$2 Trillion Federal Coronavirus Stimulus Package Deal Announced
March 25, 2020
A $2T stimulus package deal was announced by Congress and Administration late last night after lengthy negotiations. It is expected that the package will be passed and enacted within days. The New York Times reports that portions of the bill are still being drafted as of early today, for a vote expected when the Senate convenes this afternoon.
News reports indicate that the bill does the following; details will become more clear when the bill is final/passed:
- Extends unemployment insurance by 13 weeks;
- Provides $1,200 in direct payments to Americans who make up to $75,000 per year (phasing out at $99,000 salaries), plus additional payments to families with children;
- Establishes a $350B lending fund for small businesses that keep their payrolls “steady”;
- Provides $130B for hospitals;
- Allocates $150B for state and local governments;
- Establishes a $500B lending fund, of which $75B is earmarked for specific industries and $425B is available to the Federal Reserve to help broad groups of distressed companies:
- the disbursement of which will be overseen by a Congressionally-appointed panel; and
- the recipients of which must agree to refrain from stock buybacks during the period they take assistance, plus one year; and
- the recipients of which cannot be the family businesses of senior government officials.
- Allows loans to assist small businesses with cash flow if they promise to retain employees. Such loans are to be forgiven if the employer continues to pay employees.
The House is in recess, and it is unclear whether House members will fly to DC to vote on the bill after the Senate votes. Speaker Pelosi has said the House is considering passage by unanimous consent, normally reserved for minor measures. Senate Majority Leader McConnell said, “In effect, this is a wartime level of investment into our nation.” In contrast to the current massive package, the 2008 financial crisis-driven stimulus bill was $800B.