night’s unanimous Senate vote on the bill was especially striking—a united front that followed days of sometimes tumultuous negotiations and partisan eruptions. Democrats twice voted to block the bill to seek further add-ons and changes.
“The power of the argument that we had—that you need a strong government to solve these problems, both health and economic—carried the day,” Schumer told The Associated Press on Thursday. “Had we not stood up on those two votes it wouldn’t have happened.”
Underscoring the effort’s sheer magnitude, the bill finances a response with a price tag that equals half the size of the entire $4 trillion-plus annual federal budget. The $2.2 trillion estimate is the White House’s best guess of the spending it contains.
The rescue bill would provide one-time direct payments to Americans of $1,200 per adult making up to $75,000 a year and $2,400 to a married couple making up to $150,000, with $500 payments per child.
Unemployment insurance would be made far more generous, with $600 per week tacked onto regular state jobless payments through the end of July. States and local governments would receive $150 billion in supplemental funding to help them provide basic and emergency services during the crisis.
“We call them checks in the mail, but most of them will be direct deposits,” Treasury Secretary Steven Mnuchin told CNBC on Thursday. “It will be within three weeks. We’re determined to get money in people’s pocket immediately.”
The legislation also establishes a $454 billion program for guaranteed, subsidized loans to larger industries in hopes of leveraging up to $4.5 trillion in lending to distressed businesses, states, and municipalities. All would be up to the Treasury Department’s discretion, though businesses controlled by Trump or immediate family members and by members of Congress would be ineligible.
There was also $150 billion devoted to the health care system, including $100 billion for grants to hospitals and other health care providers buckling under the strain of COVID-19 caseloads.
Republicans successfully pressed for an employee retention tax credit that’s estimated to provide $50 billion to companies that retain employees on payroll and cover 50% of workers’ paycheck up to $10,000. Companies would also be able to defer payment of the 6.2% Social Security payroll tax. A huge tax break for interest costs and operating losses limited by the 2017 tax overhaul was restored at a $200 billion cost in a boon for the real estate sector.
An additional $45 billion would fund additional relief through the Federal Emergency Management Agency for local response efforts and community services.
Most people who contract the new coronavirus have mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, or death.
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Unfortunately in order to qualify for the tax credit for businesses, you will need to show that you have a 50% reduction in income. As a small business, if we have a 50% reduction in income, we will not have enough money to pay our employees or our rent or our suppliers. Before we would be able to receive the tax credit, we would be out of business. I am sure many mid-size business also would not be able to keep employees to get a tax credit.