A Second (Smaller) Stimulus Bill Has Been Passed: Here’s an Overview of the $600 Billion Package

Finally, after continued discussions that have lasted since mid-summer, late into the day on December 21, Congress finally passed a much anticipated (and arguably long-overdue) second stimulus package. Signed by President Trump on December 27, the new stimulus package has already begun affecting Americans as we rang in the new year. Spreading $600 billion (notably much less than March’s $2 trillion deal) amongst businesses, hospitals, families and individuals, this economic stimulus package is designed to bring relief to those experiencing the financial hardships caused by the continuation of the COVID-19 pandemic.

While this second stimulus package is less than what we saw from the CARES Act in March, it still far surpasses the Americans In Economic Stimulus Act of 2008 - which offered $168 billion in relief to individuals and businesses.¹  While this second stimulus package does include additional direct payments to citizens, the amount of direct payments has been reduced to $600 from the $1200 checks individuals received in March from the CARES act.  It also includes another round of assistance to businesses through a boost to the Paycheck Protection Program and small business loans.

This historic bill is actually only part of a larger $1.4 trillion spending package and contains a staggering 5,600 pages! Below are some highlights of the bill’s coronavirus-related relief efforts that could affect you, your family and your business in the near future.

Unemployment Benefits

Unemployment benefits as established in the original CARES Act are due to expire on December 31. With the newly passed act, those on unemployment can continue receiving an additional $300 in federal unemployment benefits for an additional 11 weeks.²

The CARES Act also established a pandemic unemployment assistant (PUA) program to offer unemployment benefits to those who have previously not been eligible - including those who have been furloughed by their employer, freelancers and gig workers (such as Uber or Lyft drivers).

This new act is set to extend the PUA program for an additional 11 weeks.²

Direct Stimulus Payments

Similar to the CARES Act, eligible American taxpayers will be receiving direct stimulus payments of $600 as part of the new bill. Just as before, individual taxpayers with Adjusted Gross Income up to $75,000 will receive $600 payments, while families with Adjusted Gross Incomes less than $150,000 (as reported on their 2019 tax returns) with children will receive $600 per individual and an additional $600 per child. That means that an eligible family of four will receive $2,400 in direct stimulus payments.²  The Treasury Department has indicated that these should begin being dispersed before the new year! 

Paycheck Protection Program (PPP) & Small Business Loans

A popular program throughout the pandemic, the Paycheck Protection Program will get the boost it needs to continue operating in 2021 - to the tune of around $284 billion. As a reminder, the PPP offers businesses under 500 people assistance in the form of forgivable loans that help cover payroll and other necessary operating expenses.²

Not seen in the CARES Act, this new package includes a “Save Our Stages Act,” which offers cultural centers, theaters and other live performance venues $15 billion in government assistance.²

Schools

A point of contention for several months now, schools across the country have had to make a very tough decision - continue virtual learning or bring kids back for in-person classes? Money appointed to schools in the initial CARES Act largely went to increasing technology capabilities for virtual learning and emergency financial aid grants to college students.

Around $82 billion will be split between the Elementary and Secondary School Emergency Relief Fund and the Higher Education Emergency Relief Fund.²

COVID-19 Vaccination Distribution & Testing

The FDA approved two COVID-19 vaccines in December, and distribution of them has begun. Approximately $69 billion from the new stimulus package will go towards vaccination procurement and distribution, as well as statewide testing-and-tracing measures.²

Rental Assistance

The new stimulus bill has extended the CDC’s moratorium on rent evictions through the end of January. 

For the millions of Americans past-due on their rent payments, the stimulus package includes $25 billion in rental assistance for qualified families and individuals.²

Food Assistance Programs

Food assistance programs, like SNAP, will receive around $13 billion in federal assistance.² 

For many, the passing of a new stimulus package may feel nothing short of a Christmas miracle. For others, the benefits provided may be falling short of expectations. Of note, President-elect Joseph R. Biden, Jr. is set to take office on January 20 and has already made it clear this will not be the end of government assistance amidst the COVID-19 pandemic.

On December 22, he tweeted, “I applaud this relief package, but our work is far from over. Starting in the new year, Congress will need to immediately get to work on support for our COVID-19 plan.”³ While we won’t know what additional relief may be coming, it’s possible the newly passed legislation could bring at least some good news to you, your family and your business.

Clearly, with this bill running a lengthy 5600 pages there are additional provisions not covered here, however, these are many of the major provisions in the bill that would likely affect the majority of people.  Hopefully this is a helpful start!

Does any of this bring up any additional questions? Things you hadn’t considered? Consider it an opportunity to reach out as I’m here to help!

Do you want to bring a new level of attention to your financial decisions? Reach out to me at ryanmohr@claritycapitalmgmt.com or

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