Congress has already approved two emergency packages. A much larger third is ready. This is what it includes.
The Wall Street Journal has reported that top lawmakers and the Trump administration are close to signing in on a colossal stimulus package that could reach $2 trillion dollars, designed to shield the U.S. economy from the most drastic consequences of the coronavirus pandemic. This, already after two emergency packages that had already been announced by the POTUS administration.
This new plan would include relief for major industries such as airlines, small businesses that have seen revenues dwindle or disappear, and workers facing layoffs and loss of health coverage. Stocks rallied on the news that a deal was near, with the Dow Jones Industrial Average up more than 7% in morning trading.
Treasury Secretary Steven Mnuchin and Senate Democratic leader Chuck Schumer said they had spoken by phone with President Donald Trump during the long night of negotiations. While the two sides have resolved many issues in the sweeping package, some remain. President Donald Trump, on the other hand, tweeted: “Congress must approve the deal, without all of the nonsense, today. The longer it takes, the harder it will be to start up our economy.”
According to reporting from USA Today, this new emergency fund would include:
- Direct payments of up to $1,200 for most individuals and $2,400 for most married couples filing jointly with an extra $500 for each child. Benefit reduced for higher earners.
- Waives penalties for early withdrawal from qualified retirement accounts for coronavirus-related purposes of up to $100,000.
- Allows deferral of student loan payments and allows students who were forced to drop out of school due to coronavirus to keep their Pell grants.
- Increases Medicare payments to hospitals treating a patient admitted with coronavirus.
- Provides small businesses access to private bank loans equal to four months of expenses (payroll, rent, utilities, etc.) that would be covered by the federal government if they stayed open, maintained their workforce and paid their bills.
- Provides tax relief to businesses by deferring tax payments, increasing deductibility for interest expenses and allowing immediate expensing of qualified property improvements, especially for the hospitality industry.
- Provides a financial lifeline of several hundred billion dollars to industries hardest hit by crisis. Initial proposals called for help for passenger airlines (up to $50 billion), air cargo lines (up to $8 billion) and “other major industries” (up to $150 billion) severely impacted by government health restrictions to combat coronavirus. Companies receiving assistance would be barred from raising the pay of certain executives.
On the democratic side, House Speaker Nancy Pelosi unveiled a $2.5 trillion virus economic stimulus plan in a bid to shape negotiations on a Senate measure that stalled on Monday, triggering a sell-off in U.S. equities markets. According to CNN Politics, Democrats have repeatedly blocked efforts to advance the stimulus because of concerns that it prioritizes corporate industry over American workers. Republicans have argued that Democrats are stalling critical economic relief amid the devastating spread of coronavirus.
Nearly 400,000 people worldwide have been infected by the coronavirus and more than 17,000 have died, according to a running tally kept by Johns Hopkins University. In the U.S., as of March 24, the number of infections topped 46,000, with about 600 dead, while New York, now one of the globe’s coronavirus hot spots, authorities rushed to set up thousands of hospital beds for potential victims in the city of 8.4 million people. The Federal Emergency Management Agency has declared a major disaster in the state, freeing up access to billions of dollars in relief funding.