After five days of deliberating, Congress has reached an agreement on a Covid-19 economic stimulus package.
Much of the legislative language has yet to be revealed, but the broad strokes aim to assist corporations, small business owners, medical facilities, and disproportionately affected individuals during the Sars-Cov-2 pandemic.
Before the two trillion dollar proposal moves on to the House of Representatives—in the form of a written bill, let’s unpack the confirmed pillars and their implications for each relevant sector.
The Covid-19 stimulus package
Single-households that earn $75,000 or less a year (as per their latest tax return) will be supplied with a one-time payment of $1,200. Couples who earn $150,000 annually will receive a one-time payment of $2,400 with an additional $500 per child within that household. These benefits are capped around the $99,000 income level and tapper between $75,000 and $100,000.
Unemployment benefits will also be expanded to include gig workers, self-employed contractors, and freelancers. These members of the workforce will have an approximation of their salaries remunerated on a state by state basis for the ensuing four months.
“It will be harder [to calculate] because these workers don’t have a W-2 or an average weekly wage,” Seth Harris, former Deputy U.S. Secretary of Labor, told Forbes of the pioneering addition. “These folks have income that varies dramatically from week to week or month to month.”
State benefits will increase to $600 per week during that same four-month window, and regular state unemployment aid will be extended for an additional 13 weeks.
The most controversial element of the stimulus bill has undergone changes to address criticism regarding the lack of oversight for the proposed industry relief funds.
The $500 billion of corporate aid will be supervised by an inspector general alongside a congregational board to properly administer provisions and prevent instances of fraud. After any contract or loan is made with the Treasury or the Fed, the full detail of the loan document will be published and made available to the public shortly thereafter.
Three-hundred and sixty-seven billion dollars will be supplied to small businesses to put toward payroll, and employers will be able to defer payment of the 6.2% Social Security payroll tax.
Lost salaries will additionally be backed up by federal installments that operate like grants to allow business owners to keep their employees staffed during the economic downturn.
“This is worker-friendly, workers first. We didn’t want to put corporations first, we thought the original bill did that too much. Senior United States senator, Chuck Schumer said in a media release. “So many people have been thrown out of work; through no fault of their own, the restaurant closes, the small business closes. Most of them will get their full salaries or very close to it. God willing, when this horrible crisis is over these businesses can reassemble because these employees have not been scattered to the wind.”
Companies will be given a $50 billion tax credit to facilitate employee retention.
Industries that have been critically impacted, namely airlines and cargo carriers will receive $25 billion and $4 billion in direct financial assistance respectively.
The principal goal of these relief efforts is to maintain the status quo so that consumers can inject liquid into markets immediately after Covid-19’s suppression. If consumer confidence remains low once this pandemic is properly dealt with we’re looking at a pluralistic crisis, beginning with a recession and ending with a barbed populist renaissance.
Employment is set to rise to 30% in the US as a consequence of Covid-19. Health insurance is one of the core benefits stripped away from workers a month after termination. Thirty-percent of Americans will be uninsured as we endure the most aggressive viral outbreak since 1918.
“Unemployment offices are chronically underfunded, under-resourced, lacking in technologies and really swamped as it is—they all of a sudden were hit with the largest unemployment tsunami ever,” Harris told Forbes. “It’s not the least bit surprising that they’re scrambling to try and keep up. But they’ll get to everybody and they’re responding. Folks need to keep persisting.”
Although health care benefits were notably absent from the pillars mentioned by senate leaders, there is some legislation in place that might help the working class weather the storm.
Under the Families First Coronavirus Response Act employees of businesses with fewer than 500 employees, will be given paid sick leave for two to 12 weeks. Employers will be fully reimbursed by the federal government within three months via 100% tax credits.
Single household workers are eligible for 80 hours of sick leave with full pay, capped at $511 per day, or a collective $5,110 per worker, if they are unable to come into work or work remotely due to self-quarantine, Covid-19 medical treatment, are at risk for shedding viral debris, or are mandated to remain quarantined by the government. Part-time workers will receive a proportionate share of the benefits above.
If you are currently staying home to care for someone who has been infected by the coronavirus or is suspected of having it, or for a child whose school or daycare is closed, the two weeks of sick pay will be two-thirds of compensation and capped at $200 a day or an aggregate $2,000 per worker.
Individuals who qualify for the Families First Coronavirus Response Act are eligible to receive up to 12 weeks of family leave (with the first two weeks unpaid) if they must stay home with children whose schools and daycare centers have closed at a rate of two-thirds of pay, with a maximum payment of $200 per day, or an aggregate $10,000 per worker.
The new stimulus bill did address the crisis by way of first responders, even if there isn’t any clear recourse for vulnerable unemployed citizens. Medical aid subsumes a Marshall plan to finance physicians, nursing homes and hospitals with $150 billion.
There are still details to be ironed out and debates to be had about the most effective steps going forward, though time is most certainly of the essence.
Democratic House Speaker Nancy Pelosi has expressed interest in employing unanimous consent, which means Democrats and Republicans would be asked to agree that no one will reject the aforementioned proposals while the bill is being written. This action is meant to expedite the process for workers who are reeling from two weeks without pay.
In this instance, the urgency has been met with acclamation. The aspiration to neutralize SARS-Cov-2 by Easter so that businesses can try and regain momentum, however, has inspired virologists, medical experts and employers alike to reiterate the driving force of this black swan phenomenon.
The economic downturn is one of the many costs of a fast-acting mutated pathogen. The bulk of economic efforts might best be served reducing its spread and servicing its victims, not resuscitating establishment agendas that worsened the outbreak in the first place.