Policies & Issues

House Democrats Propose $3T Coronavirus Relief Bill

Policies & IssuesMay 13, 2020

House Democrats Propose $3T Coronavirus Relief Bill

The plan includes provisions for small businesses, including changes to the Paycheck Protection Program.

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A bill proposed by House Democrats would allocate new funding to small businesses struggling during the coronavirus pandemic. (Image courtesy of Wikimedia Commons/Martin Falbisoner)

Washington, D.C.—House Democrats unveiled a new $3 trillion coronavirus relief bill Tuesday afternoon that includes aid for state and local governments and additional funds for small businesses.

The House may vote as soon as Friday, but Senate Republicans are not expected to take up the bill until after Memorial Day.

Senate Majority Leader Mitch McConnell (R-Ky.) told reporters Monday, “We have not yet felt the urgency of acting immediately.”

President Donald Trump expressed similar sentiments last week, stating he was in “no rush” to pass another stimulus bill.

The 1,800-page bill, titled the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, includes about $1 trillion in relief funds for state, local, and tribal governments with a focus on suburban and rural areas.

Individuals could receive another round of $1,200 stimulus checks with households receiving up to $6,000.

In addition, the bill calls for the extra $600 per week in unemployment benefits to be extended through January. It is currently set to expire after July.

Essential workers facing health risks would be eligible for $200 billion in hazard pay. The bill would also allocate $175 billion in rent, mortgage, and utility assistance.

An additional $10 billion would go to the emergency Economic Injury Disaster Loans (EIDL) program, which provides emergency disaster assistance loans for small businesses administered by the Small Business Administration.

No additional funds would go to the Paycheck Protection Program, which was replenished in the previous bill, but the new bill would give companies until the end of the year to rehire workers and still qualify for loan forgiveness.

There would be a change to the way forgiven PPP loans are treated that could translate to billions in tax savings, according to Bloomberg.

The change would allow businesses to deduct payroll, rent, and other costs covered by PPP loans. The IRS had said those expenses are not deductible if the loan is forgiven.

The proposed bill also would extend the loans to more nonprofits, including trade associations and professional organizations, as well as to local tourism bureaus and chambers of commerce.

Following a rocky rollout of the PPP, which included big businesses taking millions in loans, the bill also focuses on getting funding to smaller businesses.

It would set aside 25 percent of the remaining funds for businesses with 10 or fewer employees, as well as allocate any returned or cancelled loan amounts to those businesses. Another 25 percent of the remaining funds would go to nonprofits.

The

employee retention tax credit would also be revised, said Bloomberg.

Under the new version, employers would get a tax credit worth up to $12,000 per employee per quarter, an increase of $5,000 per employee for the rest of the year.

Turning to the health aspect of the crisis, the bill would set aside $75 billion for an increase in testing and contact tracing, measures health officials have said are crucial to reopening businesses safely.

As the unemployment rate reaches nearly 15 percent, the bill would also include subsidies and an Affordable Care Act enrollment period for those who have lost health coverage from their employer.

The bill would also give $25 billion to the cash-strapped U.S. Postal Service and allocate $3.6 billion in funds to help local governments hold safe elections and arrange for voting by mail.

The new bill, the fourth of the coronavirus relief packages, would top the previous bill as the biggest emergency spending measure in U.S. history.

Though a House vote is likely Friday, the bill is expected to face opposition in the Senate.

Sen. McConnell said last week officials should hit pause and evaluate the effects of the previous relief package before deciding on a new one, while House Speaker Nancy Pelosi (D-Calif.) stressed the urgent need for relief.

“To those who would suggest a pause, I would say the hunger doesn’t take a pause, the rent doesn’t take a pause,” she said Monday in an interview with MSNBC.

McConnell characterized the bill as a “big laundry list of pet priorities” and said a bill would not pass in the Senate that did not include liability protections for business owners to protect against COVID-19 exposure lawsuits.

“This is not a time for aspirational legislation. This is a time for practical response to the coronavirus pandemic,” McConnell said Tuesday after the bill was made public.

Senate Republicans are not expected to vote on any additional relief provisions until June, following a Memorial Day recess.
Lenore Fedowis the senior editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

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