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Congress Is Poised to Pass a Historic Stimulus Package in Response to the Coronavirus
The Senate has agreed to a massive stimulus bill to counter the devastating economic consequences of the coronavirus pandemic. Nearly $2T will be earmarked to provide direct financial aid to help individuals, hospitals, businesses, and state and local governments—all in an effort to flood money into the U.S. economy that has been rocked by the outbreak of COVID-19.
The relief package is, by far, the largest in U.S. history. Michelman & Robinson breaks it down.
Q. Bottom line: what will the legislation provide?
A. The available information indicates that the stimulus deal includes more than $300B for small businesses, $150B for state and local governments and $130B billion for hospitals. Additionally, the relief package provides direct payments to individual Americans.
Q. How much money will individuals be given?
A. To the best of our knowledge, $250B has been set aside for so-called “recovery rebates.” Single Americans will receive $1,200, married couples will get $2,400, and parents will be given $500 for each of their children under age 17. That being said, the contemplated payments will be less for people with adjusted gross incomes of more than $75,000, and those making more than $99,000 will not qualify at all (these thresholds are doubled for couples). Still, estimates suggest that approximately 90% of Americans will qualify to receive full or partial payments. Of note, qualifying income levels will be based on 2019 federal tax returns, if already filed, and otherwise on 2018 returns.
Q. How long will it be before those that are eligible receive their “recovery rebates”?
A. That is unclear. What we do know is that it takes a significant amount of time to get checks out after a policy—such as the one now in Congress—is put in place. The Trump administration has suggested a two-week timeframe, but recent history (rebate checks issued in connection with President George W. Bush's tax cut in 2001 and those sent amid the Great Recession in 2008) suggests it could be months before “recovery rebates” are in American pockets.
Q. Is this a done deal? Has the stimulus package been signed into law?
A. Yes, the relief has been agreed upon, yet passage of the legislation is still a work in progress. The Senate is expected to vote on the bill this afternoon (Wednesday, March 25). After Senate passage, the next step is a bit muddled. The House of Representatives is out of session, so action there could take longer, depending on whether lawmakers can agree to pass the bill by “unanimous consent,” which would require agreement from all members of the chamber. If that does not happen, members of the House (who are currently on a scheduled recess) will need to be called back for an in-person vote, which could add some time to the process. Nevertheless, once both chambers vote in favor of the stimulus plan, as anticipated, President Trump is expected to sign it into law right away.
Q. Once the relief bill becomes law, will other governmental benefits be impacted?
A. Yes, the stimulus will bolster unemployment insurance benefits as well, expanding eligibility and offering workers an additional $600 a week for four months—this on top of what state unemployment programs pay. This is a critical piece of the puzzle, as millions of Americans have filed for unemployment benefits in the past few weeks.
Q. With so much money on the line, might fraud become an issue?
A. Yes, which is why the plan allows for an oversight board and the appointment of a Treasury Department special inspector general for pandemic recovery to scrutinize lending decisions and detect abusive or fraudulent behavior. According to lawmakers, every loan document will be public and made available to Congress so that it can see where money is going.
Q. How are our leaders characterizing the stimulus bill?
A. In a word, historic. This will be the single largest “Main Street” assistance program ever passed. In fact, senators have cast it as “a wartime level of investment into our nation.”
Q. This is not the only measure Congress will have passed in response to the coronavirus, correct?
A. That is right, Congress has already passed two other coronavirus-related relief bills: an $8.3B emergency supplement for the health-care system and a $100B-plus bill to boost paid sick leave and unemployment insurance and provide free coronavirus testing.
This blog post is not offered, and should not be relied on, as legal advice. You should consult an attorney for advice in specific situations.