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.

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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 optimistic news could encourage policymakers who are reluctant to provide financial support to businesses and workers,” Josh Wright, chief economist at iCIMS and a former Federal Reserve official, said Thursday.

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 will likely be part of this because the president is concerned about what's going on 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 amounts than the Democrats, but it has to be done right,” Trump said during a July 1 interview with Fox Business. “I want people to have more money so they can spend it.” I want the money to arrive quickly and easily.”

The only proposal that has passed either chamber of Congress is the HEROES Act, the massive $3 trillion relief package put forward by Democrats. Among other things, it includes a second one-time payment of $1200 for some Americans. However, the legislation has stalled in the Republican-controlled Senate.

On the subject: 'Very generous' and soon: Trump spoke about the second wave of help in connection with the coronavirus

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 need to reward people for going back to work,” Kudlow said recently. — There will be some kind of bonus for re-employment. We are not going to continue paying $600. This makes it difficult to work."

On the subject: Unemployment benefits and coronavirus financial assistance: how they are taxed

Extended Unemployment Benefits

The extra $600 per week in unemployment benefits will officially end on July 31, but essentially states will only pay out the extra money for the week ending July 25 or 26. Without it, benefits would revert to the standard $378 per week—a roughly 60% reduction in income.

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 introduced a proposal that would extend the weekly aid increase. Sponsored by Senate Minority Leader Chuck Schumer and Sen. Ron Wyden, D-Ore., the American Workforce Rescue Act would extend benefits until the recipient's three-month average unemployment rate falls below 11%.

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 who can't return to work, the benefits are adequate,” McConnell told reporters. “This is not a question of whether we should pay people a bonus not to return to work. I think this was a mistake. And we're hearing across the country that it's actually harder to get people back to work."

Employer protection

Kudlow said the administration is exploring a tax break for workers - something Trump has pushed for since the start of the pandemic - deductions for expenses such as restaurants, entertainment and excursions, as well as liability protections for businesses.

“This is a massive package,” Kudlow said.

Read also on ForumDaily:

Submission of declarations, retirement accounts and deductions: key tax changes caused by the COVID-19 pandemic

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