“Indeed, this is a level of investment in wartime in our country.” This is how Kentucky Republican Mitch McConnell, the majority leader in the Senate, described the $ 2 billion stimulus package agreed to early Wednesday in the US House of Congress.
At a time of major partisan divisions in Washington, American politicians were able to reach a compromise in a few tense days over a large injection of government money into the economy, to limit the damage caused by the coronavirus epidemic.
Although the text of the legislation has not yet been made public, it is expected to be approved by the Senate on Wednesday and then by the House of Representatives, which is controlled by the Democrats. The success of the package will depend on how quickly it can be implemented, and there are doubts about its sufficiency, despite its massive size.
Some lawmakers and administrative officials have suggested that additional funds from Congress may be required depending on the economic impact of the pandemic.
Here are the main provisions.
Earlier this month, White House officials rejected the need for direct cash transfers to American households, but quickly turned to “helicopter money,” as it became clear that many families would need income support as the economy stopped.
Payments to American families from the US Treasury are worth $ 1,200 per adult, or $ 2,400 per couple, with additional payments for children. Payments will be phased out starting at an annual income of $ 75,000 per person, or $ 150,000 per couple, so that the wealthiest families will see no benefit.
Rescue of companies
Legislation sets aside $ 500 billion for loans to companies affected by the coronavirus, including $ 25 billion for passenger airlines, $ 4 billion for freight airlines and $ 17 billion for businesses “essential to maintenance of national security ”. The remaining $ 454 billion would be disbursed through government loans and loan guarantees, including through lending mechanisms put in place by the Federal Reserve.
The $ 500 billion plan was among the most controversial in the package, with Democrats calling it a corporate bailout with limited liability.
In the end, the agreement provides for additional supervision of the fund by an inspector general, like the $ 700 billion bailout fund from the Wall Street asset rescue program (Tarp) set up during the financial crisis of 2008. The Democrats also removed provisions allowing companies to delay disclosure of their participation in the program and obtained assurances that the companies related to Donald Trump and his family, as well as members of Congress and chief executives. ‘executive agencies, would not receive government assistance.
Some economists estimate that unemployment lists will quickly soar to include millions more Americans, Congress and the White House have decided to increase unemployment benefits by $ 600 a week for four months, which will come s ” add to the plaintiff’s state unemployment benefits, according to Chuck Schumer, the Senate’s best Democrat. Payments vary by state, averaging around $ 385 per week.
The US unemployment benefit scheme itself has been expanded to cover the self-employed and workers in temporary jobs in the “gig economy”. Original legislation had applied the increase for three months, but the Democrats were able to get another month in the last round of talks.
Schumer called this part of the package a “Marshall Plan” for the American medical system. It includes $ 150 billion in funding for hospitals, personal and protective equipment for healthcare workers, test supplies, staffing and training, and new construction to house patients, according to the description of the plan by M. Schumer.
Much of the money will go through state and local governments, which are at the forefront of the American battle against the coronavirus.
Help for small businesses
Legislation Provides $ 367 Billion in Loans and Subsidies for Small Businesses, with Less Than 500 Employees, Who Have the Biggest Impact as Americans Socialize, Many Local Authorities Force Non-Essential Businesses to close temporarily.
Marco Rubio, the Florida Republican and chairman of the Senate Small Business Committee, said on Fox Business that small businesses would be able to obtain loans representing 250% of their monthly payroll from approved lenders. As long as they used the money to pay the employees or the rents and leases associated with their business, they would not have to repay the money, which would effectively make it a subsidy.
“It is money that has to get into these hands very quickly, before these doors continue to close and people continue to be laid off every day,” said Rubio.