The economic fallout of the COVID-19 pandemic has been felt in every corner of the United States. Millions of individuals and families have been pushed to the breaking point these last eight months. The federal CARES Act, passed by Congress in March, provided much-needed protections for struggling Americans. These protections included unemployment benefits, student loan relief, and a ban on home evictions. Currently, all these protections are set to expire shortly after Christmas. Letting these protections expire will result in unimaginable consequences for millions of Americans. Seeing more action is needed, Congress is set to pass a new set of laws designed to renew some of the protections put in place with the CARES Act. This article will go over what the new bill includes and what it does not. We will also discuss if more stimulus bills will need to be passed in the future.
What is Included in the Bill?
It is important to note that the bill has not been finalized, and details may change when it is set to release later this week.
The first thing the bill will renew is the added protection and benefits to unemployed Americans. According to the Department of Labor, just under 9 million Americans collected the added unemployment benefits provided by the CARES Act in November. With the new bill set to pass Congress later this week, lawmakers hope to add $180 billion to unemployment benefits. These benefits will include unemployment insurance and an extension to unemployment payments.
Next, the bill will allocate $288 billion for small business funding. The hardest-hit industries during this pandemic are restaurants, bars, and small family-owned businesses. This new wave of funding hopes to keep these industries afloat while America continues to battle COVID-19.
The bill will also provide funding to help low-income Americans get tested for COVID-19 and help pay for the incoming vaccines. According to lawmakers, Congress will set aside $16 billion to help pay for testing equipment and the purchase of vaccines. Another $160 billion will help local governments handle the logistics of fighting off the COVID-19 virus.
Student loans have become a headache for more than 42 million Americans. The CARES Act suspended all payments and interest to federally acquired student loans until the end of December. Betsy DeVos, the Secretary of Education, extended the suspension until the end of January. The new stimulus bill plans to continue this suspension throughout next year.
Finally, the new bill will renew the ban on evictions in America. According to the Low Income Housing Coalition, 7 million Americans are at risk of eviction when the CARES Act expires at the end of the year. A significant problem with the CARES Act was it forbid evictions, but it did not suspend rent payments. This lack of suspension will result in millions of low-income Americans owing thousands of dollars in back rent when the ban on eviction is eventually lifted. To help counter this, Congress is providing $25 billion that will go towards rental assistance.
What is not Included in the New Bill
The most prominent absence from the new stimulus bill is the direct payment checks that were a cornerstone of the CARES Act. According to Mark Zandi, the Analytics chief at Moody’s, the next round of direct payment checks can wait until next year. In a statement to Fortune, Zandi talks about how the new stimulus bill needs to keep a tighter focus than the CARES Act. Sending out a blanket check to millions of Americans who may not need it seems like a poor use of funds at the moment. However, Mark Zandi did not rule out direct payment checks altogether. He made it clear that more stimulus bills will need to be passed in the future.
Future Stimulus Bills
It is unanimous across both sides of the aisle that more stimulus will be needed in the future. Nancy Pelosi, the Speaker of the House, plans on passing more dramatic stimulus laws after President-elect Joe Biden is sworn into office later in January. These new bills will most likely contain direct payment checks and a more robust response to student loan debt. In talks with President-elect Joe Biden, both Nancy Pelosi and Chuck Schumer presented the idea of forgiving all federal student loans up to $50,000. If this student loan forgiveness makes it into a new stimulus bill, it will relieve the pressure of debt for over 40 million Americans.
Bibliography
CDC. “Temporary Halt in Residential Evictions To Prevent the Further Spread of COVID-19.” Federal Register, United States Government , 4 Sept. 2020, www.federalregister.gov/documents/2020/09/04/2020-19654/temporary-halt-in-residential-evictions-to-prevent-the-further-spread-of-covid-19.
Fox, Michelle. “Beware the Covid Cliff: Here Are the CARES Act Benefits Coming to an End This Year.” CNBC, CNBC, 4 Dec. 2020, www.cnbc.com/2020/12/04/here-are-the-cares-act-benefits-coming-to-an-end-this-year.html.
Sraders, Anne. “Top Economists Say This Is What's on Their Stimulus Wishlist-and the Bipartisan Bill Looks Pretty Close.” Fortune, Fortune, 5 Dec. 2020, fortune.com/2020/12/04/second-stimulus-economists-wishlist-unemployment-testing-small-business-stimulus-checks-when-2nd-package/.
Walsh, Ben. “Vaccine Won't Immediately Improve Covid Mortality Rate, Fauci Says.” News Update: Vaccine Won't Immediately Improve Covid Mortality Rate, Fauci Says | Barron's, Barrons, 7 Dec. 2020, www.barrons.com/articles/news-update-details-of-bipartisan-stimulus-bill-to-be-unveiled-51607353384.
