Trump signs off on sweeping spending bill to provide taxpayers with financial relief, businesses with a special lending program
On the same day that the House approved the plan, President Donald Trump signed into law the $2.2 trillion relief plan, the largest economic stimulus package in modern American history, to help address the ramifications of the coronavirus.
The highly anticipated bill will direct financial aid to taxpayers and provide benefits for unemployed individuals. Additionally, states will also receive funding to be allocated to pandemic relief.
“I want to thank Democrats and Republicans for coming together and putting America first,” Trump said on Friday, March 27 as he signed the bipartisan bill in the Oval Office surrounded by Republican lawmakers.
Previously, Trump has undermined the impact of the novel coronavirus of which the United States now leads in confirmed cases, according to the John Hopkins Coronavirus Resource Center. But since declaring a national emergency over the pandemic earlier this month, Trump has prioritized averting massive economic fallout.
“I think we are going to have a tremendous rebound,” the president said.
Though the administration has emphasized the bill’s promise to “economic recovery” for everyday Americans, the bill also includes a sizable bailout fund for businesses who have taken a beating from the crisis.
Most adults will receive a one-time payment of $1,200
One of the most talked-about mandates of the massive spending bill is the promise of $1,200 directed to most American adults ($2,400 for married couples) who earn up to $75,000 a year ($150,000 for married couples) with an additional $500 for each child.
Similar to a universal basic income (UBI) measure, the one-time payment was meant to provide Americans with a safety net as safer-at-home orders and other isolation mandates are enacted in cities and states across the country. But what may be missed in the fine print is that to be eligible for these payments, you must be a Social Security recipient or someone who has filed federal tax returns in recent years.
This means that roughly seven million low-income households wouldn’t be eligible for the cash payment.
The bipartisanship of the bill meant that it went through different iterations before being finalized this week, with the original Republican-led bill to direct less money to lower-income Americans.
According to Treasury Secretary Steve Mnuchin, people should expect to receive their payments within three weeks.
But the bill still leaves out many Americans.
According to the bill, those who are able to work from home are not covered in the bill. Additionally, those receiving paid sick leave or benefits from a paid family leave program are not eligible.
Student loan payments to be suspended
The federal government previously waived two months of payments and interest for many federal student loan borrowers, and this bill extends that moratorium.
Until Sept. 30, 2020, payments will be suspended for any loan held by the federal government. Direct loans made within the past 10 years are eligible as 90% of loans are eligible for the suspension, according to the Institute for College Access and Success.
Moreover, the bill indicates that interest “shall not accrue” during the six-month suspension period.
Loan borrowers are advised to review their online accounts to see if the loan servicer has reset the billing system to represent no payment due.
Unemployment benefits expand to include more Americans
Just before the lockdowns began, 282,000 people filed for unemployment.
As of Thursday, March 19, that number climbed to 3 million, according to new data from the U.S. Department of Labor.
The new spending bill addresses this uptick of unemployed Americans — many of whom were laid off for coronavirus-related reasons — and expands unemployment benefits to workers who are usually not eligible.
Those workers include all self-employed people, including gig workers, freelancers, independent contractors as well as part-time workers.
These benefits will be used to replace the average worker’s paycheck. Unemployment often compensates for 40% to 45% of that paycheck, but the expansion of benefits will attempt to close that gap and provide 100% of lost wages.
The exact amount of unemployment welfare depends on the state, but the average person who is eligible for unemployment under this plan will receive an extra $600 of federal pandemic relief per week for up to four months.
Businesses get a boost through $500 billion lending program
As a way to help businesses who have been and will be affected by coronavirus-related orders, $500 billion has been allocated toward a lending program for struggling businesses.
The measure offers $377 billion in federally guaranteed loans to small businesses. While the measure provides aid to struggling industries like airlines, the cruise industry and the oil industry are not included in eligible businesses.
The bill also calls for an inspector general and an accountability committee to oversee the spending, but given that the administration gets to choose the overseers, those who opposed the 2008 bank bailout worry that any misuse of funds may slip through the cracks.
Notably, the bill also provides $100 billion to hospitals who are overcrowded with COVID-19 cases.
Credit damage aversion and relief for renters
Those who may be worried that the expanded benefits will hurt their credit report should not be worried. The sweeping bill states that from Jan. 31, 2020 to 120 days after the national emergency declaration is moot, lenders and other creditors are ordered to mark credit files as current.
Any irregularities or marks on file that appeared before the outbreak will remain unless fixed during the national emergency period.
The bill also puts a temporary, nationwide moratorium on evictions for renters whose landlords have mortgages associated with Fannie Mae, Freddie Mac and other federal-sanctioned entities.
The moratorium will be in effect for 120 days after the bill’s passing and landlords are prohibited from charging fees or penalties due to nonpayment of rent.