$1,200 Second Stimulus Checks, Unemployment Benefits, Student Loan Relief, PPP Loans, School Opening, Coronavirus Testing

$1,200 Second Stimulus Checks, Unemployment Benefits, Student Loan Relief, PPP Loans, School Opening, Coronavirus Testing

Updated July 28, 2020

Senate Republicans unveiled their stimulus package deal proposal at present.

Here’s what you want to know — and what’s inside.

New Stimulus: Heals Act

Senate Republicans at present introduced the Heals Act (Health, Economic Assistance Liability Protection & Schools Act), a ~$1 trillion stimulus package deal proposal as a observe as much as the Cares Act and a response to the Heroes Act, which House Democrats handed as a $3 trillion stimulus plan. Senate Majority Leader Mitch McConnell (R-KY) and a number of other Republicans senators spoke on the Senate ground at present to debate the proposed laws, which can be launched via a number of payments. Here are some highlights about what’s inside (though there are numerous extra provisions):

$1,200 Second stimulus checks

As anticipated, Senate Republicans suggest a one-time, $1,200 stimulus verify. As Treasury Secretary Steven Mnuchin indicated final week, the necessities to obtain the second stimulus verify would be the identical as the primary stimulus verify beneath the Cares Act, which was the $2.2 trillion stimulus package deal in March. So, if you happen to obtained a primary stimulus verify, you then would obtain a second stimulus verify beneath the Republican plan.

Who is eligible for a second stimulus verify?

Under the Republican proposal, based mostly on the primary stimulus verify, second stimulus checks (or Economic Impact Payments) would work like this:

  • $1,200 for every particular person;
  • $2,400 for married/joint filers;
  • $500 for dependents (no age cap, which helps grownup dependents).
  • If you earned lower than $75,000 (people) or $150,000 (married/joint filers), you’d obtain a $1,200 second stimulus verify.
  • Like the primary stimulus verify, the second stimulus verify will likely be decreased by $5 for each $100 of adjusted gross revenue above these revenue limits till $99,000 of adjusted gross revenue for people and $198,000 for married/joint filers.

Previously, McConnell prompt that second stimulus checks might solely be out there to Americans who earn as much as $40,000 a 12 months. However, Senate Republicans apparently have scrapped that concept.

What do Democrats say?

Republicans and Democrats agree that the second stimulus verify must be $1,200. However, Democrats have known as for $1,200 second stimulus checks for dependents (in comparison with $500 beneath the Republicans proposal), as much as a most of three dependents. Some Democrats additionally needed $2,000 a month second stimulus checks. However, Democrats probably will compromise on a one-time stimulus verify, fairly than month-to-month stimulus checks.

Unemployment advantages capped at “70% of wages”

As anticipated, Senate Republicans suggest to chop enhanced weekly unemployment advantages from $600 per week beneath the Cares Act. The decrease weekly unemployment advantages are based mostly on a 70% wage alternative, in response to Sen. Chuck Grassley (R-IA), and will quantity to about $200 per week. A 70% wage alternative signifies that a recipient of unemployment advantages might obtain federal unemployment advantages which can be not more than 70% of the recipient’s revenue when the recipient was final employed. As Mnuchin has mentioned repeatedly, the $600 per week unemployment profit can create a disincentive for recipients to return to work. According to Mnuchin and Director of the U.S. National Economic Council Larry Kudlow, the $600 per week unemployment advantages imply that some recipients obtain more cash whereas they’re unemployed in comparison with then they have been working. Grassley mentioned that unemployment advantages alone received’t stimulate the financial system. Tax provisions will assist Americans get again to work, in response to Grassley. For instance, Republicans would develop alternative tax credit and different tax credit to get individuals again to work. Republicans additionally would enhance the worker retention tax credit (ERTC) within the type of a refundable payroll tax credit. Republicans would enhance the proportion of wages that may be reimbursed from 50% to 65%.

What do Democrats say?

Congressional Democrats wish to prolong unemployment advantages via not less than January 31, 2021, in response to Senate Minority Leader Chuck Schumer (D-NY). Democrats argue that the financial system is in recession and observe that greater than 40 million Americans have filed for unemployment advantages.

Student Loan Relief

Is there student loan aid within the new stimulus? Is there student loan forgiveness? Senate Republicans didn’t point out at present that they’d prolong the Cares Act student loan aid past September 30, 2020 for all federal student loan debtors. That mentioned, Sen. Lamar Alexander (R-TN) proposed a brand new student loan reimbursement plan during which student loan debtors with no revenue would make no student loan funds. Alexander additionally proposed that month-to-month student loan funds can be based mostly on 10% of discretionary revenue as soon as a borrower earns revenue once more. Effectively, if you happen to don’t have any revenue after September 30, you wouldn’t be accountable to pay federal student loans after September 30, 2020. As anticipated, Republicans didn’t embody any student loan forgiveness within the new stimulus.

What do Democrats say?

Democrats wish to prolong the Cares Act student loan aid via September 30, 2021. Democrats additionally would prolong student loan aid from Direct federal student loans to Perkins Loans and a few FFELP loans not owned by the federal authorities. So, via September 30, 2021, beneath the Heroes Act (if handed), you can obtain the next student loan aid:

  1. pause all funds for federal student loans 
  2. set rates of interest at 0%, so curiosity is not going to accrue in your federal student loans
  3. halt assortment of federal student loan debt
  4. “count” non-payment of federal student loan debt towards the 120 required month-to-month funds for public service loan forgiveness.

The Heroes Act additionally contains $10,000 of student loan forgiveness for debtors who’re “struggling financially.”

Liability protections for companies

Sen. John Cornyn (R-TX) mentioned legal responsibility protections as a central part of the stimulus proposal. While he didn’t focus on specifics, McConnell has mentioned that companies, hospitals and colleges ought to obtain five-years of legal responsibility safety, retroactive to 2019.

What do Democrats say?

Given different financial priorities, legal responsibility safety just isn’t a serious precedence for Democrats.

Payroll Protection Program (PPP)

Republicans proposed to increase the Paycheck Protection Program (PPP), which is scheduled to cease taking functions on August 8. Sen. Susan Collins (R-ME) says {that a} small enterprise with 300 or fewer staff might obtain a second forgivable PPP loan if income has declined 50% or extra as a result of Covid-19 pandemic. Sen. Marco Rubio (R-FL) additionally launched a brand new, low curiosity loan for small companies that may enable companies to borrow a 20-year loan at 1% rate of interest.

100% Meal Deductions

To assist the restaurant trade, which has shed greater than 5.5 million jobs in response to Sen. Tim Scott (R-SC), people can deduct 100% of enterprise meals, up from 50%.

$105 Billion For Schools

As anticipated, Republicans proposed $105 billion to open colleges:

  • Okay-12: $70 billion
  • Higher Education: $30 billion
  • Governor’s Discretion: $5 billion

Sen. Richard Shelby (R-AL) mentioned the aim is to open colleges not less than 50% of the time, and Alexander mentioned Republicans wish to fund 135,000 private and non-private colleges. According to Alexander, the aim is to assist the American individuals get “safely back to child care, safely back to school and safely back to work.”

What do Democrats say

This is one other large distinction with Democrats. Sen. Patty Murray (D-WA) and different Democrats launched the Coronavirus Child Care and Education Relief Act:

  • Okay-12: $175 billion
  • Child Care: $50 billion
  • Governor’s discretion: $33 billion
  • Vulnerable students: $12.9 billion

$25 billion in Coronavirus testing

Among different funding priorities to struggle Coronavirus, Senate Republicans suggest $25 billion for Coronavirus testing and speak to tracing. The $25 billion is the same as the $9 billion already licensed in a previous stimulus plus $16 billion of recent spending.

Final Thoughts

McConnell wants a bipartisan invoice to cross Congress earlier than President Donald Trump indicators the potential laws. Can a stimulus deal get carried out? Sen. Lindsay Graham (R-SC) says that half of Senate Republicans will vote “no” on the proposed laws, it doesn’t matter what’s contained in the stimulus package deal. Senators resembling Ted Cruz (R-TX) and Rand Paul (R-KY) oppose the stimulus package deal and additional federal spending after trillions of {dollars} in earlier financial stimuli. Democrats need $3 trillion in monetary stimulus, whereas Republicans try to restrict spending nearer to $1 trillion.

Key Timeline

Theoretically, members of Congress have so long as mandatory to achieve a stimulus deal. Practically:

  • July 27, 2020: Republicans announce new stimulus package deal proposal
  • July 31, 2020: the House of Representatives is in summer time recess after July 31. Representatives are anticipated to delay summer time recess to get a stimulus invoice finalized.
  • August 7, 2020: the Senate breaks for summer time recess after August 7.
  • September 8, 2020: the Senate resumes session.

If Congress doesn’t finalize laws in July or August, then the brand new stimulus might be delayed till after Labor Day.

When will you get a second stimulus verify?

It relies upon when or if a stimulus invoice is finalized and signed by Trump. If Congress finalizes the brand new stimulus earlier than August 7, it’s doable that second stimulus checks might be despatched as early as late August. Otherwise, second stimulus checks might be delayed.

Related Resources

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