By now, a lot of Americans are being reminded that $1,200 doesn’t go very far.
The $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress on March 27 set aside $1,200 for a single tax filer ($2,400 for married couples with combined incomes of $150,000). Many Americans have already received the money, provided the Internal Revenue Service already had their bank information for direct deposits.
But with most states still under lockdown — with stay-at-home mandates, some that extend into June — that $1,200 will be eaten up fast. Many Americans couldn’t make their rent payments in April, and many more will miss rent in May. Small businesses are in the same boat: Restaurants, bars, and lots of retail stores have been ordered to close, and business owners are beginning to run out of cash, too.
The Senate this week passed a bill to add $210 billion to the funding pool to replenish the Paycheck Protection Program (PPP) after the initial $349 billion set aside for the program was spent in less than two weeks. But roughly 26 million people have filed for jobless aid in the five weeks since the coronavirus outbreak began — about one in six American workers.
But more help may soon be on the way. Congress is mulling three new stimulus programs that could help. Here are the details:
The Emergency Money for the People Act
Two House Democrats have introduced legislation – the Emergency Money for the People Act – that would give Americans $2,000 a month throughout the crisis caused by the coronavirus pandemic, and “until employment returns to pre-COVID-19 levels.”
Rep. Tim Ryan (D-OH) and Rep. Ro Khanna (D-CA), the sponsors of the bill, think the $1,200 payments Americans from the federal government are just not enough.
“The economic impact of this virus is unprecedented for our country. As millions of Americans file for unemployment week over week, we have to work quickly to patch the dam — and that means putting cash in the hands of hard-working families,” Ryan said in a press release.
“A one-time, twelve hundred dollar check isn’t going to cut it,” Khanna said in a press release. “Americans need sustained cash infusions for the duration of this crisis in order to come out on the other side alive, healthy, and ready to get back to work. Members on both sides of the aisle are finally coming together around the idea of sending money out to people. Rep. Ryan and I are urging leadership to include this bill in the fourth COVID relief package to truly support the American working class.”
Here are the eligibility requirements, according to Ryan’s press release:
- Every American adult age 16 and older making less than $130,000 annually would receive at least $2,000 per month.
- Married couples earning less than $260,000 would receive at least $4,000 per month.
- Qualifying families with children will receive an additional $500 per child – families will receive funds for up to three children.
- For example, a married couple making under $260K with 3 kids would receive $5,500 per month.
- Those who had no earnings, were unemployed, or are currently unemployed would also be eligible.
- Those who were not eligible in 2019 or 2018 but would be eligible in 2020, could submit at least two consecutive months of paychecks to verify income eligibility.
The Getting America Back to Work Act
The Getting America Back to Work Act, proposed by Sen. Josh Hawley (R-MO), would set up a refundable payroll tax rebate to cover as much as 80% of employer payroll costs. The act would also establish federal money for a rehiring bonus for employees who were laid off during the coronavirus crisis and later rehired.
“As layoffs mount, the time has come for bold action by the federal government to halt the damage to American workers and position the American economy for a comeback once the nation has defeated COVID19. This effort should include a major initiative to rehire workers now—and to keep them on payroll for the duration of this crisis. And it should include new measures to bring critical supply chains back to this country from China and elsewhere and to encourage domestic production,” Hawley said in a statement.
Art Laffer, a former economic adviser to President Reagan, endorses the act.
“A recurring biweekly payroll subsidy (rather than a one-time tax credit) would be faster and likely help boost spending because of what behavioral economists call ‘mental accounting,’ that is people are more likely to spend something that they see as a permanent income boost to their income,” Laffer wrote in a Fox News piece.
“If the payroll tax cut wage subsidy is temporary, it would incentivize people and businesses to work a lot harder right away as they return to work to take advantage of the tax abatement before it disappears, say before the end of the year,” he said.
The Rent and Mortgage Cancellation Act
The Rent and Mortgage Cancellation Act, introduced by Rep. Ilhan Omar (D-MN), would cancel mortgage and rent payments for an American’s primary residence for up to one year.
The bill would also include stipulations that there would be no debt accumulation for homeowners or renters, who also would not face negative marks on their credit history for missed or lare payments.
“The federal government needs to act now to protect tenants and mortgage-holders who are suffering, which is why I will be introducing a bill this week instituting a nationwide suspension on rents and home mortgage payments to last through the duration of the pandemic,” Omar said in a statement.
“Under my legislation, payments on all rental homes will be cancelled and landlords will be able to apply to have their losses covered by the federal government through a Rental Property Relief Fund to be administered by the Department of Housing and Urban Development (HUD). Additionally, all home mortgage payments will be suspended with mortgage holders being eligible to apply to a similar, HUD-operated Home Lenders Relief Fund,” she said.
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