Not Just Stimulus — Aid
On March 27 Trump signed into law a $2 trillion fiscal stimulus package. Named the largest emergency aid package in U.S. history, the package does more than boost spending and hiring: It provides immediate income support — whether stimulative or not — to the tens of millions who can’t get back to work because it isn’t biologically safe to be around their coworkers. The bill includes the following components:
- Expanded Unemployment Insurance: In addition to respective state benefits, $600 per week increase in benefits for up to four months. Eligibility expanded to include gig workers and freelancers. Waiting periods and work-search requirements eliminated.
- Direct Loans to Small Businesses: $350 billion to support the Fed’s Main Street Business Lending Program that will provide loans to eligible small and midsize businesses. Click here for a fact sheet on impacts for small businesses and non-profits.
- Direct Loans to Distressed Companies: $500 billion provided to companies.
- Funds for the Nation’s Healthcare System: $130 billion for hospitals and $150 billion to the state and local governments that administer vital healthcare programs.
- Waivers for Federal Student Loans: In addition to the previously waived two months of payments and interest, there will be automatic payment suspensions for any student loan held by the federal government until September 30.
- Waivers for Retirement Accounts: For the calendar year 2020, there is no requirement to take a minimum distribution from any individual retirement accounts or workplace retirement savings plans, like a 401(k). Coronavirus-related withdrawals of up to $100,000 may be taken out of retirement savings accounts without the usual 10 percent penalty.
- Waivers for Charitable Contributions: New tax deductions are available for those who gave up to $300 in monetary donations to a public charity from January 1, 2020 throughout the year. Donors can deduct 100 percent of their gift against their 2020 adjusted gross income.
It is unclear when exactly payments will be delved out. While the goal is to have this program up and running within three weeks, some Senate officials are saying a 4- to 5-week period — or even up to two months — is more likely based on the historical time frame of previous programs in 2001 and 2008 in which payments took longer than a month to be released.
This package provides both economic stimulus as well as a direct, immediate boost to household income, business cash flow, and the health care system on which every American depends.
Andrew Paparozzi serves as chief economist at Idealliance. He is the author of the recently completed Idealliance "State of the Industry Report, 14th Edition," which was sponsored by Canon U.S.A.