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  • Writer's pictureMichael Trout

Congress Agrees on New Coronavirus Stimulus; $600 Payments to Most Americans

The plan would provide direct payments of $600 to most Americans and $300 per week in enhanced unemployment benefits through March, according to lawmakers and aides. Expiring programs for gig workers and the long-term unemployed also would continue.

The House and Senate are set to vote Monday on a roughly $900 billion pandemic relief bill that would be the second-biggest economic rescue measure in the nation’s history.

The aid package will be attached to a $1.4 trillion measure to fund government operations through the end of the fiscal year, and congressional leaders said they expect the legislation to easily pass both chambers. The White House said President Donald Trump would sign it.

Senate Majority Leader Mitch McConnell, House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer announced the accord on Sunday.

The deal followed more than a week of furious negotiations sparked by a group of Democratic and Republican senators who drew up their own compromise proposal and urged their leaders to act.

It also came at the last possible moment for Congress to act before lawmakers are set to leave Washington for their year-end break.

The plan would provide direct payments of $600 to most Americans
$300 per week in enhanced unemployment benefits through March
Billions in funding for Vaccine Distribution & Schools
Almost $300 Billion for Small Businesses

Expiring programs for gig workers and the long-term unemployed also would continue.

More PPP

There would be $284 billion for the Paycheck Protection Program, which provides forgivable loans to small businesses. The package includes money for transportation -- including for airlines -- vaccine distribution, schools and universities, food aid, and many other provisions.

Negotiators couldn’t bridge partisan differences over a liability shield for companies wanted by some Republicans, and aid for state and local governments that Democrats had demanded, and left those out. A last-minute dispute over the Federal Reserve’s emergency lending authority threatened to derail an agreement until a compromise late Saturday cleared the way for the broader deal.

Because it’s being included with the government funding legislation, the haggling over the relief package forced Congress into a third temporary funding to avert a partial government shutdown. The House and Senate late Sunday passed a one-day extension to give time for votes on Monday.

“At long last we have the bipartisan breakthrough the country has needed,” McConnell said on the Senate floor in announcing that the agreement had been reached.

Pelosi and Schumer lauded the deal, although they expressed disappointment that the package wasn’t bigger.

“While this bill is far from perfect, nor is it the bill that we would pass if Democrats had a majority in the Senate, it is a strong shot in the arm to help American families weather the storm,” Schumer said at a news conference with Pelosi.
“We will do more, we must do more.”

The deal came about after a months-long standoff that followed passage in March of the largest in a series of pandemic relief packages: a $1.8 trillion mix of spending and tax breaks that represented the biggest such measure in U.S. history. Since then, the economy has struggled to fully recover and another round of lockdowns is threatening to put millions of jobs at risk at a time U.S. deaths from the novel coronavirus have surpassed 300,000.

Pelosi and the Trump administration were close to a $2 trillion deal before the Nov. 3 election -- but talks were halted abruptly in the lead up to November 3rd. Leading many to become frustrated with congress.

While the deal would represent a substantial infusion of aid, it also will put immediate pressure on the potentially incoming Biden administration to spell out the next steps, and then wrangle new measures through a deeply divided Congress.

Joe Biden last week called the emerging deal an “important down payment on what’s going to have to be done at the end of January, the beginning of February. ”

McConnell has said he expects another relief proposal from Biden, should he take office, but hasn’t backed away from his opposition to direct aid to states and localities, or his insistence that employers be protected from Covid-19-related lawsuits. That signals the fight over any new round won’t be any less contentious.

Into Poverty

The accord comes as the economy is showing signs of deterioration. Some 7.8 million Americans have fallen into poverty since June as benefits from the previous Covid relief package lapsed, according to an analysis of ongoing Census data by economists at the University of Chicago and University of Notre Dame.

The 2.4 percentage point rise in the estimated U.S. poverty rate through November is nearly double the largest annual increase since the 1960s, the economists said. The increase in poverty has been sharpest in states such as New York, California, Illinois, Michigan, and Pennsylvania.

Separately, a government report last week showed U.S. retail sales tumbled more than expected in November, while the latest weekly jobless claims figure jumped to the highest level in three months. Payrolls might even contract in December, said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co.

The relief package “should be very helpful for the economy, Nine hundred billion is a large number,” Feroli said. “You’re talking about a 2% to 3% boost to GDP” over time, he estimated.

The package also has implications for the still-unsettled contest for control of the Senate. McConnell told GOP senators on a private call Wednesday that passage will help Republican Senators David Perdue and Kelly Loeffler, who face Jan. 5 runoffs, according to a person familiar with the conversation.

Democrats would gain control of the Senate if both lose. McConnell specifically mentioned on the call that their Democratic opponents, Jon Ossoff and Raphael Warnock, were using the delay in getting a deal and additional stimulus payments as attack lines in their campaigns.

Both sides have accused the other of using this stimulus package for political gain rather than for the good of the people. Many have been critical of the package and there are national protests against the continued lockdowns and restrictions that are destroying small business and jobs across the country.

Last week the FDA approved the first Covid-19 Vaccine from Pfizer, and today The Moderna COVID-19 was approved and also began to ship. Distribution of this vaccine nationwide has increased optimism for an end to the pandemic and return to normal for Americans, and the World. Less than a year from the arrival of the virus there is finally an end in sight.

With the presidential race still officially contested, the country deeply divided, The virus surging and the Holidays approaching the American people certainly needed something from our leadership but it seems that the bill m,ight be too little too late for most Americans.

The $600 one time payment and unemployment benefits will be helpful in the short term, but according to experts, these accommodations will not provide a permanent solution.

These are certainly tumultuous times but good news is it seems as if SOME relief is finally on the way. We will continue to keep you updated as the story develops.

Hope everyone is staying safe and healthy,

- Mike


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