Early this morning, the White House and Senate leaders reached an agreement on an unprecedented $2-trillion stimulus package to provide relief to Americans and spur economic activity amid the Coronavirus pandemic. The approved deal, which occurred just before 1:00 am was described as a “war-time level of investment for our nation” by Senate Majority Leader Mitch McConnell and “the largest rescue package in American history” by Senate Minority Leader Chuck Schumer. The Senate plans to vote this afternoon as they reconvene midday.
The full text of the stimulus package has not yet been released, but many elements of the proposal have emerged, with $250 billion set aside for direct payments to individuals and families, $350 billion in small business loans, $250 billion in unemployment insurance benefits, and $500 billion in loans to troubled companies. The package aims to expand unemployment benefits, provide a program for small businesses to help them continue to provide payroll to quarantined workers, and give many Americans a direct payment ($1,200 per adult earning up to $75,000 per year, $2,400 to married couples earning up to $150,000 per year, and $500 payments per child and completely phase out at income levels of $99,000 for singles and $198,000 for couples without children).
Furloughed workers would receive the typical amount the state pays for unemployment plus $600 per week in addition, covering even gig economy workers for the first time. Also included is an ‘employee retention tax credit’ that is estimated to provide $50 billion to companies that retain employees on payroll and cover at least 50 percent of the employee’s paycheck; the ability to defer the 6.2 percent Social Security payroll tax is covered under this relief measure as well.
Additional details are set to be released as this relief package is approved by the Senate and moves through the House of Representatives. KPM advisors will continue to monitor the situation and share updates as they become available.