The House approved the sweeping measure by a voice vote, as strong majorities of both parties lined up behind the most colossal economic relief bill in the nation’s history. It will ship payments of up to $1,200 to millions of Americans, bolster unemployment benefits, offer loans, grants and tax breaks to businesses large and small and flush billions more to states, local governments and the nation’s all but overwhelmed health care system.
Trump said he would sign the measure immediately.
According to the Tax Foundation,
The bill includes:
- Expanded unemployment insurance (UI) for workers, including a $600 per week increase in benefits for up to four months and federal funding of UI benefits provided to those not usually eligible for UI, such as the self-employed, independent contractors, and those with limited work history. ..Additionally, the federal government will fund an additional 13 weeks of unemployment benefits through December 31, 2020 after workers have run out of state unemployment benefits.
- $350 billion allocated for the Paycheck Protection Program, which is meant to help small businesses (fewer than 500 employees) impacted by the pandemic and economic downturn to make payroll and cover other expenses from February 15 to June 30. Notably, small businesses may take out loans up to $10 million—limited to a formula tied to payroll costs—and can cover employees making up to $100,000 per year. Loans may be forgiven if a firm uses the loan for payroll, interest payments on mortgages, rent, and utilities and would be reduced proportionally by any reduction in employees retained compared to the prior year and a 25 percent or greater reduction in employee compensation.
- Recovery Rebate for individual taxpayers. The bill would provide a $1,200 refundable tax credit for individuals ($2,400 for joint taxpayers). Additionally, taxpayers with children will receive a flat $500 for each child…We estimate that the rebates would increase taxpayer after-tax income by about 2.59 percent, ranging from 16.33 percent at the lowest quintile and dropping to 1.89 percent for the 80th to 90thpercentiles…We estimate that nearly all filers below the 80th percentile will receive a rebate, but only 0.1 percent of filers above the 99th percentile will receive a rebate due to the rebate phaseouts.
Much more in the TF analysis. From the AP,
It is unlikely to be the end of the federal response. Pelosi said issues like more generous food stamp payments, aid to state and local governments and family leave may be revisited in subsequent legislation.
The magnitude of the federal commitment is hard to conceptualize.
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.
In addition to the small business relief mentioned above,
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.
Emily Makings at the Washington Research Council earlier wrote of the negotiated agreement that Washington stood to receive $3 billion in assistance.
As passed by the Senate, it includes $150.0 billion for a relief fund for state, local, and tribal governments (Sec. 5001). (This is the amount that the National Governors Association requested.)
Of the $150.0 billion, $8.0 billion would be reserved for tribal governments and $3.0 billion would be reserved for DC, Puerto Rico, and other territories. Each state would receive at least $1.25 billion. The remaining $76.5 billion would be split among the states according to population. Jared Walczak of the Tax Foundation estimates that Washington would receive about $2.95 billion.
Additionally, the federal government would make direct payments to certain local governments from the amount reserved for those localities’ states. Counties and cities with populations of at least 500,000 would be eligible. In Washington, this includes King County, Pierce County, Snohomish County, Spokane County, and Seattle.
She provides estimates of what each jurisdiction will receive. According to her calculations, the state would get just over $2 billion Important:
…governments may only use these funds for “necessary expenditures incurred due to the public health emergency” from March 1, 2020 to Dec. 30, 2020. Additionally, they may only be used for costs that were not accounted for in the most recently approved state or local budget.
That means that these federal funds would be in addition to the $200 million that has been appropriated from Washington’s rainy day fund in response to COVID-19 (even though EHB 2965 states that federal funds must be used first, if available, and that any federal reimbursements must be deposited in the rainy day fund).
Now to see how quickly the money flows to eligible parties.