Wednesday, February 21, 2024

Stimulus deal reached: Leaders announce deal on COVID-19 relief plan and government funding bill

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Top Capitol Hill negotiators reached a deal on Sunday on a nearly $ 1 trillion COVID-19 economic relief package, finally bringing long-awaited help to businesses and individuals and providing cash to deliver vaccines to a country that wants it.

The deal, announced by Senate leaders, would establish temporary additional benefits of $ 300 per week for unemployed workers and $ 600 in direct stimulus payments to most Americans, as well as a new round of grants for hard-hit businesses. and money for schools, health care providers and tenants facing eviction.

The House was expected to vote on the bill very late Sunday or Monday and Senate action would follow. Lawmakers are eager to leave Washington and end a tumultuous year.

A breakthrough came on Saturday night in an emergency power struggle for the Federal Reserve that was resolved by Senior Senate Democrat Chuck Schumer of New York and conservative Republican Pat Toomey of Pennsylvania. This led to a final round of negotiations.

The final deal is the biggest spending measure to date. It combines COVID-19 relief with a $ 1.4 trillion government funding plan and many other unrelated measures on taxes, health, infrastructure and education.

The crossing approaches as coronavirus cases and deaths increase and evidence accumulates that the economy is struggling.

The last-minute decisions would limit the premium of $ 300 per week of unemployment benefits – half of the additional federal unemployment benefit provided by the CARES Act in March – to 10 weeks instead of 16 weeks as before. The direct stimulus payment of $ 600 to most people is also half of the March payment, subject to the same income limits in which an individual’s payment begins to disappear after $ 75,000.

President Donald Trump is supportive, in particular, of the desire to provide more direct payments. “DO IT DONE,” he said in a tweet on Saturday night.

It would be the first major legislative response to the pandemic since the $ 1.8 trillion CARES law was passed almost unanimously in March.

The legislation has been delayed by months of dysfunction, posture and bad faith. But the talks turned serious last week, as lawmakers on both sides finally faced the deadline to act before they left Washington for Christmas.

Meanwhile, as the government shutdown deadline looms at midnight Sunday, lawmakers have faced the reality of the need to enact yet another temporary spending bill – the second in as many days – to avoid shutting down non-core activities of federal agencies on Monday.

Lawmakers had hoped to avoid this step, but progress slowed on Saturday as Toomey pushed for the inclusion of a provision to shut down the Fed’s lending facilities. Democrats and the White House said the wording was too broad and would have tied the hands of the new Biden administration, but Republicans rallied to Toomey’s position.

The Fed’s emergency programs provided loans to small and medium-sized businesses and bought government and local government bonds. These bond purchases made it easier for these governments to borrow, at a time when their finances were under pressure from job losses and health costs associated with the pandemic.

Treasury Secretary Steven Mnuchin said last month that these programs, along with two that bought corporate bonds, would close at the end of the year, prompting an initial objection from the Fed. Under the Dodd-Frank Financial Review Act passed after the Great Recession, the Fed can only implement emergency programs with the support of the Secretary of the Treasury.

Toomey said the emergency powers were designed to stabilize financial markets at the height of the pandemic this spring and expire at the end of the month anyway. Democrats said Toomey was trying to limit the Fed’s ability to stimulate the economy, just as President-elect Joe Biden was preparing to take office.

The virus aid deal would bring more than $ 300 billion in aid to businesses, as well as an additional $ 300 a week for the unemployed and the renewal of state benefits that would otherwise expire just after Christmas. It included $ 600 in direct payments to individuals; vaccine distribution fund; and money for tenants, schools, the postal service and people in need of food assistance.

The government-wide appropriation bill would fund agencies until next September. The move was likely to provide a final installment of $ 1.4 billion for Trump’s border wall between the United States and Mexico as a condition for earning his signature.

More to read absolutely financial cover of Fortune:


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