We’re beginning to see what the $1.9 trillion Covid-19 stimulus package might actually look like.
The House of Representatives has been busy drafting its version of the budget reconciliation package, which includes $1,400 stimulus checks for those making up to $75,000, $400 expanded weekly unemployment insurance benefits through August 29, and, as it stands now, increasing the minimum wage to $15 by 2025. It also contains a restaurant rescue fund, money for reopening schools, and Democrats’ long-sought-after funding for state and local governments, among other items.
The biggest ticket items have been among the most contentious: Though there was some discussion of further targeting for stimulus checks, the House proposal winds up pretty close to Biden’s original plan. The $1,400 stimulus checks are for those making up to $75,000 a year, and the checks phase out at $100,000 yearly income (there has been quite a bit of back-and-forth over whether to aim them more precisely at lower-income people).
The expanded weekly unemployment benefits are currently set at $300 and expire on March 14; this bill expands them to $400 through August 29 and extends pandemic-related benefits for freelancers and contractors, along with extended state benefits, for the same period. That shaves one month off Biden’s proposal.
One big question mark in the House proposal is the federal minimum wage, which the bill would raise to $15 an hour by 2025. There are important questions as to whether a minimum wage hike can get through the reconciliation process and make it past the Senate parliamentarian, but for now, at least, Democrats are determined to fight for it. “Our strategy is to make an aggressive case with the parliamentarian,” one Democratic Senate aide said, noting Republicans were able to include work requirements for beneficiaries of social programs and open up Arctic wildlife refuges in past reconciliation bills. “These were some pretty outlandish policies that were able to pass muster.”
One thing this bill doesn’t include is automatic stabilizers, or tying unemployment benefits to the actual unemployment situation instead of picking a specific date for them to expire.
Several House committees have had a hand in crafting portions of the bill. The committees submitted their recommendations on what should be in it to the House Budget Committee, which on Monday completed its markup of the bill and packaged the whole thing together.
This is nowhere close to a done deal, and much still can change about what’s in the final bill, in both the House and in the Senate. A more bipartisan deal — which would look pretty different from this one — isn’t yet entirely off the table, though it looks unlikely at this point. And while the Senate looks likely to work from the House bill, since they were tied up with impeachment and Cabinet confirmations, they are likely to make amendments and changes to it, after which the legislation would then be bounced back to the House.
The Senate also has to keep in mind the rules governing what can be done through budget reconciliation. Aides say House and Senate committees have been in close communication on the legislation so that they don’t end up with a bunch of ping-ponging back and forth later, though some of that will likely be inevitable. The clock is ticking, and Democrats have every intention of getting more stimulus passed before the unemployment insurance cliff appears on March 14.
What’s in the House’s reconciliation bill, so far
From the Education and Labor Committee
Money for school reopening and higher education: In line with Biden’s proposal, the bill calls for $130 billion toward school reopening, directing funds toward areas such as ventilation system upgrades, reduced class sizes, and personal protective equipment to help make schools safer, and ensures the money is directed toward public schools. Schools are required to put 20 percent of money toward learning loss, meaning efforts to make up for lost ground with students missing school. It also directs $40 billion in grants to higher education and requires institutions that receive funding to dedicate at least half of it to emergency financial aid grants for students. At for-profit higher education institutions, 100 percent of allocations have to go to student aid.
Child care help: The proposal would put $39 billion toward a grant program for child care providers, ordering them to prioritize relief for families having a hard time covering tuition, as well as $1 billion for the Head Start program.
Funds for health care access: The bill provides subsidies for COBRA (continued health coverage when people lose their jobs) with a premium reduction of 85 percent through September, and puts in place provisions to improve subsidies for health coverage through the Affordable Care Act marketplaces.
Food assistance and resources for families and children: The House bill puts $5 billion more into an existing Pandemic-EBT program to help low-income families with food assistance during the school year and the summer as well as additional funds for WIC, which supports women and children. It also expands the age of eligibility for the Child and Adult Care Food Program at emergency homeless shelters for young adults, and puts millions of dollars toward programs meant to address child abuse and neglect and domestic violence. And it puts $4.5 billion into the Low Income Home Energy Assistance Program to help families cover the costs of heating and cooling their homes.
Funds for older Americans: The bill invests $1.4 billion in programs for older adults under the Older Americans Act, including nutrition programs, support services, and disease prevention programs.
A $15 minimum wage: The bill seeks to increase the federal minimum wage to $15 an hour, which the Congressional Budget Office estimates will increase wages for 27 million workers (some Democrats say it will raise wages for 32 million workers). There’s some debate as to whether this provision can be done through reconciliation. The bill also puts $150 million toward the Department of Labor for the implementation of Covid-19-related worker protection programs.
Transportation and Infrastructure
Disaster relief: The bill has in it $50 billion for reimbursing state, local, tribal, and territorial governments for their Covid-19 response expenses, including vaccinations, PPE, National Guard deployment, and disinfecting public facilities.
Public transit and transportation: The bill directs $30 billion to public transit, which nationally has seen a huge drop in ridership during the pandemic: $8 billion to airports, $3 billion to aerospace manufacturing for temporary payroll support, and $1.5 billion to Amtrak for payrolls and restoring daily long-distance service. It also puts $3 billion toward the Economic Development Administration, which provides grants to economically distressed communities, meant to help respond to economic harm done by the pandemic.
Ways and Means
Unemployment insurance: The bill provides an additional $400 in weekly unemployment benefits from the federal government through August 29, 2021. (The supplement is currently set at $300 and is set to expire on March 14.) It also extends the Pandemic Unemployment Assistance (PUA) program for the self-employed and contractors, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which tacks on extra weeks of state benefits, through August 29. This is one to watch — Biden proposed extending pandemic-related unemployment benefits through September. The bill also directs $2 billion to the Department of Labor to shore up unemployment systems.
Stimulus checks: After much debate about who will receive stimulus checks, the House bill would distribute a $1,400 benefit for those earning up to $75,000 and phasing out at $100,000 yearly income for individuals and $200,000 for couples. It also includes $1,400 for child and adult dependents, including college students and disabled adults (adult dependents have been excluded from previous stimulus payments).
Tax credits: The bill expands the child tax credit to $3,000 per child up to age 17 and $3,600 for children under age 6 for 2021, and it modifies the child and dependent care tax credit so that families can claim up to half of their related care expenses. It also enhances the earned income tax credit for people without children, reducing the minimum age to claim the credit from 25 to 19 and nearly tripling the maximum credit from $543 to $1,402.
Child care assistance programs: The bill increases funding for the Child Care Entitlement to States, which gives states funding for child care for low-income families, to over $3.5 billion per year and suspends the required state match on new funds for fiscal years 2021 and 2022.
Pensions: A top priority of Ways and Means Chair Richard Neal (D-MA), this portion of the bill would bail out multi-employer pension plans, which are pensions created through an agreement between at least two employers and a union. Neal estimates that about 10 million Americans are participants in multi-employer pension plans, and more than 1 million of them are participating in plans that are running out of money.
Obamacare premium subsidies. The bill increases the Affordable Care Act premium subsidies for two years for low- and middle-income Americans, or those making up to 400 percent of the federal poverty level. That would make health care through the ACA marketplace more affordable in 2021 and 2022. The bill also adjust subsidies for people who make more than 400 percent of the poverty level to make sure that nobody pays more than 8.5 percent of their income for coverage.
Amendments to the Paycheck Protection Program: The bill expands eligibility for the PPP for small businesses to include nonprofits (with certain restrictions) and to online-only news publishers (also with certain restrictions — they can have more than one physical location but can’t have more than 500 employees per location). It also puts an additional $7.25 billion toward the PPP, increasing the program level to $813.7 billion from $806.4 billion.
Funds for economic disaster loans: The bill directs $15 billion toward the Economic Injury Disaster Loan program for businesses impacted by the pandemic. It also puts $1.25 billion toward the SBA’s program for shuttered venue operators that was established in the December stimulus.
A restaurant revitalization fund: House Democrats are seeking to put $25 billion toward a new program at the Small Business Administration that would support restaurants, $5 billion of which will be set aside for businesses with under $500,000 in revenue in 2019. The restaurant industry has been particularly hard hit in the pandemic — the National Restaurant Association estimates industry losses in 2020 to be $240 billion.
Energy and Commerce
Vaccines, testing, and tracing: The bill directs $46 billion to the Department of Health and Human Services to detect, diagnose, trace, and monitor Covid-19. It also provides $7.5 billion in funding for the CDC to promote, monitor, and track Covid-19 vaccines, $1 billion for the CDC to strengthen confidence in the vaccine, and $5.2 billion to HHS to support more vaccine research and manufacturing. And it puts $500 million toward helping the CDC track Covid-19 hot spots and $750 million toward its efforts to combat Covid-19 around the world.
Money for the public health workforce: The bill allots $7.6 billion to HHS to shore up the public health workforce and an additional $100 million for the Medical Reserve Corps, a network of volunteers to support emergency response efforts.
Other public health investments: The proposal puts $7.6 billion into community health centers for coronavirus-related activities and $1.8 billion toward HHS for coronavirus tests, PPE, and vaccines for staff and people living in congregate settings. All in all, it puts $25 billion toward vulnerable populations and disparities in health care and access.
Tribal health programs: The bill puts $6 billion toward tribal health programs, including funds to support the Indian Health Service.
Mental health and substance abuse: The bill puts $3.5 billion toward block grant programs for mental health and substance abuse prevention and treatment as well as millions of dollars more toward other programs related to mental health and substance abuse.
Energy assistance: The bill directs $4.5 billion to HHS to help low-income people pay their energy and water bills.
Internet connectivity: The bill establishes a $7.6 billion Emergency Connectivity Fund to be enacted by the FCC to expand internet connectivity to students and teachers during the pandemic.
Defense Production Act spending: The bill puts $10 billion toward spending under the Defense Production Act, which lets the federal government make requests to private industries in times of emergency. The funds would help the president increase production of certain materials — namely, those needed to respond to the Covid-19 crisis, including PPE, vaccines, and tests.
Rental assistance: Democrats are aiming to put $25 billion toward emergency assistance to renters. Namely, they would put $19 billion toward the Treasury Department for rental and utility assistance to be allocated to states, territories, counties, and cities, and an additional $5 billion toward emergency housing choice vouchers for people at risk of homelessness, domestic violence survivors, and human trafficking victims to help them get stable housing. The bill also aims to put money toward people living on USDA-subsidized properties and toward programs helping Native Americans, Native Hawaiians, and Alaska Natives with housing.
Homelessness funding: The bill puts $5 billion in assistance to help communities provide shelter to the homeless.
Homeowner assistance: The bill would direct nearly $10 billion toward states, territories, and tribes to provide assistance to homeowners on fronts such as mortgage payments and property taxes.
Small business credits: The bill puts $10 billion toward the State Small Business Credit Initiative, which lawmakers say would support up to $100 billion in financing for small businesses through state, territorial, and tribal programs. Some funds will be directed specifically toward minority-owned businesses, businesses owned by those who are economically disadvantaged, and tribal government programs.
Support for the airline industry: The bill directs $15 billion toward a payroll support program established under the CARES Act that was supposed to help airline workers. This was not in Biden’s plan.
Food supply chains and agriculture: The bill puts an additional $3.6 billion toward the USDA for buying and distributing food and agricultural commodities and making grants and loans to farmers. It also provides $500 million in grants for rural health care and farm loan assistance for disadvantaged farmers and ranchers, including those who have historically been discriminated against by the USDA. And, it puts money toward US-led humanitarian food aid.
Increased SNAP benefits: The bill continues the 15 percent increase in Supplemental Nutrition Assistance Program (SNAP) benefits through September 30, 2021. It also directs funds toward technological improvements for the program.
Claims and appeals funding: The bill directs $272 million to the Department of Veterans Affairs to try to reduce the effects of Covid-19 on benefits claims and appeals backlogs for vets.
Veteran medical care and health needs: The bill puts $13.5 billion toward the VA for providing health care services and support to veterans, including those whose care has been delayed, become more expensive, or been otherwise affected by the pandemic.
Funding for state veterans homes: State veterans homes are facilities that provide care for veterans, whether nursing homes, at-home help, or adult day care. The bill puts funding toward them in two ways: $500 million for the VA to send money to states to upgrade and enhance homes, and $250 million in one-time emergency payments to support facilities.
Other VA funding: The bill directs $100 million toward the VA’s supply chain modernization efforts, $10 million for the VA’s inspector general’s office to conduct oversight, and almost $400 million for retraining assistance for veterans who lost their jobs because of Covid-19. It also allows the VA to waive copays for veterans, which is already in place, through September 30.
State, local, tribal, and territorial funding: The bill directs $350 billion total toward state, local, tribal, and territorial funding, split into 60 percent for states and 40 percent for localities. Nearly $200 billion would go to states and Washington, DC, with $25.5 billion equally divided and then an additional $169 billion divvied up according to the state’s share of unemployed workers. On the local government front, $130 billion would be divided between cities and counties. Of that amount, $65 billion would go to cities using a community development block grant formula, so that $45 billion would go to municipalities with populations of over 50,000 and nearly $10 billion would go to municipalities with populations of under 50,000. Then, $65 billion would go to counties based on populations. The bill directs $4.5 billion to territories and $20 billion to tribal governments.
State and local government funding has been a major sticking point for Republicans, and if Democrats are able to pass this through reconciliation, they can bypass GOP opposition.
Emergency leave for federal and postal workers: The bill directs $570 million in emergency paid leave for federal employees and postal workers.
Oversight money: The bill puts $117 million toward oversight entities — namely, the Government Accountability Office and the Pandemic Response and Accountability Committee — to oversee pandemic relief funds.
Democrats are trying to go fast and go big
Democrats have a deadline for passing the bill in mind, because they don’t want expanded unemployment insurance to dry up in mid-March. President Donald Trump waited until the very last minute to sign the $900 billion stimulus package into law in December, and that threw a wrench in benefits for many workers and screwed up the inner workings of unemployment administration in many states.
This time around, Democrats appear determined to get legislation done on time. In the Senate, that has entailed simultaneously dealing with Trump’s impeachment trial, which ended in acquittal on February 13, and getting Biden’s Cabinet nominees confirmed. In a press conference with Senate Democrats on February 9, Majority Leader Chuck Schumer insisted they could get it all done. “The bottom line is simple: the Senate is moving full steam ahead on a bold plan to get this country out of the crisis, to speed vaccination distribution, provide a lifeline to small businesses, help schools reopen safely, save the jobs of teachers, firefighters, and other public employees and so much more,” he said.
How this will eventually shake out is unclear. While it appears the White House at least initially wanted to try to get a bipartisan bill passed through regular order, it seems increasingly unlikely that the needed 10 Senate Republicans will go along, and the reconciliation process is moving ahead. What’s more, Democrats and Biden, well aware that the federal response to the Great Recession in 2009 was insufficient, appear determined to act aggressively on the economy this time around — whether or not many Republicans are along for the ride.
The trick, especially in the Senate, will be ensuring Democrats can stick together going forward, whatever the path.
Correction, February 19: A previous version of this story misstated Democrats’ estimate for how many workers would have their earnings increased with a $15 minimum wage.