Today, by a vote of 220 to 211, the House passed the final version of the COVID-19 relief package (HR 1319), sending the bill to the President for his signature. With the current unemployment benefits expiring on March 14, Congress was under a tight deadline to get it passed and to the President’s desk.
After receiving the initial bill the House passed on February 27, the Senate made their revisions and passed the measure on March 6 by a vote of 50 to 49. Because the legislation is being considered under the budget reconciliation process, a simple majority is all that is necessary for passage.
Due to the Senate’s amended text, it was necessary for the House to vote again on the measure totaling $1.9 trillion. Below is an outline of the final bill:
Tax Provisions and Stimulus Payments
- Individual Stimulus Payments - The latest round of payments will be $1,400 for singles earning $75,000 or less, and payments will phase out completely at the $80,000 income level. Couples earning a combined income up to $150,000 will get $2,800 with payments declining up to $160,000. Children in those same households (fulltime students younger than 24) will be eligible for $1,400 payments. This is in addition to the $600 checks that were part of the December stimulus package.
- Earned Income Tax Credit – Expands the earned income tax credit for taxpayers without children by increasing the credit percentage and phase out thresholds. It also allows taxpayers 19 and older without children to qualify, phasing out the standard 25 to 64 threshold.
- Child Tax Credit - Most Americans would receive $3,000 a year for each child from ages 6 to 17 and $3,600 for each child under the age of 6 years old. It greatly expands the program from its current $2,000 a year for children up to 16 years old.
- Employee Retention Credit – Extends the employee retention credit established in the CARES Act until December 31. It also expands eligibility to new startups that were established after February 15, 2020, and companies whose revenue dropped 90% compared to the same time last year. The credit is capped at $50,000 per calendar year for startups.
- Paid Leave Credits - The bill provides paid leave of as much as $1,400 a week and tax credits for employers with fewer than 500 employees as reimbursement of the cost of sick time.
The measure extends the extra $300 Federal Pandemic Unemployment Compensation through September 6. It also extends the period for the Pandemic Unemployment Assistance to as long as 79 weeks and the Pandemic Emergency Unemployment Compensation program to 53 weeks.
The Department of Labor would receive $200 million for worker protection activities involving COVID-19, and of that amount, $100 million would be for OSHA enforcement of high risk sectors.
The legislation includes $160 billion for testing and vaccines, and it includes money for the creation of a national vaccine distribution plan with the goal of offering free vaccines to everyone, regardless of their immigration status.
Those laid off would continue to receive 100% of the costs of continuing health insurance (COBRA), instead of the 85% initially offered by the House. To assist rural health care providers, the Provider Relief Program received $8.5 billion.
If a state expands their Medicaid to cover the newly eligible under the ACA, the bill allows a state to increase their FMAP by five percentage points for up to two years. It also allows for FMAP increases in other scenarios.
The bill also modifies Medicaid allotments for disproportionate share hospitals, allows the CMMS to waive certain ambulatory requirements, and expands the ACA’s premium tax credits for health insurance purchased through an exchange.
- Testing and Tracing Activities: $47.8 billion
- Grants to Expand Public Health Workforce: $7.66 billion
- Manufacturing and Purchasing Vaccines: $6.05 billion
- Substance Abuse/Mental Health Grants: $3 billion
State and Local Aid
Nearly $360 million is included for state, local, and territorial aid:
- $195.3 billion is for states and Washington, DC, of which $25.5 billion would be distributed equally among the states/DC, and the remainder of the money would be based on the level of that state’s unemployed workers
- $130.2 billion is for local governments of which $65 billion is for counties/parishes, $45.6 billion is for metropolitan cities, and $19.5 billion is for towns with a population less than 50,000 residents
- $20 billion for federally recognized tribal governments
- $4.5 billion for territories
The bill sets a deadline of 60 days to distribute these funds and outlines the uses of the funds in the following ways:
- Aid in the economic effects of coronavirus but assisting small businesses, non-profits, households, and tourism/hospitality industry
- Pay premium wages to essential workers that cannot exceed $13 per hour or $25,000 per employee
- Assist any government service that was affected by a drop in revenue due to the pandemic
- Invest in water, sewer and broadband infrastructure
The measure also included $10 billion for critical infrastructure, which includes broadband and rural hospitals.
To aid schools reopening, nearly $170 billion was made available. Of that, $130 billion is for K-12 schools, and $40 billion goes to institutes of higher education. The bill includes a provision that require schools to submit plans regarding their reopening within 30 days.
The measure specifically allocates 20% of the K-12 funding (nearly $1.25 billion) for summer enrichment programs/after-school programs. The bill goes further to outline the additional uses for the remainder of the K-12 (includes charter schools that are local educational agencies) funding, which can be used for technology purchases, improvement of school systems to upgrade air quality, and providing an increase in mental health services.
The bill allocates nearly $2.75 billion to state governors under the Emergency Assistance to Non-Public Schools Program to provide nonpublic schools with assistance who enroll a significant percentage of low income students that are most impacted by Coronavirus.
Any state that receives these funds is not allowed to reduce its state education spending for FY2022 and FY2023 in proportion to the average level of FY2017 through FY2019.
The state allocates nearly $40 billion to the Higher Education Relief Fund and directs these funds be appropriated in the same manner as in the previous funding bills.
A provision was included that allowed the expanded restrictions on the 90/10 rule, but it delayed the implementation of it by several years.
Lastly, the bill includes a measure to make student loan forgiveness tax free.
The bill increases the Paycheck Protection Program’s lending authority to $813.7 billion and expands the eligibility rules to cover more tax exempt groups including:
- 501(c)(5) labor groups
- 501(c)(7) social clubs
- 501(c)(8) fraternal benefit societies
- Religious groups that are generally banned from SBA rules are permitted
It now allows 501(c)(3) groups with as many as 500 employees per location to participate. The bill also extends the PPP loan forgiveness for payments made for premiums for COBRA health insurance.
Under a new program called the Restaurant Revitalization Fund, restaurants will receive $25 billion, and venues will receive $1.25 billion under the Shuttered Venues Program.
Economic Injury Disaster Loans would receive $15 billion.
The bill funds grants to transit agencies at $30.5 billion for operating expenses, which includes payroll costs and personal protective equipment. It allocates $14 billion to certain airlines and $1 billion to air carrier contractors to be able to extend a payroll support program that is set to expire on March 31. Nearly $8 billion is available to support airports as they need to make changes to their facility or staff for COVID-19 protection measures.
Emergency Food and Shelter
FEMA’s Emergency Food and Shelter Program received nearly $510 million to aid in the assistance of homeless services – including rental assistance and utility payments.
With clearing this measure off their list, Congress is expected to begin focusing on a long term economic plan that is expected to include infrastructure and transportation aide.