What’s in Next and Final 2020 COVID Stimulus Package Including the $600 Unemployment Extension and Second Stimulus Check

As the pandemic and COVID outbreaks spread across the country there is increasing pressure on lawmakers to pass an additional stimulus relief package before the end of 2020. While there have been a few proposals (e.g. HEROEs act) that have passed one chamber of Congress, bipartisan support has been non-existent. However House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer have recently backed a $908 billion bipartisan stimulus plan that was put forward by a group of Senators. However, Senate Leader Mitch McConnell and House Majority Leader Steny Hoyer have not indicated support for this, but have signaled they could include some aid provisions in a spending bill Congress needs to pass by Dec. 11 to keep the government funded.

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[October 2020 update] Democrats and Republicans have now both released their respective proposals for the next stimulus package (the 5th one!) and while some items are aligned, there are a few (especially unemployment) that the parties are still far apart on. The table below shows the differences between the HEALS act (Republican proposal) and HEROES act (Democrat passed bill in the House)

Key Stimulus Items	Heroes Act (Democrat)	HEALS Act (Republicans)	Likely Compromise in Final Bill
Total cost of stimulus package	$3 trillion	$1 trillion
Stimulus check maximum payment amount	$1,200 to single filers earning under $75k per year, $2,400 for joint filers under $125k. Reduced $5 per $100 of income above limits.	Same	$1,200 to single filers earning under $75k per year, $2,400 for joint filers under $125k. Reduced $5 per $100 of income above limits.
How much stimulus money you get for dependents	$1,200 for dependents, maximum of three.	$500 for all dependents, no age limit.	$500 for all dependents and raise age limit to 24
Enhanced unemployment benefit	$600 per week in addition to state benefits.	Initially $200 per week. Then up to $500 per week to match 70% of lost wages when added to state benefits.	$300 p/week on top of state benefits
How long enhanced unemployment lasts	January 2021 for most workers, through March 2021 for gig workers, independent contractors, part-time workers and self-employed.	$200 per week bonus through September. Then 70% matching of lost wages. Extends expiration of federal benefits until Dec. 31.	Extension to the end of January 2021 for all workers
Paycheck Protection Program	Expands eligibility, eliminates 75% payroll requirement and extends application period to Dec. 31.	Injects another $190 billion into the PPP fund, expands eligibility and allows businesses to request a second loan. Eliminates 75% payroll requirement and expands approved uses of funds for loan forgiveness.	Injects another $200 billion into the PPP fund, expands eligibility and allows businesses to request a second loan. Eliminates 75% payroll requirement and expands approved uses of funds for loan forgiveness.
Bonus for employees who start new jobs or are rehired	Does not address.	There could be a return-to-work bonus of up to $450 per week for unemployed workers who secure a new job or are rehired.	This likely won't be passed with reduced supplementary benefits being compromised upon
Eviction protections and moratorium	Expands to cover nearly all rental properties in the US, extends eviction moratorium an additional 12 months, allocates $200 billion for housing programs and another $100 billion for rental assistance.	Does not address.	Expands to cover nearly all rental properties in the US, extends eviction moratorium an additional 6 months, allocates $200 billion for housing programs and rental assistance.
School reopening	$58 billion for grades K-12, $42 billion for higher education.	$70 billion to K-12 that open for in-person classes, $29 billion for higher education, $1 billion to Bureau of Indian Education, $5 billion state discretion.	$60 billion to K-12 and Colleges that open for in-person classes - with strict adherence to CDC rules for qualification. Will likely be linked to state COVID infection rates
Liability protection from coronavirus illness	Does not address.	5 year liability shield to prevent schools, businesses, hospitals, from being sued over coronavirus related issues.	Limited Liability (up to 2 years) assuming all CDC guidelines are followed
Coronavirus Testing	Does not address.	$16 billion.	$4 billion for additional testing

Sources: CNET, HEALS Act, HEROES act.

With Congress returning to session for a few weeks before the August break the main focus for members will be passing another multi-trillion dollar bipartisan COVID stimulus bill (see the previous ones) that they can agree on. This will likely be the final and most major piece of legislation before the November presidential election and will have a heavy political calculus behind it. Lawmakers will need to appease members of both parties, hundreds of lobbyists bidding for their special interest groups and most importantly the American public, many of whom have been hard hit by the COVID/Coronavirus crisis. Details are still emerging of what the final bill will contain, but here’s what is likely to be included.

I expect a lot more information to come to hand over the coming days so please check back or subscribe to get the latest information.

• Extension of the $600 weekly unemployment benefit (FPUC) is the highest impact item at an individual level as millions of jobless Americans are still need this benefit to make ends meet. This article provides an in-depth discussion of the options for extending unemployment benefits which includes a simple extension of the current $600 weekly payment for eligible claimants versus providing an incentive to go back-to-work. I suspect Congress will provide a hybrid option to keep the both parties happy. For jobless Americans this will mean a reduction of the $600 weekly FPUC payment to around $300 per week and a return-to-work deductible tax credit for those who stop taking UI benefits and get back to work.

• Another stimulus check. It’s highly likely there is going to be another one time economic payment (a.k.a stimulus check), but with a lowering of eligibility income thresholds to ensure only that the most needy get this payment. While the existing $1200/$2400 stimulus check amount is the likely blueprint for the next stimulus check amount, Trump is pushing for a higher amount. Some liberal Democrats like Kamala Harris are even pushing for a recurring monthly $2,000 amount for the second stimulus check! I think their will only be a single payment and while the amount may be more generous (around $1500) lower income eligibility levels will mean the overall cost will be comparable to the first stimulus check program. Congress will also likely address the issue with the $500 child stimulus which didn’t include high school and college age dependents. If approved before the next Congressional recess, this payment should start hitting bank accounts by mid to late August.

More than two-thirds of Americans say they still need a second stimulus check from the government to help make ends meet…..The expiring of the $600 unemployment benefit could be a severe financial shock to people’s income since another potential round of stimulus checks likely won’t be as large as the first payment

• Additional support for small business via additional funding and extension of the PPP program. In addition to the federal reserve providing liquidity to large business, these measures should reduce the number of business bankruptcies as consumer spending and overall economic growth will likely stay pressured with a resurgence of the pandemic.

• Back-to-School and Back-to-Work liability protections (Liability Shield) is something a number of Republicans want given their stance on dealing with the COVID-19 crisis. They want a quick return to normalcy but also want to ensure those business or districts that follow CDC guidelines but see a Coronavirus resurgence are not sued should someone get sick on their premises.

• A Trump payroll tax cut is something the President has been pushing for a lot. This would eliminate the payroll tax (7.65%) for the next year in worker paychecks and give employed Americans a temporary boost in take home pay.

• Additional funding will also be provided to states and first respondents for dealing with the Coronavirus response, including additional testing. This was a big part of the Democrats HEROES Act, which was approved in May – along party lines.

I will update this article as more information comes to hand.