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US Senate passes $1.9 trillion stimulus bill

Written by Hivelr News · 3 min read >
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WASHINGTON DC – The US Senate passes a $1.9 trillion stimulus package on Saturday without any Republican support after a marathon late-night session. The House will vote on Tuesday before it goes to US President Joe Biden for the final signature to make it the law of the land.

The $1.9 trillion stimulus package will include $1,400 stimulus checks, $300 per week unemployment benefits for the entire Summer, $350 billion State aids, $34 billion for the Universal Healthcare subsidies, and $14 billion vaccination.

The Coronavirus relief bill approval becomes the victory symbol for the Biden administration after winning the election last year. The Trump administration could not work through the gridlock of bi-partisan approval after several fail attempts near the end of his presidency. The stimulus bills will also allow the current administration to deliver a $15 minimum wage to the campaign promise.

The Senate limits the eligibility for the $1,400 checks for the individual who makes $80,000 per year or a combined household income of $160,000. It will also provide full coverage for the Consolidated Omnibus Budget Reconciliation Act (COBRA) for unemployed Americans. Besides, the bill allows the first $10,200 of the unemployment benefits to become nontaxable for American who earns less than $150,000.

How would the stock market react on Monday after a massive sell-off and wild reversal last week?

$1.9 trillion stimulus package breakdown

Based on the Committee for a Responsible Federal Budget report, below is the summary of the $1.9 trillion rescue plan’s main elements. It includes the third round of stimulus checks, extension of unemployment benefits, additional tax credits, funding for education, and local governments’ support. The stimulus package will also include the vaccine distribution and $54 billion to bring up the federal minimum wage to $15 per hour by 2025.

PolicyDeficit impact, 2021-2031
Ways & Means$923 billion
Provide $1,400-per-person stimulus checks $422 billion
Extend unemployment programs through August 29 with a $400/week supplement $246 billion
Expand Child Tax Credit, Child Care Tax Credit, and Earned Income Tax Credit mostly for one year$143 billion
Provide grants to multi-employer pension plans and change single-employer pension funding rules$58 billion
Temporarily expand ACA subsidies for two years and subsidize 2020 and 2021 coverage$45 billion
Extend paid sick leave and employee retention credit$14 billion
Subsidize COBRA coverage for laid-off workers*$8 billion
Repeal rule allowing multinational corporations to calculate their interest expenses including foreign subsidiaries-$22 billion
Other policies$9 billion
Oversight & Reform$350 billion
Provide money to state governments$195 billion
Provide money to local governments, territories, and tribes$155 billion
Create paid COVID leave for federal workers and other policies$0.4 billion
Education & Labor$290 billion
Provide funding for K-12 education$129 billion
Provide funding for colleges and universities$40 billion
Increase the federal minimum wage to $15/hour by 2025$54 billion
Provide support for child care, grants to child care providers, and Head Start$40 billion
Subsidize COBRA coverage for laid-off workers*$10 billion
Extend nutrition assistance in place of school lunch for the duration of the emergency and other food assistance$7 billion
Human services, labor programs, and other policies*$11 billion
Energy & Commerce$122 billion
Increase funding for testing and contract tracing$50 billion
Increase public health workforce and investments$19 billion
Fund vaccine distribution, confidence, and supply chains$16 billion
Increase Medicaid payments to states that newly expand Medicaid under the ACA$16 billion
Allow states to expand Medicaid coverage for prisoners close to release and for pregnant and postpartum women for 5 years$9 billion
Remove the cap limiting how much drug manufacturers must rebate to Medicaid for drugs that have increased quickly in price-$18 billion
Other policies*$31 billion
Transportation & Infrastructure$90 billion
Increase funding for the Disaster Relief Fund and cover funeral expenses related to COVID$47 billion
Provide grants to transit agencies $28 billion
Provide grants to airports and aviation manufacturers$11 billion
Provide grants to communities under economic stress$3 billion
Grants to Amtrak and other transportation-related spending$2 billion
Financial Services$71 billion
Provide emergency rental assistance and assist homeless$30 billion
Provide grants to airlines and contractors to freeze airline layoffs through September$12 billion
Use Defense Production Act to buy and distribute medical supplies$10 billion
Provide mortgage payment assistance$10 billion
Reauthorize and fund the State Small Business Credit Initiative$9 billion
Small Business$50 billion
Provide grants to restaurants and bars that lost revenue due to the pandemic$25 billion
Provide additional EIDL Advance grants of up to $10,000 per business$15 billion
Allow more PPP loans and expand eligibility to certain non-profit and digital media companies$7 billion
Other policies$3 billion
Veterans’ Affairs$17 billion
Provide funding for health care services, facilities, and copays for veterans$16 billion
Fund job training assistance programs for veterans and other VA administrative costs$1 billion
Foreign Affairs (no legislation reported yet)$10 billion
  
Natural Resources (no legislation reported yet)$1 billion
  
Science, Space, & Technology (no legislation reported yet)$1 billion
  
Total*$1.927 trillion
Source: CRFB calculations from Congressional Budget Office and House Budget Committee documents. This table shows the deficit impact of various provisions, which may differ slightly from the total amount of aid offered. For instance, $50 billion is allocated to the Disaster Relief Fund, but CBO estimates that only $47 billion will ultimately be spent, based on past precedent. As another example, there are $15 billion in loans and grants given to airlines, but the previous version of this bill has led CBO to conclude that $3 billion will ultimately be repaid or given to the government as stock as a condition of accepting the support.
*The total removes $14 billion from COBRA subsidies and funding for LIHEAP that are shared between two committees and would be double-counted if summing each committee’s total.

In total, the bills together would increase on-budget deficits through 2030 by $1.94 trillion, which is slightly higher than the total envisioned for the House and Senate bills of $1.889 trillion. The overall bill will need to be made about $50 billion less costly in order to comply with reconciliation instructions in the Senate and be eligible to pass with a simple majority.

Committee for a Responsible Budget Federal Budget
CommitteeDeficits in Legislation*Maximum AllowedSpace Left Over
Ways & Means$930 billion$941 billion$11 billion
Oversight & Reform$350 billion$351 billion
Education & Labor$303 billion$357 billion$54 billion
Energy & Commerce$125 billion$188 billion$63 billion
Transportation & Infrastructure$90 billion$96 billion$5 billion
Financial Services$73 billion$75 billion$2 billion
Small Business$50 billion$50 billion
Veterans’ Affairs$17 billion$17 billion
Agriculture$16 billion$16 billion
Foreign Affairs (no legislation reported yet)$10 billion
Natural Resources (no legislation reported yet)$1 billion
Science, Space, & Technology (no legislation reported yet)$1 billion
Subtotal$1,954 billion$2,102 billion$137 billion
Remove Overlap-$14 billion-$213 billion 
Total$1,940 billion$1,889 billion-$51 billion
*This total differs from the above table because the deficit measure used for compliance with the reconciliation instructions ends in 2030 (one year before the end of the traditional 10-year scoring window) and excludes off-budget revenue and spending, such as Social Security.

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Written by Hivelr News
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