As many have heard, Congress (made of the Senate and House of Representatives) have voted on a “stimulus package” which was sent to The President and signed into law or “passed”. There are many thoughts and opinions of the latest stimulus package some of which are bred from false or inaccurate information. This week I wanted to take a deep dive into the package and break down what it means to you and me! This topic can be dry and confusing, but it is your money and therefore deserves some attention.
The first thing to understand is that the legislation that was passed by both the Senate and Congress and then signed by President Trump was not just a Covid-19 stimulus package. The legislation was also a federal spending bill as well as a Covid relief package. The reason this distinction is important is because the bill includes a budget to fund many activities outside of the Covid crisis. President Trump, upon review of the bill on December 24th, demanded that there be removal of certain items from the bill unrelated to the Covid crisis saying that the focus of Congress should be on the American people and getting them the help they need.
The legislation presented to the President was called the Consolidated Appropriations Act of 2021 and consisted of the fiscal year 2021 appropriations bill and a spending package that contains $900 billion in emergency Coronavirus relief to protect the lives and livelihoods of the American people. For more information see the link below:
As noted in the name, the bill is a consolidation of 2021 fiscal funding as well as Covid-19 relief. In his initial opposition, President Trump listed foreign aid, wildlife conservation and other non Covid relief funding as reasons why he initially did not want to sign the bill. However, these items were under the fiscal budget and not the Covid relief package looking to be funded. Here is what the current Covid relief package as written would include in a brief breakdown from this CNN article:
· The jobless would receive a $300 weekly federal enhancement in benefits for 11 weeks
· Eligible families would receive an additional $600 per child
· The payments start phasing out for individuals with adjusted gross incomes of more than $75,000, and those making more than $99,000 would not receive anything
· The Pandemic Unemployment Assistance program expands jobless benefits to gig workers
· The Pandemic Emergency Unemployment Compensation program provides an additional 13 weeks of payments to those who exhaust their regular state benefits
· Federally funded $100 per week additional benefit to those who have at least $5,000 in annual self-employment income but are disqualified from receiving Pandemic Unemployment Assistance
· Full federal financing of extended benefits through mid-March, providing up to 20 additional weeks of payments depending on a state's unemployment rate
Small Business Aid:
· Reopen the Paycheck Protection Program
· Reduce the amount a small business can borrow from $10 million to $2 million, give businesses more flexibility on how they spend the money and simplify the forgiveness process for loans under $150,000
· Extends withheld tax payback as small businesses now have until the end of 2021 to increase their employees' withholding to pay back the taxes owed
· $12 billion for minority-owned businesses
· Expands eligibility to more nonprofits as well as local newspapers, TV and radio broadcasters
· $15 billion grant program for live venues, theaters and museum operators that have lost at least 25% of their revenues
· Provides $82 billion in aid for K-12 schools and colleges
· $10 billion is included to support childcare providers that have struggled because of the pandemic
· Extends until January 31, the eviction protection set to expire at the end of the year
· Provides $25 billion in rental assistance for individuals who lost their sources of income during the pandemic
· Raises Supplemental Nutrition Assistance Program (SNAP) benefits by 15% for six months but would not expand eligibility
· $20 billion for the purchase of vaccines so they can be available at no charge for those who need it, as well as another $8 billion for vaccine distribution
· Gives states $20 billion to assist with testing
· Adds $3 billion to the $175 billion fund for hospitals and health care providers for reimbursement of health care-related expenses or lost revenue resulting from the pandemic
For the full bill please see the link below, I recommend making use of the table of contents at the beginning as the bill is lengthy and verbose…
President Trump was initially very against signing the bill as written. In particular he highlighted his disapproval of Federal foreign aid and wildlife funding. The President also made a request to congress to get personal stimulus checks to every American consisting of the dollar amount of $2000. While the Democrats had initially planned for significantly more stimulus funding than what has been signed into law, their Republican counterparts rejected the proposed bill and responded with a counteroffer consisting of 1.4 Trillion-dollar stimulus, down from the 3.4 Trillion-dollar plan proposed by House Democrats. The key point here is that while Democrats had initially planned for a larger relief package, negotiations with the typically fiscally conservative Republicans drove down the total amount of relief aid. However, this stance was directly rebuked by President Trump who all but endorsed the Democrat’s initial relief package with his statements Friday evening.
On Sunday, December 27th, President Trump signed the Consolidated Appropriations Act of 2021 enacting both the Covid relief discussed above as well as the federal fiscal budget for 2021. This is a stark reversal from his position early in the weekend in which he said he would not sign the bill. The late signing of the Consolidated Appropriations bill by President Trump will cause brief delays of unemployment benefits because the previous programs have expired and it will take a few days to restart them, however, the general consensus is that while the delays were ultimately needless because the bill was delivered prior to federal aid program expirations. Treasury Secretary Mnuchin has vowed to work diligently and utilize all the tools of the Treasury to distribute payments in a timely manner. Congress has approved a second bill bringing the personal stimulus check amount from $600 to $2000 as promised by President Trump. The bill was approved by the house and at time of writing is sitting in the Republican controlled Senate as they debate on whether to part with their long-held stance to oppose more funding and side with President Trump’s request for more money.
While this topic is confusing and dry there are some really important things happening that we should all be aware of. It may or may not affect you but will certainly affect someone you know and therefore deserves our attention.
And that’s it! We made it! 2020 is almost over. Please keep an eye out for a survey from us on Friday January 1st, 2021. It will likely be an email containing a link to a survey monkey or google survey. We would appreciate any and all feedback as we continue to grow and tailor our letter to better suit your needs and the best way to do this is to keep getting to know one another!
Ben Velardi, Author/Founder