UPDATE, POSTED 1 A.M. TUESDAY
Washington (CNN)- Congress voted Monday evening to approve a far-reaching $900 billion Covid relief package that promises to accelerate vaccine distribution and deliver much-needed aid to small businesses hit hard by the pandemic, Americans who have lost their jobs during the economic upheaval and health care workers on the front lines of the crisis.
Update: Monday evening, December 21, 2020:
WASHINGTON (AP/WTVQ) – The House has easily passed a $900 billion pandemic relief package.
It would deliver long-sought cash to businesses and individuals and resources to vaccinate a nation confronting a frightening surge in COVID-19 cases and deaths.
Lawmakers have also tacked on a $1.4 trillion catchall spending bill and thousands of pages of other end-of-session business to create a massive bundle of bipartisan legislation.
Republican Congressman Andy Barr, of Lexington, released the following statement after voting in support of legislation to fully fund the government for fiscal year 2021 and provide much needed and long delayed COVID-19 relief:
“Tonight, I voted in support of critical COVID-19 relief for small businesses, families and workers throughout the United States. For months, I have led calls in Congress to deliver more resources to the American people to defeat the COVID-19 virus and relief from government-imposed lockdowns of the economy,” Barr said.
“Building on the success of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and Operation Warp Speed, this package makes important investments in COVID-19 vaccine distribution, delivers another round of job-saving forgivable loans to small businesses and provides much needed assistance to families, schools and healthcare providers,” said Barr.
“Ultimately, no amount of government spending can substitute for a fully functioning economy free of lockdowns. However, I am confident this relief package will help bridge the gap until COVID-19 vaccines are widely distributed,” Barr said.
Barr added that the package includes what he calls a desperately needed second round of Paycheck Protection Program (PPP) funds for distressed small businesses, including enhanced loans for restaurants, hotels, hospitality and travel-related businesses, which have experienced severe revenue reductions. It also extends PPP loan eligibility to 501(c)6 organizations like chambers of commerce and destination marketing organizations such as VisitLex, which also have been hard hit by the pandemic, but were not eligible for the first round of PPP loans under the CARES Act.
Barr noted the legislation does not contain liability protections for businesses, universities and schools.
According to Congressman Barr, here are other highlights of the relief bill:
- $284 billion in additional funds for the PPP. The PPP provided over $5.2 billion in forgivable loans to small businesses in the Commonwealth of Kentucky since its rollout in April.
- Simplified one-page forgiveness application process for PPP recipients who received loans of $150,000 or less in value. Congressman Barr led multiple efforts in the House to secure streamlined forgiveness for small businesses, including organizing a bipartisan group of nearly 100 Members to push for this fix and co-sponsoring bills to streamline the process.
- Extends for one year the relief provided to lenders from requirements under generally accepted accounting principles (GAAP) for Troubled Debt Restructuring (TDR) classifications on loans. Congressman Barr actively advocated for the extension of TDR relief, noting its importance for retail and commercial borrowers. He discussed this issue directly with Federal Reserve Chairman Jay Powell earlier this month and played a key role in the provision’s original incorporation in the CARES Act.
- Provides hotels, restaurants and other hospitality businesses the ability to apply for a PPP loan that is 3.5x monthly payroll as opposed to 2.5x for other applicants. Congressman Barr advocated for the hard-hit hospitality industry and its employees. Congressman Barr co-authored a bill (H.R. 7809) to create a federal assistance facility for struggling commercial real estate, including hotels, restaurants and retail (that bill has over 70 bipartisan co-sponsors). Lastly, Congressman Barr organized a letter to the U.S. Department of Treasury Secretary and the Federal Reserve Chairman requesting assistance for the hospitality industry via their existing authority.
- Making permanent the Craft Beverage Modernization Act, legislation that includes Congressman Barr’s Aged Distilled Spirits Act, which creates a level playing field for bourbon distillers, allowing them to deduct interest expenses associated with production in the year it is paid, not when the bourbon is bottled and sold. This provision will allow those in the Sixth District producing America’s only official native spirit to better invest in their products, their workers, job creation, and the overall success of the Kentucky bourbon industry.
- Over $13 billion to support our farmers and agricultural sector. This includes enhancements in assistance under the Coronavirus Food Assistance Program (CFAP) to support specialty crops and livestock producers as well as additional much needed support for our cattle producers. Congressman Barr advocated through letters to U.S. Department of Agriculture Secretary Sonny Perdue on behalf of cattle and hemp farmers.
- $20 billion for U.S. Small Business Administration’s Economic Injury Disaster Loan (EIDL) program. As of November 23, Kentucky small businesses received over $1.2 billion in EIDL loans.
- $48 billion for vaccine distribution in schools, small businesses and healthcare providers so we can continue safely reopening America, including $20 billion specifically for the purchase of vaccines that will make the vaccine available at no charge for anyone who needs it.
- $7 billion for rural broadband initiatives, including $300 million to construct rural broadband connectivity. Congressman Barr introduced legislation in September to enable local governments to repurpose CARES Act money for rural broadband development.
- $250 million to expand telehealth services. Working with Lexington epidemiologists and hospitals, Congressman Barr led the effort last spring to persuade the Center for Medicaid and Medicare Services to expand coverage of telehealth services to include same-location services.
Other key items included in the legislation are:
- Second round of EIPs, $600 for eligible individuals and their dependents.
- Enhanced unemployment benefits of $300 per week.
- $45 billion for transportation, including $10 billion for highways and $16 billion for another round of airline employee and contractor payroll support.
- $82 billion in funding for schools and universities to assist with reopening for in-person learning that also includes $2.75 billion in designated funds for private K through 12 education.
Democratic Congressman John Yarmuth, of Louisville, released the following statement regarding House passage of H.R. 133, the Omnibus Appropriations and Emergency Coronavirus Relief package:
“For so many Kentuckians and tens of millions of Americans, this compromise relief bill is woefully insufficient. For months, my Democratic colleagues and I have fought to get as much as we could from Mitch McConnell’s Senate majority, and as families suffered, all they could ask is what was in it for them. Unfortunately, at this point, this is the most we could get for families in need.
“We got some direct payments for those in need and were able to extend critical emergency unemployment benefits and rental assistance for Americans who’ve lost their income through no fault of their own — though this isn’t nearly enough. This package provides new money for schools, hospitals and vaccine distribution, and will make badly needed investments in government operations, small and mid-sized businesses, and industries that were ravaged first by the pandemic and then by the failed federal response. We also withstood Republican demands to shield corporations from total legal liability when they harm or kill their workers, as well as efforts to hamper President-elect Biden’s ability to help those in need next year.
“I am glad that we were able to pass something to help the American people today, but as governments around the world rise to meet the needs of their struggling citizens, I am frustrated and angry that the richest country in the world is hamstrung by a Senate majority content to let the American people suffer.”
The Senate is expected to vote Monday night and send the legislation to President Donald Trump for his signature.
Original story below from Monday, December 21, 2020:
WASHINGTON (AP) — The $900 billion economic relief package that emerged from Congress over the weekend will deliver vital aid to millions of households and businesses that have struggled for months to survive.
Yet with the economy still in the grip of a pandemic that has increasingly tightened curbs on business activity, more federal help will likely be needed soon.
And it’s unclear whether or when the government might provide it.
For now, the package that congressional leaders agreed to Sunday will provide urgently needed benefits to the unemployed, loans to help small businesses stay open and up to $600 in cash payments to most individuals. It will also help families facing evictions remain in their homes. The measure includes no budgetary help, though, for states and localities that are being forced to turn to layoffs and service cuts as their tax revenue dries up — a potential long-run drag on the economy.
It also includes a variety of provisions on everything from craft distillers and brewers to eviction assistance. And not suprisingly, it’s drawing all kinds of reactions.
Months from now, economists say, the widespread distribution and use of vaccines could potentially unleash a robust economic rebound as the virus is quashed, businesses reopen, hiring picks up and consumers spend freely again.
Until then, the limited aid Congress has agreed to won’t likely be sufficient to stave off hardships for many households and small companies, especially if lawmakers balk at enacting further aid early next year.
And a widening financial gap between the affluent and disadvantaged households will likely worsen.
“Some aid is better than no aid,” said Gregory Daco, chief U.S. economist at Oxford Economics. “It’s positive. But it’s likely going to be insufficient to bridge the gap from today until late spring or early summer, when the health situation fully improves.”
President-elect Joe Biden has said he will seek another relief package soon after his inauguration next month, setting up another political brawl, given that some Senate Republicans have said that with vaccines on the way, they think further government aid may be unnecessary.
Meanwhile, the comments poured in.
“On behalf of the hotel industry, we applaud the House and Senate leadership, along with the Administration, for reaching a bipartisan compromise on this COVID economic relief package. This short-term relief package is a vital step toward helping the hotel industry survive this crisis. The proposed measure provides temporary relief over the next few months and will help thousands of hotels stay open and retain employees,” said Chip Rogers, president and CEO of the American Hotel & Lodging Association.
“For months, the hotel industry has been imploring lawmakers to help the people and industries that have been most affected by this crisis. After more than 250,000 individual grassroots actions taken by AHLA members, we are pleased to finally see a long-overdue agreement.
“The legislation contains many of the provisions AHLA has advocated for, including a second round of Paycheck Protection Program loans, increasing the size of PPP loans to 3.5 times payroll, and making PPP loan expenses tax-deductible. This will provide a critical lifeline for hotels and other businesses that have been decimated by the pandemic. Other hotel industry priorities include a one-year extension for Troubled Debt Restructuring (TDR) relief so that banks can continue working with borrowers to gain additional forbearance and debt relief, business meal deductibility through 2022, and expanded Employee Retention Tax Credit,” Rogers continued. “We look forward to working with Congress and the new Administration on a longer-term stimulus package that will ensure our industry survives and is well positioned to help the country recover economically once the public health threat subsides.”
Kentucky Democrat Congressman John Yarmuth, co-chair and founder of the Congressional Bourbon Caucus, praised inclusion of the Craft Beverage Modernization and Tax Reform Act in the year-end omnibus spending bill. The measure, cosponsored by Yarmuth, will make permanent the excise tax relief for distilled spirits producers, craft brewers, and winemakers.
“This is a major victory for American jobs and the entire distilled spirits and craft beverage industries. As Founder of the Congressional Bourbon Caucus, I’ve fought for the inclusion of this provision that will significantly benefit America’s native spirit and the lives and livelihoods that depend on its production, distribution, and consumption. To finally provide certainty on what would have been a costly tax burden will allow producers to invest in their businesses, invest in their workers, and continue to produce some of the most celebrated spirits around the world. We can all say cheers to that,” Yarmuth stated.
The construction industry also chimed in, noting the measure’s funding for infrastructure projects and clarification that PPP loans may not be taxed will help offset some of the challenges facing the industry.
Offset Some of the Challenges Facing the Construction Industry
“The new coronavirus recovery measure announced today should provide some needed relief for a construction industry that is coping with project cancellations and job losses in most parts of the country. Most notably, the measure includes $10 billion in needed funding to help address the pandemic-induced shortfalls in state transportation revenues. This new funding should keep a number of road projects from getting canceled or delayed over the coming months. The measure also includes new funding for waterways, ports and other maritime facilities,” said Associated General Contractors of America’s chief executive officer Stephen E. Sandherr.
“Most important, the measure reaffirms the original Congressional intent that employers that used Paycheck Protection Program loans to save jobs will not be forced to pay more taxes next year as a result. Given that demand for many types of commercial construction projects is likely to remain soft in 2021, the administration’s plan to tax firms for their forgiven loan amount would have cost many construction jobs. Instead, the new recovery measure will preserve many of the original benefits of the Paycheck Protection Program, something our association has worked aggressively to ensure,” Sandherr added.
But some groups aren’t happy, including nursing homes.
The American Health Care Association and National Center for Assisted Living (AHCA/NCAL), representing more than 14,000 nursing homes and assisted living communities across the country that provide care to approximately five million people each year, released the following statement in response to the pending COVID relief package.
“While we appreciate the difficulty in reaching a bipartisan compromise, we are disappointed that Congress could not strike a deal that recognizes the dire situation our long term care residents and staff are facing right now. Due to soaring community spread, nursing homes are experiencing a record-breaking number of cases and deaths—worse than the spring. Even with a vaccine on its way, it will likely take months to fully vaccinate our residents and staff, as well as the remaining public. Facilities will not be able to return to normal for some time, meaning providers need ongoing support with PPE, testing and staffing,” said Mark Parkinson, president and CEO of AHCA/NCAL, a national group representing nursing homes/
“Meanwhile, nearly two-thirds of long term care facilities are operating at a loss, and the additional funds slated for the Provider Relief Fund for all heath care providers in this legislation are minimal. Hundreds of facilities are in danger of closing their doors permanently and uprooting the frail seniors they care for. Congress must do more in the new year by directing specific aid to long term care. We owe it to our nation’s seniors and our health care heroes,” Parkinson added.
The new rescue support offers less aid than Democrats had pushed for and much less than was provided in a multi-trillion dollar package for households and businesses that the government enacted in March. A new supplemental federal jobless benefit, for example, was set at $300 a week — half the amount provided in March — and will expire in 11 weeks. An extension of a benefits program for jobless people who have exhausted their regular state benefits and for self-employed and gig workers will also be extended until mid-March, well before the economy is likely to have fully recovered.
“It’s not as if in March there’s suddenly going to be a light switch that’s turned on and we’re back in pre-COVID mode,” Daco said.
Still, the new aid package may be enough, for now, to prevent another recession. S&P Global estimates that the money should help boost the U.S. economy back to its pre-pandemic level by the July-September quarter of next year — seven months or so from now. Without any support, that level wouldn’t have been reached until 2022, S&P estimates.
The economy has been enduring a renewed slump as the resurgent virus has intensified pressure on businesses and consumers have stopped shopping, traveling, dining out and attending sports and entertainment events. Key measures of the economy — retail sales, applications for jobless aid, travel spending — have steadily weakened.
More than 9 million Americans had faced a total cutoff of their unemployment benefits if Congress hadn’t agreed to the new package after months of stalemate. More than 4 million have already used all the unemployment aid available to them, which lasts 26 weeks in most states; they will be able to reapply.
They include Warren Calvert, who ran out of unemployment benefits about two months ago, and is several months behind on his electric bill. In the spring, Calvert lost what he considered the best job he ever had: A $15-an-hour concession cook at the Fiserv Forum arena in Milwaukee, where the NBA’s Bucks play.
Now, Calvert and his girlfriend, who also lost a serving job at Fiserv, are trying to manage by selling homemade eggrolls around their neighborhood. To try to stay on top of his rent, he sells the eggrolls — original fusion concoctions like chili or cheese steak — at all hours of the day and night. With little money left over for other food, they mostly eat egg rolls themselves.
“It’s really still hard — I’m still struggling day by day,” Calvert, 38, said. “Ain’t nobody feeling Christmas-y right now. Who’s buying presents? I’m going to put up some lights, and that’s it.”
Calvert said he will apply for the new unemployment benefits while he continues searching for work. But he fears it won’t be enough to prevent him from losing his apartment.
“I’m really worried,” he said. “I’m still going to be short. I feel like Congress is playing with our lives.”
The much larger rescue package the government enacted in March was widely credited with averting a disaster. Be injecting money quickly into the pockets of individual Americans, it served to reduce poverty. But as much of that aid expired over the summer, poverty grew. Many people ran through the $1,200 direct payment checks that had been distributed in April and May. And a supplemental $600 in jobless benefits expired over the summer.
According to research by Bruce Meyer at the University of Chicago and two colleagues, the U.S. poverty rate jumped from 9.3% in June to 11.7% in November — an increase of nearly 8 million people.
The new relief package restores the Paycheck Protection Program, which offers forgivable loans to many businesses. But many small businesses complain that the program in the past was too restrictive, requiring them to use most of the money on payroll and not enough for other expenses like rent, the cost of personal protective equipment or other supplies.
According to the data firm Womply, about one in five small businesses have closed since early spring. More than half of small businesses have just two months’ cash on hand or less, and one in six has two weeks or less of cash, according to a survey by the Census Bureau.
Most economists say that further aid for small businesses should focus mainly on keeping them alive rather than maintaining payrolls. If a business shuts down, they note, it can’t re-hire once the pandemic is under control.
Sasha Coleman, one of three worker-owners of a co-op restaurant near Boston named Tanam, said they are barely surviving. They’re relying on takeout food and cocktails that are generating less than one-fifth of pre-pandemic revenue.
The restaurant, which closed from March to September, received a loan from the PPP program. But like many small companies, Coleman and her co-worker-owners would prefer something that lasts longer and is more flexible. The PPP required most of the loan money to be spent on payroll for just eight weeks. They need to pay rent, maintain their health insurance and help offset the expenses they absorbed for adapting to takeout and outdoor dining, like buying patio furniture and outdoor heaters.
“It’s just been very frustrating because there is this expectation to stay open and put on a good face for the customers, without much help from the government,” said Kyisha Davenport, another worker-owner.
Democrats had wanted the new economic relief package to include about $160 billion in aid for state and local governments. But Senate Republicans opposed it. States and cities have already cut about 1.3 million jobs since the pandemic began, contributing to a higher unemployment rate.
“It’s not stimulus — it’s a survival plan,” Michael Graetz, a Columbia University law professor who studies tax and social policies, said of the new relief package. “Will it allow people to survive for a little longer than they would have otherwise, given what was about to happen at the end of the year? The answer is yes. Not doing it would have been malpractice.’’
But Graetz, a former Treasury Department official, said “it’s not enough when you think about the fact that evictions are rising. People can’t pay their rent. Unemployment has been creeping back up. Businesses have been shuttered again all over the country. So this is not the end of the story.”
Congressional leaders have hashed out a massive, year-end catchall bill that combines $900 billion in COVID-19 aid with a $1.4 trillion omnibus spending bill and reams of other unfinished legislation on taxes, energy, education and health care. The huge, still-unreleased bill is slated for votes on Monday — with lawmakers having only a few hours to read it before casting their votes.
Highlights of the measure with overall funding amounts and specific amounts for some but not necessarily all initiatives; some amounts are not yet available and some aspects of the catchall bill do not involve spending.
Unemployment insurance ($120 billion). Revives supplemental federal pandemic unemployment benefits but at $300 per week — through March 14 — instead of the $600 per week benefit that expired in July. Extends special pandemic benefits for “gig” workers and extends the maximum period for state-paid jobless benefits to 50 weeks.
Direct payments ($166 billion). Provides $600 direct payments to individuals making up to $75,000 per year and couples making $150,000 per year — with payments phased out for higher incomes —- with $600 additional payments per dependent child.
SMALL BUSINESS ($325 billion)
Paycheck Protection Program ($284 billion). Revives the Paycheck Protection Program, which provides forgivable loans to qualified businesses. Especially hard-hit businesses that received PPP grants would be eligible for a second round. Ensures that PPP subsidies are not taxed.
VACCINE, TESTING, HEALTH CARE PROVIDERS ($69 billion)
Delivers more than $30 billion for procurement of vaccines and treatments, distribution funds for states, and a strategic stockpile. Adds $22 billion for testing, tracing and mitigation, $9 billion for health care providers, and $4.5 billion for mental health.
SCHOOLS ($82 billion)
Delivers $54 billion to public K-12 schools affected by the pandemic and $23 billion for colleges and universities; $4 billion would be awarded to a Governors Emergency Education Relief Fund; nearly $1 billion for Native American schools.
RENTAL ASSISTANCE ($25 billion)
Provides money for a first-ever federal rental assistance program; funds to be distributed by state and local governments to help people who have fallen behind on their rent and may be facing eviction.
FOOD/FARM AID ($26 billion)
CHILD CARE ($10 billion)
Provides $10 billion to the Child Care Development Block Grant to help families with child care costs and help providers cover increased operating costs.
POSTAL SERVICE ($10 billion)
Forgives a $10 billion loan to the Postal Service provided in earlier relief legislation.
SURPRISE MEDICAL BILLS
Contains bipartisan legislation to protect consumers from huge surprise medical bills after receiving treatment from out-of-network providers.
Extends a variety of expiring tax breaks, including lower excise taxes of crafter brewers and distillers. Renewable energy sources would see tax breaks extended, as would motorsport facilities, and people making charitable contributions. Business meals would be 100% deductible through 2022.
Includes an almost 400-page water resources bill that targets $10 billion for 46 Army Corps of Engineers flood control, environmental and coastal protection projects.