Second round of 'coronavirus' financial assistance: what options are being considered in Congress
The Trump administration previously stated that it did not intend to take additional measures to provide assistance, at least until July, writes Fox News. As the recent resurgence of coronavirus cases threatens to undermine US economic recovery after the worst recession since the Great Depression, all of this put additional pressure on Congress.
What the next bill on federal assistance will look like remains unclear, but some of the measures considered over the past month include another round of financial payments, additional assistance for businesses and the unemployed, an employment bonus and protection for employers.
The June Department of Labor Employment Report revealed that employers add record 4,8 million jobs last month, and the unemployment rate fell to 11,1%. This data can play a key role in what assistance will ultimately be adopted at the legislative level.
“The upbeat news can inspire policymakers who are reluctant to provide financial support to businesses and workers,” said Josh Wright, chief economist at iCIMS and a former Federal Reserve officer, on Thursday July 2.
White House officials supported the need for additional assistance after the publication of the report. About 48 million Americans lost their jobs as a result of the outbreak of coronavirus infection and the subsequent economic downturn, which has not happened since the Great Depression.
The Trump administration said it did not intend to take additional assistance measures, at least until July. The Senate does not plan to return from a two-week summer vacation until July 20, so it is unlikely that a fourth aid package will be accepted before this date.
Second round payout
Head of the Department of Finance Stephen Mnuchin and White House Economic Advisor Larry Kudlow said on July 2 that yet another direct money transfer is still on the agenda when discussing the next package of financial assistance.
“Direct payments are likely to be part of this as the president is concerned about what is happening right now,” Kudlow said.
In the last week of June, President Trump spoke out in support of the second round of aid, although it is unclear how much money the Americans can get and when it will happen.
“I support larger sums than the Democrats, but it has to be done right,” Trump said in a July 1 interview with Fox Business. - I want people to get more money so they can spend it. I want the money to arrive quickly and easily. "
The only proposal that has been passed by one of the houses of Congress is the HEROES Act, a massive $ 3 trillion aid package put forward by Democrats. Among other things, it includes a second one-time payment of $ 1200 for some Americans. However, in the Republican-controlled Senate, legislation has stalled.
Return to work bonus
Some Republicans are concerned that the additional unemployment benefits ($ 600 per week) do not actually encourage workers to return to their jobs. Benefits expire at the end of July.
Texas Rep. Kevin Brady, senior Republican on the Ways and Means Committee of the U.S. House of Representatives, initiated the bill. It proposed recipients of unemployment benefits who return to their jobs to pay one-time assistance in the amount of $ 1200 or two weekly payments of $ 600.
Another proposal from Senator Rob Portman of Ohio provides for a weekly benefit of $ 450 to laid-off Americans returning to work, in addition to their wages. In both cases, assistance packages will remain in effect until July 31, the same date that the additional unemployment benefit of $ 600 per week expires.
The idea of additional remuneration also received support among White House officials who spoke out in support of reforming unemployment benefits as part of the next aid package.
“We have to reward people for returning to work,” Kudlow said the other day. - There will be some kind of re-employment bonus. We are not going to continue paying $ 600. It interferes with work. "
Extended Unemployment Benefits
The additional $ 600 per week in unemployment benefits will officially end on July 31st, but in fact the states will only pay out the additional cash for the week ending July 25th or 26th. Without this, the benefit would return to the standard $ 378 per week - an income reduction of about 60%.
The House of Democrats wants to continue to pay an additional $ 600 a week after July. In the $ 3 trillion HEROES Act, they proposed extending payments of $ 600 at least until the end of January 2021. The bill, among other things, provided for the so-called soft restriction, which would allow additional people to receive money until March 2021.
On Wednesday July 1, Senate Democrats presented a proposal that would extend the weekly increase in aid. Initiated by Senate Minority Leader Chuck Schumer and Senator Ron Weeden, Oregon, the US Labor Rescue Act will extend benefits until the recipient's average unemployment rate falls below 11% in three months.
The amount of benefits will be reduced by $ 100 per percentage point below 11% until the unemployment rate drops below 6% in a particular state. The idea is to “gradually nullify” the need for help, Schumer wrote, and to avoid the so-called fiscal cliff (according to Wikipedia, this means a situation in which the United States can automatically enter into force a number of laws that increase taxes and reduce government spending in order to reduce the budget deficit and reduce public debt).
However, Republicans are unlikely to support extended unemployment benefits.
“Unemployment benefits are extremely important. And we need to make sure that for those unable to return to work, the benefit is adequate, McConnell told reporters. “It's not a question of whether we should pay people a bonus to keep them from returning to work. I think this was a mistake. And we hear across the country that it's actually harder to get people back to work. "
Kudlow said the administration is looking into tax holidays for workers - something Trump has been pushing for since the pandemic began - deductions for expenses like dining, entertainment and sightseeing, as well as liability protections for businesses.
“This is a massive package,” says Kudlow.
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