21:20 GMT25 September 2020
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    Oil Prices Slump, Coronavirus Fears Send Global Economy Into Turmoil (109)
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    Senate leaders and the Trump administration agreed to a historic bill to alleviate the economic impact of the coronavirus pandemic by flooding the economy with a 13-digit sum of money. Here’s a glimpse into what the deal will offer.

    The just-agreed coronavirus emergency aid bill is set to become the largest by far in American history.

    The package is worth around $2 trillion, which would make it more expensive than the 2008 bank bailout and the 2009 stimulus combined.

    It is expected that the text of the historic bill will be released later in the day, before it heads to the Senate floor for a vote. All the details are yet to become public, but here are some of the basics:

    Individuals

    The pandemic and the social distancing rules aimed to curb its spread have forced many businesses to resort to layoffs and furloughs. The revamped bill would provide one-time direct payments of $1,200 to all adults who make up to $75,000 a year, $2,400 per married couple, and $3,000 for family of four, according to AP.

    The more a person makes, the smaller the check: payments would be phasing out starting at $75,000 for individuals and will end completely at $99,000. The White House also plans to send out $500 to each child. This means that a lower-income family of two parents and one child would receive $2,900. Those with no or little tax liability would receive the same check as others.

    The proposal also seeks $250 billion in expanded unemployment benefits: every unemployed worker would receive $600 every week for four months, on top of what states already provide to them as base salary compensation (the idea is that an extra $600 per week would give 100 percent of an average wage). Senate Minority Leader Chuck Schumer, who was negotiating the deal for the Democrats, dubbed this provision “unemployment compensation on steroids”.

    Small businesses

    The bill seeks to provide $367 million in loans to distressed small businesses and grant them an “employee retention” tax credit so that they can keep employees on payroll and cover half of their paychecks. Companies would also be able to defer paying the 6.2-percent Social Security payroll tax.

    Corporations

    The Treasury would give loans to industries out of a $500-billion money pot. The Republicans had to make concessions regarding that fund after the Democrats criticised it for lack of oversight.

    An inspector general and a congressional panel would monitor where the money goes and on what terms to prevent unfair practices; the package proposes that every loan document be made public.

    Troubled airlines will get $25 billion in direct financial aid, with $4 billion set aside for air cargo carriers.

    Any corporation that accepts government loans during the term of government assistance plus one year will be banned from buying back their own stocks, a common practice used to prop up tumbling stock prices.

    The Senate Democrats also added a provision that bans businesses owned by the President, Vice President, members of Congress and the heads of the executive branch from receiving loans or investments through that fund. This also applies to their children, spouses, and in-laws.

    Public health and state aid

    Hospitals and health systems across the country are expected to get $130 billion in emergency grants, while billions more would be spent on medical and personal protective equipment.

    State and local governments, which are facing delays in tax payments, would get $150 billion. Some $240 billion is set aside for additional emergency appropriations and safety net programs: food stamp benefits, child nutrition, the Centres for Disease Control, and public health and transportation agencies. Another $30 billion would be allocated to emergency education funding and $25 billion to emergency transit funding.

    What’s next?

    The Senate, where Republicans have a narrow majority, is scheduled to have a vote on the proposal in the afternoon; the bill is likely to pass there, but the timeframe is not clear for a vote in the lower chamber, which is currently on recess due to the coronavirus. Two members of the House and one senator have recently tested positive for the coronavirus illness COVID-19.

    Dozens of representatives have spoken out in support of a remote vote, but a report commissioned by House Speaker Pelosi concluded that a system that would enable such a vote could become vulnerable to cyber-attacks or get challenged in court, and it is likely impossible to set it up in time,

    Pelosi said in a Tuesday interview that she hopes to pass the bill via unanimous consent, a procedure that does not require the lawmakers’ physical presence. However, if any single lawmaker objects, this would hold up the vote and prompt the entire chamber to return to Washington. Pollitico cites a Republican whip team source as saying that there is “a strong possibility” of that happening, while several self-styled progressives in the Democratic Party, including Rep. Alexandria Ocasio-Cortez, have publicly criticised the current proposal as well.

    Topic:
    Oil Prices Slump, Coronavirus Fears Send Global Economy Into Turmoil (109)
    Tags:
    Chuck Schumer, package, stimulus, coronavirus, COVID-19, US Senate, United States
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