This Thursday, the Democratic section of the House of Representatives voted in favor of a revised Heroes Act stimulus package- quite similar to how it voted for the Heroes Act back in May. The question stands- what does this stimulus bill entail for the economy?
The initial thing that one should know about the Heroes Act is that it is not a law. Nevertheless, it does point in the direction of the negotiations for the stimulus package. These negotiations are still going on, and despite Donald Trump contracting COVID and the Presidential votes- the negotiations will continue.
What is the revised Heroes Act?
Under the legislation of the new economic relief for coronavirus, many are bereft of the original Heroes Act. This involves a second stimulus package that would be for $1200 to Americans who are eligible- along with an unemployment enhancement of $600.
On the other hand, it does reduce allocations that had been proposed previously- like the paycheck protection program and the employee tax credit.
Most of the economic analysts have been seeing this vote as something hugely symbolic- but one which doesn’t have much of a chance of actually becoming a law. Yet, both Nancy Pelosi- the House Speaker, and Steve Mnuchin- the Treasury Secretary have been having talks for a possible compromise that could sweeten the deal.
As it stands, the Oval Office is already hinting at a $1.6 trillion stimulus package which it proposed in its latest ‘skinny’ bill- something the Senate Republicans didn’t like. This could imply that the $2.2 trillion plan of the House might also have bipartisan problems.
If nothing hasn’t happened yet, it doesn’t mean all is lost. In fact, the very proposal from this House seems to be a step closer to a compromise while the window narrows for a stimulus package. On October 9th, Congress would go on a recess, so legislators will have just a couple of weeks to create an agreement before the Presidential Elections get underway on the 3rd of November.
Legislators and negotiators have to come to a balance as to what the final package cost would be, and also wonder where that aid will be shifted towards. If you are really wondering about the aspects of this proposal, here are a few entries that might help you understand the Heroes Act even better.
Features of the Heroes Act and the Stimulus Package
1. The total cost of the stimulus package has amounted to $2.2 trillion dollars. This is somewhat less than the Heroes Act which was passed on May 15.
2. The maximum amount of payment that this stimulus package guarantees is $1200 for single filers, $2400 to couples, while $5 was reduced from every $100 for the families that were above the income limits.
3. For dependents, you get quite a large sum of stimulus packages- around $500 for every dependent for everyone. This is quite different from the previous Heroes Act, which had a sum of $1200 allotted to three dependents. It is also different from the CARES Act which pays $500 to every dependent who is 16 and below.
4. The enhanced benefit for unemployment is around $600 every week- which would be added to state benefits. This is different from the Heals Act, which promised a sum of $200 that would be uplifted to $500 to match up to 70% of the wages lost by the unemployed.
5. The enhanced employment benefit would last up to Jan 31, 2021. This will be accompanied by a period of transition which will be extended up to 31 March 2021. This transition money would be allocating around $925 million to the state to help them process claims.
6. The Paycheck Protection program will allocate over $30 billion that too, in addition. It would also allow a secondary loan to minuscule businesses which have employees numbering less than 200, with a reduction of 25% in their quarterly revenue. It would also exclude most of the firms which are publicly traded from being eligible for smaller loans. The Paycheck protection program would put a limit on several businesses that have more than one physical location. Under the CARES Act, this program allocated around $659 billion in forgivable loans for tiny businesses. It had a clause- all these businesses had to use 75% of their payroll to be eligible for this.
7. The tax credit for Employees under the Heroes Act would simply enhance the tax credit which the CARES Act already established. Under the CARES Act, there would be a tax credit on 50% which would be up to $10,000.
8. The Heroes Act doesn’t talk about the bonus for employees that would be starting a new job. The CARES Act too doesn’t talk about it.
9. Under the Heroes Act, around $60 billion has been allocated for housing services, and rent relief. This is quite different from the CARES Act which banned late fees till the 25th of July, and evictions well into August. This was to be strictly followed on properties that had been backed by programs of a federal montage nature.
10. Related to school reopenings, the Heroes Act allocates around $182 billion for K-12. For higher education, a sum of $39 billion is going to be allocated, and $57 billion would be provided to healthcare.
If all goes to plan, the Heroes Act might actually bring out a fool-proof stimulus package that will save this economy from further recession till things cool down.