WASHINGTON — After months of delays, Congress finally has agreed to a $900 billion deal on COVID-19 relief, giving jobless Americans some respite with direct payments and unemployment insurance, as well as funding for public schools and vaccine distribution.
Perhaps of greatest interest to most Americans will be the stimulus checks. The final deal authorizes $600 in direct payments to individuals who made less than $75,000 in 2019. Essentially, if you received a check in the spring or summer, this check should be half as much.
The good news is that Treasury Secretary Steve Mnuchin said some Americans could see their money directly deposited into their bank accounts by next week, since the Internal Revenue Service had practice sending the rebates earlier this year. Most payments, however, will likely take longer.
The payments will go to every adult and child, meaning a family of four would receive $2,400 from the federal government — as long as a married couple’s collective income is less than $150,000. But immigrants who are not lawful permanent residents and adult dependents are cut out of the deal.
Other major provisions of interest are the changes to unemployment benefits. Instead of expiring next week, federal benefits for gig workers and the long-term jobless will continue until March 14 — an additional 11 weeks. Unemployed Americans will be eligible for an additional $300 a week in jobless benefits during that time, on top of what they receive from the state or federal program paying their claim.
Democrats also won an additional 11 weeks of jobless pay for workers who have now been unemployed for so long they’ve exhausted the state and federal benefits currently available.
The stimulus checks account for $166 billion and the unemployment provisions cost $120 billion, less than the $180 billion for unemployment the bipartisan group that first negotiated the compromise proposed. Top lawmakers agreed to shorten the duration of the unemployment insurance benefit in order to help make room for the direct payments.
Republicans insisted that the bill cost less than $1 trillion, an arbitrary constraint that explains why the direct payment are $600 instead of $1,200, like last time.
The biggest costs of the bill are the small business sections. The GOP-favored Paycheck Protection Program gets $284 billion for forgivable loans to businesses. In total, business provisions account for $325 billion — once you account for $20 billion in Economic Injury Disaster Loans, $15 billion for live entertainment venues and movie theaters, and several billion for other Small Business Administration programs.
Schools are also big winners in the deal, with K-12 schools, colleges and universities securing $82 billion. More than $54 billion of that will go to public schools, and more than $20 billion will go to public and private colleges.
Nearly $70 billion of the coronavirus relief deal will actually go to fighting the coronavirus. There is $22 billion for testing and tracing, $20 billion for vaccine procurement, and $9 billion for vaccine distribution.
There is also $45 billion for the transportation industry, $25 billion for rental assistance, $13 billion for increases in food benefits, $13 billion for farmers and ranchers, $10 billion for child care providers, $10 billion for the Postal Service, and $7 billion for broadband access.
Carlos Barria / Reuters Senate Majority Leader Mitch McConnell (R-Ky.) wears a protective face mask as he walks down a hallway of the Hart Senate Office Building in Washington, May 12, 2020.
After months of stalemate, key to reaching a deal was what was left out — most notably funding for states and cities.
Democrats wanted aid for those governments, which have seen their revenue dramatically fall because of the pandemic, but Republicans negotiated a compromise in which Democrats would leave out $160 billion in state and local aid on the table in exchange for Republicans dropping their so-called liability shield.
The liability shield would have protected businesses from lawsuits related to coronavirus exposure, but the language Senate Majority Leader Mitch McConnell (R-Ky.) pushed for would have also affected unrelated medical malpractice suits and superseded bedrock labor laws that protect workers from wage theft and discrimination.
Ultimately, Democrats agreed to hold back on state and local funding so that Republicans would drop the liability provisions, though Democrats and progressives are already calling on renewed negotiations over state funding once Joe Biden takes office.
Democrats did, however, extend the deadline by a full year for states and cities to use the funding Congress granted to them in previous Cares Act aid. Funding for state and local governments was set to expire by the end of year and would have had to have been returned to the federal government if left unspent.
That said, conservatives did win some of their pet provisions, including a tax break for corporate meal expenses spearheaded by Sen. Tim Scott (R-S.C.) and lobbied for by President Donald Trump. Referred to as the “three-martini lunch deduction,” Republicans say this tax provision will help the restaurant industry. Critics argue it’s little more than a perk for big corporate firms that want to write off their steak dinners — and will do next to nothing for struggling businesses.
The coronavirus deal is hitching a ride on a massive, $1.4 trillion spending bill that funds all departments of the government until October.
And there’s also a surprise medical billing measure that was added to the legislative package. Those provisions would force health providers to work with insurers to settle on a fair price for unexpectedly out-of-network care instead of hitting patients with massive bills.
Republicans secured at least one policy change that seems designed to head off Democratic demands for more help from Congress next year. New federal unemployment claims will be disallowed after March 14, but people already receiving benefits can continue until early April. The gradual reduction eliminates the kind of sudden cutoff that pressures lawmakers to act. It shows Republicans are committed to ending the benefits in springtime.
In reality, many workers won’t receive the benefits until well into this short duration, and then the states will be forced to cut it off again. Andrew Stettner, The Century Foundation unemployment policy expert
Andrew Stettner, an unemployment policy expert with The Century Foundation, said the bill’s jobless pay provisions are inadequate, and it could take state workforce agencies a while to implement a slate of federal changes for programs that will only exist for another 11 weeks.
“In reality, many workers won’t receive the benefits until well into this short duration, and then the states will be forced to cut it off again,” Stettner said in an email.
Stettner said it would have been better for the extension to “last to a point closer to where the vaccine can roll out and people can go back to their shuttered occupations, and send their kids to day care or school.”
That’s why Tommy Moran of Greensboro, North Carolina, is so thrilled that he’ll get a direct payment from the IRS. He stands to gain from the increase in unemployment benefits, but the North Carolina Department of Labor has been taking a long time to sort out his claim.
“That’s a great thing because I’ll get that right around new year’s,” he said. “When I heard that was going through I was like ‘Yes.’”
Moran, 50, has been on leave from his job with a private security firm since March. He exhausted his state-funded unemployment benefits in November and has been waiting on benefits from the federal Pandemic Unemployment Assistance program, which will remain in place through March 14 under the new legislation. Congress originally created the program in March to cover people like gig workers who are ineligible for regular unemployment compensation.
Moran should be eligible both because he has a heart condition that puts him at high risk of severe illness from the coronavirus and also because he is the primary caregiver for his teenage daughter, who has been attending school from home. State workforce agencies have struggled to pay the pandemic benefits. Moran said he’s handed over doctor’s notes but has gone six weeks without a payment, which is why he’s looking forward to the IRS rebate.
Moran’s household should receive $1,800 in direct payments ― $600 each for him, his wife and their daughter. He thinks it’s ridiculous that lawmakers had such a hard time coming up with legislation to help people survive a plague.
“When it comes to wars, they have all the money in the world,” he said.
Andrew Kelly / Reuters A person walks by the entrance of the New York State Department of Labor offices, which closed to the public due to the coronavirus disease, in Brooklyn, New York, March 20.
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