Source : https://www.cnet.com/personal-finance/stimulus-package-if-it-happens-youll-get-far-more-than-just-a-second-check-the-update-today/
How the different parts of a new stimulus bill could help you through the economic crisis, if negotiators can settle on a deal.
While President Donald Trump looked to step over the stalled talks by signing the three memoranda and one executive order on Saturday, he left untouched much of what White House and Democratic negotiators hoped to accomplish with the next stimulus bill, leaving it to the two sides to find a path forward.
“There is still a lot of things that we need to do and that we’ve agreed on,” said Treasury Secretary Steven Mnuchin on Monday.
While one of the areas of overlap is a second stimulus check, Democrats and Republicans still have before them hot-button topics including an extension of payroll protection, a working moratorium on evictions, tax credits for businesses to to keep workers on the payroll, another look at enhanced unemployment benefits and more.
Here are the main benefits that could directly affect you, and how likely they’ll become part of a final relief package, if there is one. And here’s how the proposed HEALS and Heroes acts differ from the CARES Act that passed in March. We update this story frequently.
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Second stimulus check aims to increase spending
What it is: A payment sent to qualifying individuals and families, based on annual income, age, number of dependents and other factors. The first stimulus checks authorized under the CARES Act have gone out to over 160 million Americans — as a check, as a prepaid credit card or through direct deposit. But there have been problems and after three months, some are still waiting for their stimulus payment.
How it could help you: The payment isn’t taxable and you can use it however you want — to pay for food, housing, clothing and so on. The idea is that spending the checks will help the economy recover faster.
Why we think a second check will pass: The CARES Act authorized payments of up to $1,200 per eligible adult and so does the HEALS Act. The House of Representatives’ Heroes Act, meanwhile, called for $1,200 stimulus checks, but for more people. The White House supports another round of checks, which makes this a likely part of the final bill.
More unemployment benefits for people out of work
What it is: An additional weekly check for people who applied for unemployment for the first time or were already collecting unemployment. The program initially granted by the CARES Act provided an extra $600 per week and officially expired on July 31, but lawmakers are looking into another unemployment boost now.
How it could help you: An extra weekly payment on top of the ordinary unemployment benefit gives individuals and families a leg up. Cutting it off or reducing it could be devastating for unemployed workers and the economy.
What Trump’s memorandum brings: It seeks to create a program to provide $400 per week, with a (retroactive) start date of to Aug. 1, ending when the program reaches “$25 billion or for weeks of unemployment ending not later than December 6, 2020, whichever occurs first.” The plan requires states picking up some of the cost, and some governors say the administration’s plan doesn’t go far enough.
Where negotiations stood before: Republicans support the extension, but at a reduced rate. Democrats support an extension of the current $600 rate and have balked at the Senate proposal, which would extend benefits based on 70% to 75% of lost wages, starting at $200 a week and over time increasing to $500 a week, with state assistance. The benefits expired without a short-term extension in place.
An eviction moratorium is still up in the air
What it is: This plan would help renters pay rent and assist landlords with expenses with less rent money coming in, especially as the US faces a potential evictions and housing crisis that could cause up to 40 million people to lose their homes. That’s about 12% of the US population.
How it could help you: The rental assistance program would temporarily help you pay rent if you qualify, put a hold on evictions for a year and help cover the costs of rental property owners because of rental payment shortfalls. The earlier protections have lapsed.
Where it stands now: Trump’s executive order included a commitment to look into renewing the eviction moratorium, but there’s been no direct action taken yet.
“The Secretary of Housing and Urban Development shall take action, as appropriate and consistent with applicable law, to promote the ability of renters and homeowners to avoid eviction or foreclosure resulting from financial hardships caused by COVID-19,” the executive order reads.
“It’s less of an executive order and more of an “executive suggestion,” Chuck Schumer, Senator for New York, tweeted on Monday.
Eviction protection wasn’t part of the Senate proposal, but has been a topic Trump has pushed for inclusion. As with unemployment insurance, Congress had initially looked to extend this separately while it works on the final bill.
Payroll Protection Program to encourage businesses to hold onto employees
What it is: Intended to help you retain your job, the Paycheck Protection Program provides forgivable loans to small businesses as an incentive to keep employees on the payroll.
How it could help you: The PPP is designed to fund employed workers who would otherwise have lost their jobs during the pandemic. The program got off to a rocky start, and it’s not clear the PPP met the goals Congress set for it.
“Overall PPP hasn’t preserved many paychecks,” Joshua Gotbaum, a guest scholar of economic studies at the Brookings Institution, wrote in July. “A careful study found that PPP-eligible small businesses laid people off just as quickly as other businesses,” he said.
Why we think it could get extended: The Republican proposal will target the hardest-hit small businesses, Sen. Susan Collins of Maine said during the rollout of the bill. That includes those with revenue losses of 50% or more over last year.
Employee retention tax credit could help pay workers
What it is: Under the program, an employer can receive refundable tax credits for wages paid to an employee during the pandemic. The employer can then use the credits to subtract from — and even receive a refund over — taxes they owe.
How it could help you: Again, it’s not a direct payment to you, but the program encourages businesses to keep workers on the payroll.
Why we think it could happen: The HEALS Act includes further tax relief for businesses that hire and rehire workers and the Democratic-backed Heroes Act also builds on the tax credits that were part of the initial CARES Act. And there’s additional bipartisan support besides.
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Return-to-work payment of as much as $450 per week
What it is: A temporary weekly bonus for unemployed workers who secure a new job or are rehired, on top of their wages. As proposed by Sen. Rob Portman, a Republican from Ohio, the bonus would be $450 a week.
How it could help you: Under Portman’s plan, the weekly bonus would go to laid-off workers who return to work.
Why we think it may not happen: The White House in May expressed interest in the bonus and Portman continues to support the idea, but it’s not part of the proposal Senate Majority Leader Mitch McConnell and the other Republican senators presented last week.
Trump’s payroll tax cut could put more money in your bank this year
What it is: Trump has for months pushed the idea of including temporary payroll tax cuts in the next stimulus package. The executive order Trump signed includes deferring certain taxes retroactively from Aug. 1, through December 2020 for people earning less than $100,000.
How it could help you: If you have a job, a payroll tax cut would let you keep more of your earnings each check. The plan would not help those who are unemployed and don’t receive a paycheck. The 32 million people who were claiming unemployment insurance as of July 18 wouldn’t benefit. Workers would still need to repay those taxes the following year, the New York Times reported.
Will it stick? Trump signed a memorandum Aug. 8 to make the payroll tax cut law, but it isn’t clear if he has the legal right to do so. Typically, financial decisions like tax cuts are authorized by congressional vote, not a presidential order. We’ll have to wait and see if legal action is brought against the order. Neither the proposed Heroes Act nor the Senate plan includes a payroll tax cut.
Until we know for sure what the finalized stimulus bill will bring, there are some resources to help you through the financial crisis. We look at coronavirus hardship loans and unemployment insurance; what you can do if you’ve lost your job; what to know about evictions and late car payments; how to take control of your budget; and if you could receive two refund checks from the IRS.
Julie Snyder contributed to this story.
First published on July 24, 2020 at 5:23 a.m. PT.