What's in the $908 Billion Bipartisan Stimulus Proposal?
A bipartisan and bicameral group of lawmakers yesterday unveiled a $908 billion COVID relief package. The proposal is the latest salvo in stimulus negotiations that have been ongoing since the summer, and includes state and local aid, augmented unemployment insurance benefits, a revival of the Paycheck Protection Program (PPP) and other small business relief, as well as money for vaccine development, supply, and testing and tracing programs, additional support for health providers, money to the airline and transport industry, and more.
The group includes Senators Joe Manchin (D-WV), Mitt Romney (R-UT), Bill Cassidy (R-LA), Susan Collins (R-ME), Maggie Hassan (D-NH), Angus King (I-ME), Lisa Murkowski (R-AK), Jeanne Shaheen (D-NH), and Mark Warner (D-VA). House members of the Problem Solvers Caucus also supported the effort: Representatives Tom Reed (R-NY), Josh Gottheimer (D-NJ), Anthony Gonzalez (R-OH), Dusty Johnson (R-SD), Abigail Spanberger (D-VA), Dean Phillips (D-MN), and Fred Upton (R-MI).
A full breakdown of the provisions and their reported costs is below.
|Paycheck Protection Program Second Draw Loans and Other Small Business Relief||$288 billion|
|Augmented UI Benefits (+$300/week for 4 months) & Pandemic Unemployment Assistance Extension||$180 billion|
|State and Local Aid||$160 billion|
|Education Relief||$82 billion|
|Airline and Other Transport Aid||$45 billion|
|Provider Relief Fund||$35 billion|
|Nutrition and Agriculture Programs||$26 billion|
|Rental Assistance||$25 billion|
|Vaccine Development & Supply, and Test & Trace Funding||$16 billion|
|CDFI/MDI Community Lender Support||$12 billion|
|U.S. Postal Service||$10 billion|
|Child Care||$10 billion|
|Opioid Treatment||$5 billion|
|"Offsets" (reductions in previous budget authority)||-$560 billion|
|Net Total||$348 billion*|
Source: Summary posted by Sen. Manchin's office
*Although the proposal rescinds funds from the PPP program and the Federal Reserve’s lending facilities, those funds would not have been spent anyway under current law so the actual deficit impact will be closer to $900 billion. The precise deficit impact is unknown — for example, unemployment benefits could cost more or less depending on unemployment levels and PPP loans may not be fully utilized.
The proposal in its current state also includes a 6-month temporary federal liability shield against COVID-related lawsuits that would provide states with time to put in place their own liability protections.
The proposal is less than the original House-approved Heroes Act ($3.4 trillion) and its revised version ($2.2 trillion), as well as a previous Senate proposal, the HEALS Act, which was never voted on ($1.1 trillion). The total amount of fiscal support in the proposal is more than what was in a $500 billion Senate relief bill that was voted down twice.
Romney said that the bill would repurpose $560 billion in unused funding from the CARES Act, making the overall amount of "new" appropriations closer to $350 billion. The unused funds mentioned by Romney are likely from two main CARES Act appropriations: money set aside to backstop Federal Reserve facilities and lending programs, and unused Paycheck Protection Program funds. Those funds would not be spent under current law, so repurposing them would not technically reduce deficits.
First, the Paycheck Protection Program ended on August 8, 2020 with $134 billion remaining. Second, the CARES Act set aside $454 billion for Fed facilities and $46 billion to backstop direct loans to airlines and firms critical to national security. To date, $195 billion has been committed to support five Fed facilities,1 yet only $25 billion has been used to support $25 billion in loans. Around $20 billion of the $46 billion in Treasury support for direct loans to airlines and national security firms has been used to date (see more at www.COVIDMoneyTracker.org). Treasury Secretary Steven Mnuchin recently requested that the Fed retire the CARES-Act funded facilities at the end of the year and return $455 billion in unused Treasury support back to the Treasury for reappropriation.
The proposal does not contain a second round of Economic Impact Payments (stimulus checks), which was included in both versions of the Heroes Act and the HEALS Act, but not the more recent Senate proposal. Other omissions from previous bills include no hazard pay for workers, no individual tax cuts, and no offsetting business tax cut rollbacks. The federal unemployment plus-up is more generous than the HEALS Act, both in dollar amount and duration, but less generous than the $600 a week offered in the Heroes Act. Other categories are similar to both the Heroes Act and HEALS Act, albeit with smaller overall appropriations.
This blog post is a product of the COVID Money Tracker, a new initiative of the Committee for a Responsible Federal Budget focused on identifying and tracking the disbursement of the trillions being poured into the economy to combat the crisis through legislative, administrative, and Federal Reserve actions.
Note: This blog was updated on December 2 to include new information that federal unemployment payments to self-employed and gig workers (Pandemic Unemployment Assistance) would also be extended under the proposal.
1 The Primary Market Corporate Credit Facility, Secondary Market Corporate Credit Facility, Municipal Liquidity Facility, Main Street Lending Program, and Term-Asset-Backed Securities Loan Facility