Nancy Pelosi and House Democrats unveiled a revised coronavirus stimulus package proposal earlier today. The relief package is an updated version of the $3.4 trillion HEROES Act that House Democrats passed in May and comes in at $2.2 trillion in cost. This bill “provides the absolutely needed resources to protect lives, livelihoods and the life our democracy over the coming months,” said Pelosi in a letter to her Democratic colleague.
What’s In The $2.2 Trillion Updated Heroes Act?
House Democrats released the text of the updated Heroes Act as well as a one page summary. Here is what the new proposal includes:
- $1,200 Second Stimulus Check: The proposal calls for another round of direct payments to Americans, $1,200 for qualifying taxpayers and $500 per dependent
- $600 Extra Federal Unemployment Benefit: The updated Heroes Act would restore the $600 federal unemployment booster that expired at the end of July. It would continue the extra federal payments until the end of January 2021. This would “provide a vital safety net for the record number of Americans who are unemployed, including those connected to the gig-economy,” noted the one pager released by House Democrats.
- State and City Aid: The biggest budget item included in the updated package is $436 billion in aid to states and cities to help alleviate budget shortfalls caused by Covid-19. The amount is a dramatic reduction from the over $900 billion that Democrats had included in the original Heroes Act, but is still likely to be contentious as Republicans have been adamantly opposed to additional aid.
- Support For Small Business: The new proposal would include support for small businesses by extending the Paycheck Protection Program.
- Funding For Airline Industry Workers: Additional funding would be provided to keep airline industry workers paid. The Payroll Support Program, which had provided funding for the airline industry, was set to expire on September 30.
- Education and Child Care: The updated Heroes Act includes $225 billion for education as well as $57 billion that would go to support child care for families.
- Additional Items: In addition, the proposal would include funding for election security, the U.S. Postal Service, worker safety, food security, and coronavirus testing, tracing, and treatment.
Will New Proposal Lead To New Relief Bill?
Negotiations over another coronavirus stimulus package have been at a standstill. The new Democratic proposal comes as Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed talks in hopes of reaching an agreement before the November election. The two spoke Monday evening and also agreed to speak again Tuesday morning, according to Drew Hammill, a spokesman for Pelosi.
Mnuchin has indicated that his priorities for the next bill included additional aid for small businesses as well as additional assistance to the airline industry, both of which are included in Pelosi’s updated proposal. The sticking points to an agreement are in many ways the same as before: what level of federal unemployment aid to offer the millions of unemployed individuals and how much aid to offer states and cities.
While the updated Democratic bill maintains the $600 weekly federal unemployment offer as the original Heroes Act, this may simply be a negotiating stance. While the economy is still struggling, there has been improvement over the past few months with unemployment dropping to 8.4 percent. At that unemployment rate, “the case for compromising on the $600 per week unemployment insurance is much stronger,” said Jason Furman, former chair of Obama’s Council of Economic Advisors and currently a professor with Harvard’s Kennedy School of Government, in an interview. “That might have made sense when the unemployment rate was 15 percent. Coming down to something like President Trump’s number of $400 a week … I’d like to see Democrats say, ‘At 8.4% unemployment, we can do that,’” he continued.
State and local aid has remained a source of disagreement with Trump and Republicans opposing additional funding. However, with Democrats coming down more than half from their initial $900 billion demand, one would hope that a compromise could be reached.
“Democrats are making good on our promise to compromise with this updated bill, which is necessary to address the immediate health and economic crisis facing Americas working families right now,” Pelosi wrote in her letter to House Democrats. “We have been able to make critical additions and reduce the cost of the bill by shortening the time covered for now.”
As she begins an additional round of discussions with Mnuchin, hopefully both of them keep in mind the millions of Americans who are still struggling and need a renewed financial stimulus.
Further Related Reading:
Second Stimulus Package Update: Pelosi, Dems Drafting $2.2 Trillion Coronavirus Relief Bill
Second Stimulus Update: $1.5 Trillion Bipartisan Stimulus Bill ‘Not A Showstopper’ For White House