Aug 09, 2020

What Congress’s Next Stimulus Package Might Look Like

The $600-per-week federal unemployment benefit just ran out for an estimated 25 million Americans. A nationwide eviction moratorium also expired at the end of July, putting nearly 30 million Americans at risk of losing their homes. But as those exceptions expire, the economic crisis caused by coronavirus is nowhere near being resolved, and many of the CARES Act benefits Congress passed in March are now mostly eliminated.

And Congress hasn’t been in much of a hurry to address this. The House of Representatives passed the $3 trillion HEROES Act in May, which would authorize a second round of $1,200 stimulus checks and extend the $600 unemployment benefits for the remainder of 2020. 

But the Senate spent much of July on recess, not taking up any relief bill discussions, while COVID-19 cases surged across the country. 

All this while the economic effects of coronavirus cut deeper into the economy—and for a longer period than many of us originally anticipated. The US economy just suffered its worst 3-month drop ever, according to the US Commerce Department, with little discernible hope for how things will rebound in the near future. 

Congress Is Still Debating COVID-19 Relief

There are big differences between the Democratic coronavirus stimulus bill the House already passed and whatever bill the Republican Senate will eventually pass. Both bills figure to agree on issues like increased aid to reopening schools, local governments, childcare funding, and COVID-19 testing and diagnostics. But the 2 proposals are light-years apart on big-picture questions like continued unemployment benefits and the rights of workers who become infected with coronavirus on the job. 

Even if these issues don’t seem to affect your small business directly, they will affect how much spending money is available in your customers’ wallets. Let’s take a look at what to expect from Congress’s next round of coronavirus economic relief.

Another $1,200 Stimulus Check

It’s almost a sure thing that there will be a second round of the $1,200 stimulus checks because both sides of the aisle want it. Democrats passed this in their House bill, and the Republicans say they want another round of these checks in whatever Senate bill they pass.

So you can be pretty sure that most US consumers will get another $1,200 check. The real question is how long it will take to show up.

A Second Round of PPP Loans

Both sides also agree on issuing another round of Paycheck Protection Program loans. This would allow businesses to reapply if they didn’t receive an initial PPP loan or receive a second loan even if they were already awarded one in the previous round. There will likely be another disbursement, so plan on applying for a PPP loan again.

Unemployment Benefits

Here’s where both parties are still far apart, all while peoples’ livelihoods are flying off a cliff. The Senate allowed a July 31 deadline on the $600 weekly unemployment benefit to pass and proposed a 1-week extension on it at the last minute. 

But those same Senate Republicans’ HEALS Act calls for federal unemployment payments to be reduced to just $200 per week. The Democratic House version proposes extending the current $600 benefit for the rest of 2020, saying this federal expenditure is critical for some families to avoid insolvency while certain career fields simply cannot operate. 

Legal Liability for Coronavirus Infections

The Republican Senate has insisted on COVID-19 liability protections for businesses, particularly for certain industries that have had significant outbreaks at their facilities, like meatpacking plants and nursing homes. Further unanticipated outbreaks could occur at other business types, so follow strict COVID-19 safety protocols if you want to ethically reopen your business.

The Trump White House has shown signs of rejecting these COVID-19 legal protections. Democrats also oppose these liability protections, setting up one of the many coronavirus relief legislative battles we may see in the weeks to come.

And the relief won’t come anytime soon. Washington DC partisan bickering will delay any second COVID-19 stimulus package from being passed until well into August—and maybe September. Even after that, it could take weeks or months for relief funds to arrive in the hands of small businesses and workers who need them.

Most importantly, this coronavirus relief bill is just another temporary bandage, as were the last batch of $1,200 checks and PPP loans. We will not enjoy permanent economic repair until we control the virus. If the US cannot contain the virus, we’ll probably be arguing over yet another short-term stimulus bill every 3 or 4 months for who knows how long.

We’re not going to have the kind of economy we had in early 2020 again until the virus is beaten. Bold government intervention is important to small businesses’ economic survival in the short run. But buyers probably won’t have the confidence to go out and spend again until the current public health crisis subsides, regardless of what fixes Washington applies.

About the author

Joe Kukura
Joe Kukura
Joe Kukura is a San Francisco freelance writer whose work also appears in SF Weekly and SFist. He’s written financial advice for NerdWallet, tech industry analysis for the Daily Dot, sports content for NBC Bay Area, and good, old-fashioned clickbait for Thrillist.

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