A Second Coronavirus Stimulus Bill Is Coming. Here’s What’s In It For You (Updated)

The first federal coronavirus rescue package is running dry.

In this photo illustration, a COVID-19 Unemployment Assistance Updates logo is displayed on a smartphone on top of an application for unemployment benefits on May 8, 2020, in Arlington, Virginia. OLIVIER DOULIERY/AFP via Getty Images

As the coronavirus pandemic continues to deprive millions of Americans of a living wage, a second round of federal economic stimulus is more needed than ever. However, even as leaders in Congress are debating over the specifics of such a rescue bill, they don’t seem to be anywhere close to reaching an agreement before the first coronavirus stimulus package runs dry.

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Updated: This story continues to be updated as negotiations continue.

One of the most important items under discussion is the extra $600 weekly unemployment benefit that helped millions of jobless Americans make ends meet during the early months of the pandemic. This federal benefit under the CARES Act is set to expire at the end of July. And those relying on it will have to endure at least a few weeks without government aid before a second coronavirus bill could pass.

“I envision that this bill doesn’t get done by the end of July,” House Minority Leader Kevin McCarthy (R-Calif) said on CNBC’s “Squawk Box” on Tuesday.

In May, the Democratic-controlled House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act), which calls for extension of the $600 weekly unemployment benefits, increased one-time stimulus checks to American families and forgivable loans for small businesses and local governments.

The GOP-controlled Senate strongly opposed the bill, which would require a total of $3 trillion in federal aid, arguing that such level of government aid is unnecessary as the economy reopens; now that the economy is shutting down again, they’re arguing that benefits should not be so high that they prevent people from going back to work.

Republicans have said they want to keep the price tag of the second coronavirus bill around $1 trillion.  House Speaker Nancy Pelosi has contended that it wouldn’t be nearly enough given the seriousness of the pandemic.

Each side has specific demands.

Unemployment Insurance Expansion:

  • The HEROES Act continued the expanded unemployment insurance at $600 a week, with a small expansion for families with multiple children.
  • Update (7/23): Republicans have discussed offering a far more limited expansion, at around $100 a week.

Tax cuts:

  • President Trump has called for a temporary payroll tax cut and said he would not sign a bill without one.
  • Update (7/23): Republicans in Congress said that there would be no payroll tax cut in its new stimulus proposal. Unemployment rose for the first time in several weeks, mitigating its usefulness.

Business liability:

  • This is a big one for Republicans, who want to protect employers, schools, and other institutions from lawsuits over injuries and COVID-related illnesses. They seek to increase the threshold required to be found liable for responsible for injuries and infection and funnel cases to the federal court system. Senate Majority Mitch McConnell (R-KY) has made a long list of demands on behalf of corporations seeking protection.

Direct payments:

  • There’s a large gap here between what Republicans and Democrats have proposed or indicated might be possible. After the first stimulus provided a one-time $1200 check to many Americans, the HEROES Act contained the same, but with more generous benefits to families that reached up to $6000.
  • Sen. Kamala Harris (D-CA) has suggested monthly payments of $2000 during the crisis, enabling people to pay for rent and necessities without having to risk their lives.
  • While Trump has said he’s open to a second round of checks, Republicans are very unlikely to consider any kind of monthly payment.
  • They’re also focused on means-testing any federal aid, limiting it more than the first round, when Americans who made up to $75,000 in 2019 got the full $1200 check and people who made between $75,000 and $100,000 got a prorated amount. McConnell has floated a $40,000 cap.

Other Benefits:

  • The HEROES Act also included debt relief; among the most notable benefits included debt forgiveness of up to $10,000 in student loans.
  • Update (7/23): New proposals include money for education, healthcare, and other related expenses, including $26 billion for vaccines and $105 billion for education.

On a call with House Democrats on Tuesday, Pelosi said she hopes the parties “can resolve our differences and have a bill by the end of next week,” which is July 31, per CNBC. Treasury Secretary Steven Mnuchin hinted the same timeline on Tuesday. Even if Congress can draft a bill by then, they still need time to vote on the legislation.

McCarthy said he expects Congress to pass a bill “probably in the first week of August.” That’s because the Senate will go on a month-long recess on August 8. If they don’t pass a bill by then, the entire deal might have lost momentum when they come back in September.

A Second Coronavirus Stimulus Bill Is Coming. Here’s What’s In It For You (Updated)