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New Economic Relief Packages Compared

On Monday, July 27 the Senate released their $1 Trillion stimulus package, the Health Economic Assistance Liability Protection, and Schools Act (HEALS Act). This came months after the House of Representatives released their $3 Trillion stimulus package on May 15th, the Health Economic Recovery Omnibus Emergency Solutions Act, (HEROES Act). These two packages are vastly different, it is unclear how the Republicans and Democrats will reconcile their differences or when a final decision will be reached. Initially, it was believed they would come to a resolution before the July 31st expiration date of the supplemental $600 unemployment benefits. However, congressional negotiations will continue into August.

Federal Unemployment Payments

The CARES Act expanded unemployment insurance benefits through programs like the Federal Pandemic Unemployment Compensation (FPUC) program. The FPUC provided an extra $600 payment in addition to their regular State unemployment payment.

The HEROES Act proposes to extend the weekly $600 supplemental payment to the end of January 2021.

The HEALS act also extends supplemental payment but reduces the payment to $200 per week through the end of September. The payment will then be replaced with a payment that when combined with state benefits it would be equal to 70% of a worker’s prior income. Additionally, the federal payments are capped at $500 which means not all worker’s will get 70% of their previous wage

Stimulus Checks

Both HEALS Act and HEROES Act include a second stimulus check of $1,200 for every adult:

  • Individuals filing single with an adjusted gross income of $75,000, the payment is reduced by $5 for every $100 above the threshold and phases out completely at $99,000.
  • Married couples filing jointly with an adjusted gross income of $150,000 the payment is reduced by $5 for every $100 above the threshold and phases out completely at $198,000.
  • Individuals filing Head of household with an adjusted gross income of $112,500 the payment is reduced by $5 for every $100 above the threshold and phases out completely at $136,500.

The HEROES Act expands eligibility to those without a Social Security Number(SSN) to include those with Individual Taxpayer Identification Number (ITIN). It also expands eligibility to dependents over the age of 16, disabled veterans, and dependent parents. Each household would receive $1,200 for each dependent. Each household can receive payments for up to 3 dependents. Capping payments to $6,000 per household.

The HEALS act excludes individuals who do not have a Social Security Number and only provides a $500 check for each dependent regardless of age.

If the President signs the Bill by August 10th then the first checks might be sent by the week of August 24th. The second round of check may arrive faster than the first since the IRS has developed tools to facilitate payments, such as Get My Payment.

Paycheck Protection Program

The HEROES Act does not provide any additional funding for the PPP, it only makes modifications. For instance, it eliminates 60% payroll requirement for loan expenditures. It allocates 25% of existing funds for business with fewer than 10 employees and another 25% of existing funds to nonprofits.

The HEALS Act includes the Continuing Small Business Recovery and Paycheck Protection Act. This Act proposes an additional $190 billion in funding for PPP. It would give PPP loan recipients an opportunity to get another PPP loan. Only businesses with less than 300 employees and those that can demonstrate a 50 percent reduction in revenue will be eligible for loans. Forgivable expenditures would be expanded to authorize covered worker protection expenditures and covered operation expenditures. There is also a $25 billion fund specifically for business with 10 or fewer employees.

Housing Assistance

The HEROES Act extends the eviction moratorium that expired on July 24th for up to an additional year and includes a $100 billion emergency rental assistance program. It also provides continued relief to homeowners including extended foreclosure moratorium for 6 months and the ability to request forbearance for up to a year. As well as a $75 billion for homeowner assistance fund to prevent defaults, foreclosures, or loss of essential utilities.

The HEALS Act does not include an extension for the eviction moratorium. It only provides $3.3 billion for lost income for Housing Choice Vouchers. Administered by the U.S. Department of Housing and Urban Development (HUD).

Direct Funding for State and Local Governments

The HEROES Act provides $1 trillion for state and local governments, it is a focal point for the Democratic bill.

The HEALS Act does not allocate any additional funding for state and local governments. It only provides more flexibility to the $150 billion state funding already provided in the CARES Act.

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