Review of Economic Stimulus & Relief Measures To-Date

Throughout March and April 2020, the U.S. government passed three main relief packages and one supplemental package, totaling nearly $2.8 trillion. After the passage of the supplementary package in April, nicknamed “stimulus phase 3.5,” there was no substantial action on COVID-19 stimulus or relief from Congress for several months as each party proposed their own stimulus package.

The Democrat-controlled House of Representatives passed the $3 trillion HEROES Act in May 2020, and the Republican Senate Majority proposed but did not pass, the $1 trillion HEALS Act, in July 2020. Despite offers from the House Democrats to meet in the middle at $2 trillion, the Senate Republican majority refused to move from their position, insisting on less stimulus. Finally, following the election of President Biden in November, a $900 billion stimulus bill was passed in December 2020, which then-President-elect Biden said was a “down payment” on additional stimulus and relief to be passed in 2021.

During this period, President Trump and now President Biden have issued a plethora of executive actions attempting to provide aid during the pandemic, as have various executive branch agencies. A fifth major stimulus package, the $1.9 trillion American Rescue Plan, was signed into law by President Biden on March 11, 2021.

Package 1 – 03/06/2020

The first relief package, the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, since nicknamed Phase One, was signed into law on March 6, 2020, by President Trump. It allocated $8.3 billion to do the following:

  • Fund research for a vaccine.
  • Give money to state and local governments to fight the spread of the virus.
  • Allocate money to help with efforts to stop the virus’s spread overseas.

Package 2 – 03/18/2020

The second relief package, the Families First Coronavirus Response Act (FFCRA) or Phase Two, was signed into law on March 18, 2020. It provided for $3.4 billion in relief and included the following provisions:

  • Money for families who rely on free school lunches considering widespread school closures.
  • Mandating companies with fewer than 500 employees provide paid sick leave for those suffering from COVID-19, as well as providing a tax credit to help employers cover those costs.
  • Providing nearly $1 billion in additional unemployment insurance money for states, as well as loans to states to fund unemployment insurance.
  • Funding and cost waivers to make COVID-19 testing free for all.

Separately, on March 18, 2020, the Federal Housing Administration (FHA) and Federal Housing Finance Agency (FHFA) implemented foreclosure and eviction moratoriums for single-family homes whose mortgages are FHA insured or backed by Fannie Mae or Freddie Mac. The FHFA’s moratorium has been extended to March 31, 2021, and the moratorium on FHA and other government back loans has been extended to June 30, 2021.

Package 3: The CARES Act – 03/27/2020

The third, and largest, relief package was signed into law on March 27, 2020. By nominal dollar amount, it is the largest single relief package in U.S. history. This law, called the Coronavirus Aid, Relief, and Economic Security Act and nicknamed the CARES Act or Phase Three, appropriated $2.3 trillion for many different efforts:

  • Direct cash payment of $1,200 per person, plus $500 per child.
  • Expansion of unemployment benefits to include people furloughed, gig workers, and freelancers until Dec. 31, 2020.
  • Additional $600 of unemployment per week until July 31, 2020.
  • Waived early withdrawal penalties for 401(k)s for amounts of up to $100,000 until Dec. 31, 2020.
  • Mortgage forbearance and a moratorium on foreclosures on federally backed mortgages for 180 days.
  • $500 billion in government lending to companies affected by the pandemic.
  • $367 billion in loans and grants to small businesses through the Paycheck Protection Program (PPP) and expanded Economic Injury Disaster Loan (EIDL) program.
  • More than $130 billion for hospitals and health care providers.
  • $150 billion in grants to state and local governments.
  • Almost $60 billion for schools and universities.

Package 3.5 – 04/24/2020

A supplementary stimulus package, nicknamed Phase 3.5, was signed into law on April 24, 2020. It allocated $484 billion, mostly to replenish the PPP and the EIDL, and contains additional funding for hospitals and COVID-19 testing.

Another supplementary measure, the Paycheck Protection Program Flexibility Act of 2020, which modifies the PPP, was signed into law on June 5, 2020. It made the following changes to the program:

  • It allowed businesses 24 weeks to spend the money, up from the initial eight-week period.
  • It lowered the requirements for loan forgiveness: businesses now need to spend only 60% of their PPP funds on payroll instead of 75% previously.
  • The payment deferment period was extended from six months, to when the borrower finds out the amount of their loan forgiveness.
  • It allowed businesses that received PPP loans to delay paying payroll taxes.
  • It allowed businesses loan forgiveness if they don’t rehire workers who refused good-faith offers of re-employment or are unable to restore operations to levels before the COVID-19 pandemic.
  • It gave businesses until the end of 2020 to restore their payrolls to pre-crisis levels.
  • It increased the loan maturity of PPP loans taken out after June 5 to five years.
  • It extended the time borrowers must pay back unforgiven parts of the loan.54

Supplementary Measures and Trump Executive Orders

A third piece of supplementary legislation was passed on July 4, 2020, which extended the deadline for small businesses to apply for the PPP from June 30, 2020, to Aug. 8, 2020. At the time the bill was signed into law, $130 billion of PPP funding remained to be allocated.

The Trump administration enacted several other measures to provide fiscal stimulus. On March 13, 2020, Trump announced a state of emergency that freed up $50 billion in emergency aid for states, cities, and territories.

On March 17, 2020, Treasury Secretary Mnuchin extended the deadline for paying both individual and business taxes to July 15, an effort which he claimed would free up $300 billion in liquidity. On March 20, 2020, Mnuchin also extended the date to file taxes to July 15.

On March 20, 2020, Secretary of Education Betsy DeVos suspended student loan payments and interest accrual for federally held student debt. This suspension of payments and interest was extended through Sept. 30, 2020, as part of the CARES Act. On Jan. 20, 2021, the Department of Education announced it would extend federally held student loan forbearance again through Sept. 30, 2021.

Shortly after the passing of the American Rescue Plan, on March 30, 2021, the Department of Education announced the expansion of its student loan relief to include defaulted privately held loans as well. Just like federal student loans, there will be a 0% interest rate and a pause of collections that will affect 1.14 million borrowers who defaulted on a privately-held loan under the Federal Family Education Loan (FFEL) program since March 13, 2020.

On April 19, 2020, the Trump administration said businesses could delay payment of tariffs for 90 days if they have suspended operations during March and April and if they “demonstrate significant financial hardship.”

On Aug. 10, 2020, President Trump signed four executive actions to provide additional COVID-19 relief. The first action created the Lost Wages Assistance Program (LWA), which would roll out a $400-per-week payment to those currently receiving more than $100 a week in unemployment benefits. The plan called for $300 to be paid by the federal government and $100 by state governments. The program was retroactive through Aug. 1, when the $600 unemployment benefits expansion ended. The program was set to last through Dec. 6, or until the funds are exhausted, and the benefits were meant to be available immediately, according to Treasury Secretary Mnuchin.

The program was to be funded by up to $44 billion in money taken from the Federal Emergency Management Agency’s (FEMA) disaster relief fund.65 President Trump said the states should use the remaining aid given to them under the federal CARES Act to fund these payments, even though many states had already allocated these funds and state budgets are under intense strain.

Because the president cannot expand unemployment insurance without congressional approval, states had to scramble to build new systems to handle the LWA benefits. The program ultimately had enough money for each state to pay out for six weeks, although the end date of the program varies depending on when the state began making payments.

A second executive action extended the moratorium on payments and interest accrual on student loans held by the government until the end of 2020. The moratorium was previously set to expire on September 30, 2020. It was once again extended to Sept. 31, 2021, by the Department of Education.

A third executive action instructed the Department of the Treasury and the Department of Housing and Urban Development (HUD) to help provide temporary assistance to homeowners and renters. The action directed HUD to “promote the ability of renters and homeowners to avoid eviction or foreclosure.”

The order did not extend the CARES Act’s federal eviction moratorium, which expired July 24. The executive action also instructed the Federal Housing Financing Agency (FHFA), which oversees Fannie Mae and Freddie Mac, to “review all existing authorities and resources that may be used to prevent evictions and foreclosures for renters and homeowners.”

A fourth executive action deferred payroll taxes for Americans earning less than $100,000 per year for the period from Sept. 1, 2020, to Dec. 31, 2020. The taxes will still need to be paid back in 2021.

CDC Eviction Moratorium

On Sept. 1, 2020, the Centers for Disease Control and Prevention (CDC) announced an emergency eviction moratorium through Dec. 31, 2020. The moratorium was extended through March 31, 2021, and then again through June 30, 2021. The goal was to keep millions of Americans sheltering in their current homes instead of moving, thus helping to prevent the further spread of COVID-19. It applied to people who met five conditions:

  • You had to have made your “best efforts” to obtain government rental assistance.
  • You couldn’t expect to make more than $99,000 in 2020 as an individual, or $198,000 if married.
  • You had to have been laid off, had “extraordinary” out-of-pocket medical expenses (more than 7.5% of adjusted gross income), or had a “substantial” loss of household income.
  • You needed to do everything you could to make “timely” partial payments as close to the rent you owe as “circumstances may permit.”
  • Eviction would “likely” lead you to be homeless or must move to a place where you’d be crowded close with other people.

People who met these conditions were to write a signed declaration that this was the case and give it to their landlord. It also did not apply to hotels, motels, and Airbnb rentals. Renters could still be evicted for other reasons, such as criminal behavior or destruction of property. Notably, the order only delayed rent payments and did not compensate landlords for delayed rent. It also did not prevent landlords from applying penalties or interest of any amount due in January, nor did it state limits on what those could be. It’s possible some tenants may be required to pay all rent plus interest and penalties in January. The law included significant penalties for landlords who ignore the order, which took effect on Sept. 4, 2020.

Package 4 – 12/27/2020

On Dec. 21, 2020, the U.S. Congress passed a $900 billion stimulus and relief bill attached to the main omnibus budget bill. President Trump signed the bill on Dec. 27, 2020, but he urged Congress to increase the direct stimulus payments from $600 to $2,000. Its contents, as of Dec. 28, included:

  • Direct payments of $600 per person including for dependents 16 and under. The payments will be available to individuals making up to $75,000 per year.
  • Eleven weeks of expanded unemployment benefits starting on Dec. 27, 2020. The benefits would be expanded by $300 a week. The Pandemic Unemployment Assistance (PUA) program for self-employed and contract workers and the Pandemic Emergency Unemployment Compensation (PEUC) for people who have exhausted their unemployment have also been extended.
  • $325 billion in help for small business loans including $284 billion in forgivable PPP loans, $20 billion for EIDL grant for businesses operating in low-income areas, and $15 billion for live cultural venues.
  • An extension of the CDC eviction moratorium through Jan. 31, 2021, now extended through June 30, 2021.
  • $45 billion for transportation funding including $15 billion in airline payroll support, $14 billion for transit, and $10 billion for state highways.
  • $69 billion to public health measures including $22 billion in aid to states for testing and tracing, $20 billion to the Biomedical Advanced Research and Development Authority (BARDA), $9 billion to the CDC and state governments for vaccine distribution, and $9 billion to support healthcare providers.
  • $82 billion in education funding including a $54.3 billion K-12 Emergency Relief Fund and a $22.7 billion Higher Education Emergency Relief Fund.
  • $25 billion in emergency rent assistance.
  • $26 billion in nutrition and agriculture funding including a fifteen percent increase in Supplemental Nutrition Assistance Program (SNAP) benefits and food bank funding.

Biden Executive Orders

On Jan. 20, 2021, President Biden signed several executive orders including the following relating to stimulus and relief measures:

  • The nationwide moratorium on evictions and foreclosures was extended until March 31, 2021.
  • The deferral of federal student loan payments and interest was extended until Sept. 30, 2021.

On Feb. 16, 2021, President Biden extended the moratorium on foreclosures and evictions on homeowners with government-backed loans. He also extended the enrollment period for mortgage payment forbearance for government-backed loans until June 30, 2021 and extended the period of mortgage payment forbearance available to borrowers who entered forbearance before June 30, 2021, by up to six months.

Package 5: The American Rescue Plan – 03/11/2021

On March 11, 2021, President Joe Biden signed the American Rescue Plan Act of 2021, implementing a $1.9 trillion package of stimulus and relief proposals. Some facets of the plan, such as raising the minimum wage to $15 an hour, had to be excluded in order to pass the plan using budget reconciliation, a Senate procedure that allows bills to be passed using a simple majority. Roughly $350 billion of the total funding will go to state and local governments. The key points of the plan as it was passed are the following:

  • Direct cash payments of up to $1,400 for individuals earning less than $75,000 a year plus $1,400 per dependent. The amount of the payment decreases for people with income over $75,000, phasing out completely for individuals with an income of $100,000 a year.
  • Increasing the maximum annual Child Tax Credit from $2,000 a child to $3,000 per child between the ages of 6 and 17, and $3,600 for each child under the age of 6. The increase will last for the next year and payments are phased out for couples making over $150,000 a year and individuals who are heads of households making over $112,500 a year.
  • $300 a week in expanded unemployment insurance lasting through Sept. 6.
  • $130 billion in funding for K-12 schools.
  • $55.5 billion for the CDC to administer and distribute vaccines, diagnose and track COVID-19 infections, and purchase testing and PPE supplies.
  • $39 billion in funding for higher education.
  • $30 billion in funding for public transit.
  • $25 billion in emergency rental assistance.
  • $25 billion for the Small Business Administration to make grants for “restaurants and other food and drinking establishments.”
  • $40 billion in funds for childcare, including $15 billion in childcare assistance and $25 billion to help childcare providers continue to operate and meet payroll.
  • $15 billion to support airline industry workers.
  • $7.25 billion in additional PPP funding, in addition to expanding which nonprofits can benefit from the program.
  • Treats any student loan forgiveness passed between Dec. 31, 2020, and Jan. 1, 2026, as non-taxable income.

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