Immediately upon passing the FFCRA, the Senate began planning the trillion-dollar “phase three” Coronavirus Aid, Relief and Economic Security Act, a stimulus package aimed at helping American workers as well as bailing out several different industries that have faltered as a result of the COVID-19 outbreak.
The package is expected to utilize guidance from the Treasury Department’s proposal to lawmakers, which included $250 billion in direct payments to American taxpayers that varies based on income level and family size. Most American adults would get checks of up to $1,200, plus $500 for every child. Individuals who earn more than $75,000 would also receive a smaller rebate, and individuals who earn more than $99,000 won’t receive any benefit. Some of the country’s poorest, those who paid less than $1,200 in taxes in 2018, would receive a much smaller allowance, at a minimum of $600. As the Senate worked on this bill, Treasury Secretary Steve Mnuchin announced that tax filing day will move from April 15 to July 15 to further ease the burden and stress on taxpayers.
The package will also include $300 billion dedicated to small business relief. Cash will be provided for small businesses in the form of “loans” employers wouldn’t have to pay back as long as they maintain their payrolls during the crisis. Those rules would be retroactive to March 1, to entice employers to rehire workers who have already been laid off this month. The maximum amount a business could receive is $10 million, and the size of each loan would be calculated based on a business’ average expenses from last year, including payroll, mortgage payments and debts. Small businesses would also be allowed to use existing SBA loans for costs that aren’t usually covered, like paid sick leave, salaries, mortgage payments and supply chain disruptions. Additionally, the measure would fix a mistake in the 2017 tax law that keeps restaurants, hotels and stores from immediately writing off certain renovation costs; this change is estimated to return up to $15 billion a year to those industries.
The bill would give providers a 15% Medicare payment bump for COVID-19 patients, providing hospitals temporary relief as they brace for the influx of COVID-19 patients in the coming weeks. “Phase three” also includes a bailout for the airline industry, providing airliners with $58 billion in loans. This has proven to be one of the more controversial sections of the bill, after it became public knowledge that the major American airliners spent 96% of their free cash flow on stock buybacks over the past decade. Finally, the Act would suspend federal student loan payments for three months, pause Social Security taxes for employers the rest of the year, and give quicker reimbursements to business owners forced to provide paid time off to workers during the pandemic.
Current target date for completion is March 24, but negotiations could take longer. After Congress passes this third measure to stem the effects of the coronavirus, lawmakers are expected to begin negotiating a bill to fulfill the Trump Administration’s new request for $46 billion to help federal agencies in the fight against the virus and to further address issues not included in the FFCRA that could affect continuity of coverage and compliance issues for employer sponsored plans.
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