We’ve been hearing Congress argue about it for days, but they seem to have finally managed to assemble a stimulus bill that is acceptable to enough legislators to get it passed. The White House indicated it is acceptable to the president as well. The exact details are not clear yet, but the major provisions have been revealed.
The New York Times reports that there are five key provisions, noted below, although there still may be some uncertainty about the exact numbers.
Direct payments to taxpayers. The NYT reports $1,200 in direct payments to each taxpayer, with phaseouts for those earning between from $75,000 to $99,000, plus an additional $500 per child. The Wall Street Journal has the same numbers, without specifying the phaseouts.
Unemployment benefits increased and radically changed. The NYT says the bill extends jobless insurance by 13 weeks and includes a four-month enhancement of benefits. Insiders, according to the NYT and WSJ, say that gig workers such as freelancers and Uber drivers will also be covered, a major change in how unemployment insurance works.
Small businesses get aid — with conditions. A major sticking point in the negotiations was whether aid should go to businesses or to individuals. New provisions does both: The government will guarantee loans to small businesses and forgive those loans if the companies keep their employees. This gives these businesses a strong financial incentive to avoid layoffs.
Federal Reserve loans — with heavy oversight. This was another controversial provision — billions of dollars in a fund controlled by the Federal Reserve. Opponents characterized this as a slush fund that benefits companies at the expense of their workers. However, additional conditions helped ensure its passage; the government will immediately reveal any recipients, and an inspector general and a congressionally appointed board will monitor it, according to the NYT. The WSJ noted companies receiving these loans cannot do stock buybacks now or in the near future. The total amount of the loan fund is estimated to be about $500 billion.
Health assistance. The bill includes upward of $100 billion in aid to hospitals.
Again, none of these numbers are final, and the bill has not yet been signed, although there is wide agreement it will go through as is. We’ll have more updates as they become available, including information on the mechanism for distributing the aid checks.
We will continue to update you as we get more information on Coronavirus legislation and guidance that may impact you. If you have more questions contact an MCB Advisor at 703-218-3600 or click here.