Approval of Emergency 2.2 Trillion Dollar Coronavirus Stimulus Package
Congress and White House Reach Agreement on American Stimulus Package
Coronavirus Stimulus Package: A Summary
The White House and Congress reached a bipartisan relief agreement adding a $2.2 trillion emergency stimulus into the economy, which is intended to dull the negative economic impact of the COVID-19 Pandemic on American families and businesses.
By unanimous vote, the Senate approved the largest stimulus package in contemporary American history; one that will provide financial support to unemployed individuals, as well as fiscal support to states, industries and businesses. The $2 trillion stimulus package passed by the Senate is not final – The House will likely hold a vote on Friday before the bill goes to President Trump for his signature.
It is expected that the final bill will provide:
Direct payments to Taxpayers: Approximately $250 billion is set aside for Americans to receive a one-time direct deposit of up to $1,200, while married couples will be given $2,400. The payments will be phased out based on income levels, beginning with individuals with adjusted gross incomes of more than $75,000 while those earning more than $99,000 do not qualify for direct payments. It is expected that families will receive an additional $500 per child under the age of 17. This is true even for those who do not have an income, as well as those whose income derives entirely from non-taxable benefit programs, such as Social Security benefits.
Small Business: It is expected that small businesses will receive just over $350 billion to keep making payroll while workers are required to stay home. Companies with 500 employees or less that keep paychecks steady could get up to $10 million each in forgivable small business loans. Federally guaranteed loans will provide eight weeks of assistance for qualifying employers who maintain payroll. Those who meet requirements would have costs such as utilities, mortgage interest and rent forgiven. Business owners will have to verify the previous six (6) weeks of payroll and later verify that they have paid employees for eight (8) weeks after receipt of a loan. For businesses with existing small business loans, principal and interest would be waived for six months.
Furloughed/Unemployed Americans: Workers will receive normal benefits from New York State, plus an additional $600 per week for four months from the federal stimulus package. The proposal permits temporarily laid off workers to stay on as employees, so that when the crisis ends, they can quickly return to work. In an unprecedented deal, the White House and Senate aim to extend the stimulus bill to gig economy workers – independent contractors of ride-hailing and food delivery companies like Amazon and Uber. Further, it is likely that the federal government will fully cover up to 13 weeks of extended benefits, in addition to the 26 weeks of unemployment benefits available to New Yorkers.
Hospitals and Health Care Workers: The deal provides approximately $117 billion to America’s healthcare and hospital systems, and additional stimulus funds will be spent in obtaining protective gear for health care workers, testing supplies, and expanded workforce and training. “The bill creates a $100 billion public health and social emergency fund to reimburse providers for expenses and lost revenues related to the coronavirus pandemic. About $65 billion will go to hospitals, with the rest funneled to doctors, nurses, suppliers and others, the association said.” (CNN)
Payroll Taxes: The measure enables employers to defer payment of their 2020 payroll taxes, a key source of revenue for Social Security and Medicare, until 2021 and 2022. Companies will be required to pay 50% of payroll taxes by the end of 2021.
Agriculture: The U.S. coronavirus stimulus bill would add $14 billion to the Agriculture Department’s Commodity Credit Corp spending authority and authorize another $9.5 billion for U.S. farmers hurt by the pandemic. This deal would increase the amount the Agriculture Department can spend on its bailout program from $30 billion to $50 billion. Eligible for this financial assistance are livestock producers, including cattle ranchers, dairy and hog farmers, as well as fruit, vegetable and other specialty crop producers.
Industry: Currently, the bipartisan agreement seeks $500 billion in loans, loan guarantees and investments, which could potentially prevent layoffs of employees in those industries. Approximately $46 billion in loans will be allocated to passenger and cargo air carrier companies and for businesses that work in national security. The remaining funds will be allotted to provide loans to businesses, states and municipalities. “The measure includes restrictions on businesses who receive the loans. Those businesses may not issue dividends for up to a year after the loan is no longer outstanding and must retain 90% of employment levels as of March 24, "to the extent practicable," through September 30. The loans also cannot last longer than five years. There’s a specific provision in the program for direct loans to mid-sized businesses, defined as between 500 and 10,000 employees, as well as non-profit organizations, where no payments will be due for the first six months after the loan is issued.” (CNN)
Airlines: The stimulus package contains $32 billion in grants for wages and benefits to this industry.
States and Local Governments: These governments will receive $150 billion, with $8 billion designated for distribution to tribal governments.
Student Loans: Payments on student loan borrowers will be suspended without penalty through September 30, 2020.
REAL ID-compliant: The cutoff date to obtain a real ID, federally authorized identification needed for passengers to board aircraft, will be postponed until at least September 2021. A real ID is a form of identification that meets increased security standards for state-issued driver’s licenses and identification cards. Travelers will be required to provide either a real ID or another TSA-approved form of identification in order to fly.
Foreclosure and Evictions: Americans suffering financial difficulty due to COVID-19 shall be granted forbearance on a federally backed mortgage loan of up to 60 days, which can be extended for four periods of 30 days each. The stimulus bill requires servicers of federally backed mortgage loans to not begin foreclosure process for 60 days from March 18th. The stimulus bill also does not permit fees, penalties or additional interest to be charged as a result of delayed payments. It includes similar safeguards for those with multi-family federal mortgage loans, permitting Americans to receive a 30-day leniency and up to two 30-day extensions. Individuals with federally backed mortgage loans who have tenants would also not be permitted to evict tenants solely for failure to pay rent for a 120-day period, and they may not charge fees or penalties to tenants for the same.
Food Assistance Programs: The stimulus bill provides $450 million for The Emergency Food Assistance Program, which supplies America’s food banks. Puerto Rico and other U.S. territories will receive $200 million for food assistance, with approximately $100 million designated for food distribution to Native reservations. Additionally, the stimulus bill will provide billions in additional funding to the Supplemental Nutrition Assistance Program (food stamps) and Child Nutrition Program.
Evacuations: The bill includes $324 million for the State Department, as well as money specifically for evacuation expenses (CNN). The proposed legislation doesn't specify who would be evacuated, whether it's American diplomats or U.S. citizens living overseas.
Miscellaneous: The Peace Corps, an agency of the U.S. government, is expected to receive $88 million. Other monetary allocations include: $324 million for diplomatic programs, $258 million for international disaster assistance, $350 million for migration and refugee assistance and $95 million for United States Agency for International Development’s operating expenses.
Additionally, The Kennedy Center, a federal agency, will receive $25 million from the stimulus package as the agency has had to cancel performances and furlough nearly 800 employees.
To discuss your legal options relating to your personal or business eligibility under the stimulus bill, please contact HoganWillig Attorneys at Law, 716.636.7600.
For changing and up-to-date legal information, visit our COVID-19 Resource Center.