The House passed the largest stimulus bill in American history on Friday, a sweeping $2 trillion aid package that provides a boost to nearly all parts of the American economy, two days after the Senate green lighted the legislation in a unanimous 96-0 vote.
- The bill’s passage is a rare show of bipartisanship for the often gridlocked Congress, with both parties making key compromises that pushed the bill over the finish line.
- Democrats put aside their opposition to handing out tax cuts to big businesses while Republicans abandoned their disdain for big government, backing cash payments to most U.S. adults.
- The aid comes as the U.S. economy reels from the impact of the coronavirus, with more than 3 million Americans applying for unemployment last week, a new record.
- Key parts of the $2 trillion aid package include $377 billion in federally guaranteed loans to small businesses, a $500 billion government lending program, expanded unemployment payments, direct cash payments, and aid for hospitals.
- The bill will now head to President Trump’s desk, and he is expected to sign it soon.
Surprising fact: The cost of the stimulus bill is hundreds of billions of dollars more than Congress provides for the entire U.S. budget, not including social safety net programs, as the New York Times notes.
Around 40 percent of Americans don’t have enough money on hand to cover a $400 emergency expense, according to figures reported by the Federal Reserve in 2018.
Tangent: Social distancing in Congress. There was a considerable amount of back and forth about how to vote on this bill. With the House out of town this week on recess, many members were hesitant to bring everyone back to Washington for a vote. Two congressmen have tested positive for COVID-19 and lawmakers worry bringing everyone together for a vote could cause the virus to spread in the halls of Capitol Hill. Party leaders had hoped to pass the bill by voice vote, a measure that does not require the full House to be present for a vote. But that option was nearly derailed Friday when Rep. Thomas Massie, R-Ky., refused to support the measure, forcing lawmakers to make a mad dash to Washington from their districts for a possible full vote Friday.
President Trump directed his ire at the Kentucky congressman on Friday morning, tweeting:
Ultimately, Massie failed to get a sufficient “second” on the matter, and the House was able to pass the bill via voice vote, as Speaker Nancy Pelosi, D-Calif. had planned.
(One option for getting this bill passed that was off the table was remote voting, a measure that may seem like a common-sense but is not that simple.)
Key background: The coronavirus has caused unprecedented disruption to the U.S. economy. Along with record job loss, businesses all across the country have been forced to shut their doors, and travel has all but stopped. Earlier this week, the Wall Street Journal reported airlines were considering shutting down domestic flights completely because of decreased demand (The stimulus bill will prop up the airline industry with $60 billion in aid, including $25 billion in grants to pay employees.)
Crucial quote: “We went to bed as America and woke up the next morning looking like social democratic Europe,” Erik Gordon, professor at the Ross School of Business at the University of Michigan, said to the New York Times about the stimulus bill Thursday. “We’ve made fun of Europe propping up their failing steel companies and car companies, and when push comes to shove we’re going to outdo them.”
Chief critic: Rep. Alexandria Ocasio-Cortez, D-N.Y., said Friday the stimulus bill has a “lot of problems with it.”
Big number: $1,200. Under the bill, American adults would receive a one-time direct deposit payment of $1,200 each, and $500 per child (couples would receive $2,400). The payments would begin to reduce for individuals making over $75,000 (the reduction begins at $112,500 for heads of household and $150,000 for married couples) at a rate of $5 for every $100 in additional income and cuts out completely for individuals making over $99,000 (it phases out at $146,500 for head of household filers with one child, and at $198,000 for couples with no children.)
Another big number? $600. The bill also includes a $600 weekly across-the-board increase on top of what individual states pay for unemployment benefits. The boost to unemployment benefits program will last four months.
What to watch for: Whether additional checks will follow. Senate Democrats Cory Booker, D-N.J., Michael Bennet, D-Colo., and Sherrod Brown, D-Ohio, support sending additional checks depending on changes to the unemployment rate. Treasury Secretary Steve Mnuchin wanted to send Americans two checks but received backlash from GOP senate leadership and abandoned the idea. The Trump administration is hoping to get the checks passed under this bill out within two weeks. However, it could take longer. In 2008, when Congress also sent money to Americans, it took two months for the checks to arrive. CNN reports it will “likely” take until May before checks are sent out.
Further reading: Read expert analysis on all parts of the stimulus bill by Forbes’ contributors:
Senior Tax Contributor Kelly Phillips answers all the questions you have about the stimulus checks but were afraid to ask.
Here’s what the bill does, and doesn’t do for student loan borrowers, according to senior personal finance contributor Adam Minsky.
Senior Tax Contributor Tony Nitti analyzes all the tax aspects of the legislation.