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$1,200 stimulus checks for all? All you need to know about the US coronavirus bailout $1,200 stimulus checks for all? All you need to know about the US coronavirus bailout
(about 1 hour later)
Agreement reached early on Wednesday will give money to most Americans, small-business loans and help for hard-hit industriesAgreement reached early on Wednesday will give money to most Americans, small-business loans and help for hard-hit industries
With large areas of the US shut down, stock markets crashing, industries facing collapse and unemployment certain to soar, the US government is close to finalizing biggest bailout in US history. Here’s what you need to know. With large areas of the US shut down, stock markets crashing, industries facing collapse and soaring unemployment, the US government is set to pass the most expensive bailout in US history in attempts to save the US economy.
What does the bailout look like? Democrat and Republican leaders of Congress, along with White House officials, have been scrambling to make a deal in around-the-clock negotiations and finally announced early Wednesday that they have reached an agreement. The Senate is expected to vote on the bill Wednesday.
Right now, the bill is estimated to be up to $2tn, and will go to businesses, corporations and directly into the pockets of Americans. The details are still trickling out, but here’s what we know so far about the package:
So far, the bill has four main components: What does the stimulus look like?
The bill is worth about $2tn, which will go to businesses, corporations and directly into the pockets of Americans. It has six main components:
Direct payment to most Americans.Direct payment to most Americans.
$250bn to bolster unemployment insurance.
$350bn in loans for small businesses that may be forgiven if firms use them to keep workers on payroll.$350bn in loans for small businesses that may be forgiven if firms use them to keep workers on payroll.
$500bn in aid for hard-hit industries and states and $50bn for airlines.$500bn in aid for hard-hit industries and states and $50bn for airlines.
At least $75bn in aid to hospitals. $130bn in aid to hospitals.
When will this get done? $150bn to help state and local governments.
A preliminary agreement was reached in the early hours of Wednesday morning. The Senate will take the bill to a vote as soon as this morning.
Talks had originally stalled in the Senate on Sunday because Democrats were worried that the bailout did not include enough oversight over corporate loans, and gave too little protection to workers.
What has Congress done so far?
The first spending bill to combat the Covid-19 outbreak in the US was signed by Donald Trump earlier this month and is worth $8.3bn. The money is going to the US health and human services department, state and local health departments and local community healthcare centers. A big chunk was earmarked for international response to the outbreak.
A second bill for paid sick leave and emergency paid leave worth $104bn was passed last week. The legislation excluded workers from large companies with more than 500 employees and allowed companies with under 50 employees to apply for exemptions. The bill mandates 10 days of paid sick leave and creates an emergency paid leave program for parents affected by their children’s schools closing for coronavirus-related reasons. It also expands food assistance programs and aids states’ unemployment insurance programs.
What held negotiations up?What held negotiations up?
There have been some major changes from the Republicans’ original bill. More money will be given to large companies in hard-hit industries, but Democrats have also pushed for strict oversight of the loans. More aid will also be given to the healthcare sector and more funds will be earmarked for unemployment insurance after pushes from Democrats. Senate Republicans introduced the bill last Friday, and a marathon of negotiations took place until an agreement was made Wednesday morning.
Talks had originally stalled in the Senate on Sunday because Democrats were worried that the bailout did not include enough oversight over corporate loans and gave too little protection to workers.
There has been some compromise. Republicans agreed to some major changes from their original bill. More money will be given to large companies in hard-hit industries, but Democrats have also pushed for strict oversight of the loans. More aid will also be given to the healthcare sector and more funds will be earmarked for unemployment insurance after pushes from Democrats.
Are US taxpayers really going to get direct checks from the government?Are US taxpayers really going to get direct checks from the government?
It seems very likely. The plan is for individuals to get up to $1,200 and married couples to get up to $2,400, including $500 for each child. The size of a check would diminish gradually for those whose income is above $75,000, while those earning more than $99,000 will not be getting any checks. The checks will be based on a household or individual’s 2018 tax return. Yes. The plan is for individuals to get up to $1,200 and married couples to get up to $2,400, including $500 for each child. The size of a check would diminish gradually for those whose income is above $75,000, while individuals earning more than $99,000 and couples earning more than $198,000 will not be getting any checks. The checks will be based on a household or individual’s 2018 tax return unless they filed their 2019 tax return, in which case it will be based of their 2019 return.
How is the government helping small businesses? Treasury secretary Steve Mnuchin said last week that checks could be sent out as early as 6 April. The bill earmarks $250bn for the checks.
The Republicans’ plan consists of offering federally backed loans for small businesses with 500 employees or fewer. The plan estimates $350bn will be given to these businesses through loans, which will be capped at $10m per business.
The plan also includes possible forgiveness of a loan if an employer retains their employees through 30 June, incentivizing businesses to keep their employees around for the time being.
Senate negotiators have also worked to include a “payroll tax holiday” for small businesses in the plan.
Will there be corporate bailouts?Will there be corporate bailouts?
Democrats and even some Republicans are adamant that corporations are given fair assistance that will not end up in the pockets of wealthy shareholders or corporate executives.Democrats and even some Republicans are adamant that corporations are given fair assistance that will not end up in the pockets of wealthy shareholders or corporate executives.
The bill includes a little over $200bn in secured loans to airlines and other hard-hit industries. Specifically, $50bn will be up for commercial airline carriers to borrow and $8bn to cargo air carriers (the amount the industry trade groups have asked for), while $150bn for other industries affected by coronavirus, such as hotels and cruise companies. The bill includes $500bn in loans and loan guarantees to hard-hit companies, including commercial airlines and other travel-related companies hit hard over the last few months.
So far, Congress has not itemized which industries will be eligible for bailouts, though there are many that are asking for one. The restaurant industry asked the government for $145bn to help offset losses after dozens of states mandated the closure of many full-service restaurants. So far, Congress has not revealed which companies will be eligible for bailouts, though there are many that are asking for one. The restaurant industry asked the government for $145bn to help offset losses after dozens of states mandated the closure of many full-service restaurants.
What oversight will there be for large companies that take out loans?What oversight will there be for large companies that take out loans?
Oversight of lending decisions will probably go to an independent inspector general and oversight board, the Washington Post reported. Oversight of lending decisions will go to an independent inspector general and oversight board.
Though Trump said, when asked who would provide oversight of the loans, “I’ll be the oversight”, the White House appears to have conceded to Democrats’ concerns. Though Trump said, when asked who would provide oversight of the loans, “I’ll be the oversight”, the White House conceded to Democrats’ concerns.
“The oversight basically is saying that you know you can’t just … exempt everybody and give all your corporate executives, based on the backs of taxpayers, a free carnival,” said Joe Manchin, a Democratic senator from West Virginia. “The oversight basically is saying that you know you can’t just … exempt everybody and give all your corporate executives, based on the backs of taxpayers, a free carnival,” Joe Manchin, a Democratic senator from West Virginia, told the Washington Post.
Companies who receive government assistance may also see restrictions on stock buybacks, which is when a company buys shares of its own stock to increase the value of its shares, ultimately helping their wealthy stockholders and corporate executives. Trump said he would not be opposed to such a ban, though many are worried that the restrictions are not severe enough. Companies who receive government assistance will also see restrictions on stock buybacks, which is when a company buys shares of its own stock to increase the value of its shares, ultimately helping their wealthy stockholders and corporate executives. Commercial airlines have been known for buying back their own shares.
Will Trump be getting any loans for his hotel business?
Nope. Schumer’s office said that there is a provision in the bill that blocks government officials, including members of Congress and Trump and his family, from getting the stimulus’ loans.
What is the package doing for unemployment insurance?
The deal extends unemployment insurance by 13 weeks and covers self-employed and furloughed workers, offering workers $600 a week for those additional four months in addition to what a state will provide through their own program.
How is the government helping small businesses?
The Republicans’ plan consists of offering federally backed loans for small businesses with 500 employees or fewer. The plan estimates $350bn will be given to these businesses through loans.
The plan also includes possible forgiveness of a loan if an employer retains their employees through 30 June, incentivizing businesses to keep their employees around for the time being.
Senate negotiators have also worked to include a “payroll tax holiday” for small businesses in the plan.
How is the government helping the healthcare sector?How is the government helping the healthcare sector?
The Senate’s plan is slated to relieve burden on the healthcare sector by including a “Marshall plan” that will give billions of dollars in aid to hospitals. The bill will relieve burden on the healthcare sector by including a “Marshall Plan” that will give $130bn in grants and assistance to hospitals. The bill also boosts Medicare payments for hospitals treating patients with Covid-19.
The exact amount included in such a plan has yet to be revealed, but now looks close to $150bn – up from an original proposal of $75bn.