Millions of Americans will receive direct payments from the federal government thanks to a $2 trillion federal funding package that was agreed to early Wednesday morning.
The bill, which could be signed by President Donald Trump later Wednesday, is in response to the coronavirus pandemic, which has shuttered non-life sustaining businesses nationwide and led to thousands if not hundreds of thousands of new unemployment claims.
Here are the details you need to know about when, and how much, you might receive.
When will the money go out?
According to CNN, relief may still be a couple of months away, as the outlet reports that checks or direct deposits might not go out until May.
“First, the IRS will have to calculate each person’s payment amount,’ CNN writes. “Then, it will need the correct direct deposit information or mailing addresses.
“To get the money to people who don’t usually file tax returns, it might have to request that information from the Social Security Administration or Veterans Affairs. In 2008, those people were required to file a return anyway in order to get their rebate.”
That, of course, will take time, and keep in mind that the IRS is still receiving tax filings, as well, even if the federal government and also Pennsylvania, among many other states, have pushed back the deadline to file.
For those looking for an optimistic timeline, mid-April seems to be the absolute earliest that checks could go out.
More: Pa. unemployment claims skyrocket to 540,000 since statewide coronavirus shutdown, shattering records
How much will I get?
Here is what the New York Times says:
“A $1,200 payment for each adult — and $500 per child — in households that earn up to $75,000 per year for individuals or $150,000 for couples. The assistance phases out for people who earn more.”
CNN has more details on what the phase-out threshold might look like.
“The payments would start to phase out for individuals with adjusted gross incomes of more than $75,000, and those making more than $99,000 would not qualify at all,” CNN writes. “The thresholds are doubled for couples.
“Qualifying income levels will be based on 2019 federal tax returns, if already filed, and otherwise on 2018 returns.”
What happened the last time this happened?
This package marks the third time since 2000 that the federal government has approved payments to citizens based on special circumstances.
As CNN notes, it took six weeks for checks to go out under a 2001 plan for tax rebates that were authorized by then-president George W. Bush. Checks during the ‘Great Recession’ of 2008 didn’t go out for three months, however.
Experts believe that an increase in electronic tax filing and the use of direct deposit for refunds could lead to expedited payments this time around, and those who have that set up are likely to receive their money faster than those who will be waiting on a check.
More: These central Pa. businesses are still open during the coronavirus pandemic
Where is the money coming from?
Syracuse.com has details:
“Taxes, essentially,” its Geoff Herbert writes.
“CNBC reports it’s unclear whether the money will be considered a loan or a gift, in which case some of it may have to be paid back.”
Why only one check?
Previous proposals that were discussed as the spread of COVID-19 continued to hurt the economy mentioned the possibility of two checks being sent out, but the agreement reached Wednesday calls for just one. It’s possible that a second round could go out, however, if schools and businesses must remain closed into the summer.
How will businesses be helped?
This part of the package is still being finalized, but Yahoo reports that the Small Business Administration will handle some requests while a new, still-to-be-named agency will handle others, likely for larger businesses and corporations. It was referred to as ‘a big credit facility’ by Pennsylvania senator Pat Toomey over the weekend.
“The facility will have two components: One will be administered by the Treasury Secretary with direct loans for a short list of “seriously distressed and absolutely essential companies,” likely including airlines,” Yahoo writes.
“The second component will be much bigger and be “a broad-based credit facility that will be available across categories, across sectors and industries.” Toomey said this program will give loans that will have to be repaid. “None of this is grant money,” he said.”
More of PennLive’s coronavirus coverage:
Why social distancing works, as demonstrated with Skittles
Pa. school districts prepare for possibility of students not returning to classrooms
Governors, still trying to flatten the coronavirus curve, balk at Trump’s Easter Sunday timeline
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PPP Bailout Money
Chinese firms got millions of PPP bailout money. The Paycheck Protection Program (PPP) provided relief for struggling small American businesses. With a $660 billion fund, help came to those who needed it, and it also arrived at some unintended recipients. Somehow, millions of dollars of forgivable loans went to Chinese-owned companies.
PPP Bailout Money | Chinese Firms Got Millions in Coronavirus
Consulting firm Horizon Advisory reviewed available PPP reports and found some interesting data. According to them, around 125 Chinese firms received between $192 to $419 million in PPP loans. The firms are either Chinese-owned or invested in Chinese financing. Among the borrowers were 32 companies that received more than $1 million each.
Small Business Relief
With a $2.2 trillion fund, the PPP provided loans to eligible firms during the pandemic. To qualify, firms must be small businesses with fewer than 500 employers. If they used 60% of the money for payroll, with some for rent and overhead, the loan becomes a grant instead. A program this big and well-funded will attract a lot of attention. Publicly traded firms applied and got approval for loans. As these companies got called out, many returned the money.
With the rules open for some interpretation, the PPP may have allowed some loopholes. Among the gaps was allowing American subsidies of foreign companies to apply.
Horizon Advisory co-founders Emily de La Bruyère and Nathan Picarsic noted the PPP’s lack of safeguards. They said that the “extent and nature of P.R.C.-owned, -invested and -connected entities among the P.P.P. loan recipients indicate that without appropriate policy guardrails, U.S. tax dollars intended for relief, recovery and growth of the U.S. economy — and small businesses in particular — risk supporting foreign competitors, namely China.”
Previously: PPP Recipients Revealed, 51 Million Jobs Saved
Companies that availed of the bailout include Continental Aerospace Technologies and Aviage Systems. Both are part of the Chinese military conglomerate Aviation Industry Corporation of China. CAT received $10 million in loans, while Aviage got $350,000.
HNA Group’s US subsidiaries HNA Group North America LLC and HNA Training Center NY got $1 million each. HNA Group is a Fortune Global 500 that deals in real estate, aviation, and financing.
Another one is BGI Americas Corporation, a subsidiary of China’s gene-testing BGI Group. When called out, BGIAC returned the money.
Biotech firm Dendreon Pharmaceuticals received a loan worth $5 million to $10 million. Its parent company, Nanjing Xinbai, is a state-invested company with ties to the CCP. These are the same organizations that President accuses of stealing intellectual property.
Mobile payment firm Citcon USA LLC received $150,000 to $350,000 in loan money. Its major investor, ZhenFund has ties to Alipay and WeChat, which are also targeted by Trump.
Fixing The PPP Bailout Money Loopholes
Horizon Advisory acknowledges that loans to Chinese companies saved American jobs. Butt, they also noted that these companies may have access to other sources of capital.
With the pandemic still wreaking havoc in the US, Congress is working on a second relief package. Republican lawmakers have submitted a provision that limits Chinese participation in future bailouts. Businesses owned in part or full by Chinese companies are not allowed to apply for loans. The same applies to companies with a Chinese resident on the board of directors.
Chinese companies receiving American tax dollars to continue operating on US soil? Companies owned by the same group of people accused by the President of stealing IP? The same country the President blames for the origin of the virus currently damaging the US? The irony is thick in this situation. The already shaky Sino-US relationship is facing yet another test.
Watch this video about the PPP Bailout Money:
Do you agree that PPP and other relief efforts should exclude Chinese companies? After all, they opened American offices and hired Americans during a global pandemic. Then again, they seem to operate under their own rules, and China is a US rival and competitor. Share what you think by leaving your comments below!
Moore: Republican’s Newest Stimulus Bill Has Fundamental Flaw
Stephen Moore says the Senate Republicans got most of the newest stimulus bill right but believes that it contains a “fundamental flaw” and President Trump shouldn’t sign it.
Moore, a member of President Trump’s economic recovery task force and an economist at FreedomWorks, says the plan put forward by Senate Majority Leader Mitch McConnell “isn’t half bad” and will help get the country back on track. He also says that we can “take solace in the fact that the price tag is “only” $1 trillion” compared to the HEROES ACT passed by Democrats and Speaker Nancy Pelosi that totalled a whopping $3 trillion.
Moore provided his thoughts on whether or not he sees a benefit from what he calls the “major planks” of the plan.
Another Round of $1,200 Stimulus Checks
Moore gives a “thumbs down” to this aspect of the bill. He believes it is counterproductive and rewards inactivity. He says “Dropping free money into people’s pockets is no road to prosperity. This isn’t a stimulus, it is a redistribution of money from producers to non-producers.”
Additional Funds For The Paycheck Protection Program
Moore says “let’s wait and see” how this plays out. It’s important that the government be repaid for these loans, and they don’t become forgivable grants, says Moore.
Unemployment benefits are reduced to $200 per week until states create their own plans that pay up to 70% of previous wages.
Letting the $600 per week unemployment benefits expire was “essential” says Moore, who gives this initiative a “thumbs up.” He says the CBO (Congressional Budget Office) found that five out of six workers were making more money staying unemployed than going back to work. He also points to a study by Casey Mulligan at the University of Chicago that found the additional unemployment benefits would reduce employment by almost 10 million jobs by the end of the year. Moore says “There is NO jobs recovery if this policy continues. No backing down.”
Liability Protection for Schools, Businesses, Churches, etc. As They Reopen
“Thumbs Up” says Moore. He says businesses that reopen need to be protected from frivolous lawsuits should someone get sick. Without liability protection, the Committee to Unleash Prosperity found that at least 500,000 jobs would be lost.
$100 Billion To Help Schools and Universities Reopen
Moore gives this a solid “thumbs down.” He says at the moment, most public schools have announced that they won’t be reopening in the fall, so what do they need the money for? “Any federal funding for schools this year and next should only be for schools that are open FULLTIME.”
Education Freedom Grants To Cover Scholarships For Private Schools and Payments To Parents For Homeschooling
“I feel like I’ve died and gone to heaven,” says Moore. He gives this a resounding “thumbs up.” He adds, “This will give potentially millions of parents, mostly with low incomes, a chance to send their kids to good schools this fall. Distance learning is a failure for at least half of the bottom half of children; they need in-class instruction.”
100% Deductibility For Business Meals and Entertainment
This gets a solid “thumbs down” from Moore. “What would a stimulus bill be without a few special interest giveaways to the corporate lobbyists?” he asks.
While Moore’s opinion of the bill is that they got it half right, he does point out what he believes is a fundamental flaw: a lack of a payroll tax cut through the rest of the year. He says it would help “150 million workers and nearly 30 million small businesses and self-employed business owners.”
Moore adds, “This would create up to 3 million jobs over the next six months and give a pay raise of 7.5 percent for every nurse, teacher, home care worker, construction worker, and police officer in America – the heroes of our economy.”
He worries that the bill that McConnell presented yesterday won’t survive negotiations with Democrats.
“All in all, a good bill. The problem is it will get much worse as Trump and McConnell begin to negotiate with Pelosi. There is not one single feature of the Pelosi bill that is positive for the economy,” says Moore.
His final thought is for the person who will eventually sign the bill into law.
“President Trump should not sign any final product without the payroll tax cut,” says Moore.
Republicans Ready With ‘Well Rounded’ Stimulus Bill
Treasury Secretary Steve Mnuchin said Republicans have finalized the latest stimulus bill. The newest plan adds up to about $1 trillion. Mnuchin also said they plan to introduce it today.
Appearing on Fox News Sunday, Mnuchin said, “We do have an entire plan. The [Trump] administration and the Senate Republicans are completely on the same page,” after delays prevented the plan from being completed last week. Senate Majority Leader Mitch McConnell said the White House wanted more time to “review the fine details.”
Many expect the proposal to include another round of $1,200 stimulus checks for Americans. It will also include liability protections for businesses and funding for schools as they reopen. Mnuchin said he hoped the proposal could gain bipartisan support in Congress.
“We can move very quickly with the Democrats on these issues. We’ve moved quickly before and I see no reason why we can’t move quickly again. And if there are issues that take longer, we’ll deal with those as well,” Mnuchin said.
On Unemployment Benefits
A sticking point with the Democrats could be the reduction in unemployment benefits. Many Republicans believe that the $600 weekly benefit is slowing the U.S. economic recovery since so many workers are making more money on unemployment insurance than they did on the job.
Instead of a $600 per week benefit, Republicans want the newest plan to include unemployment assistance that will replace roughly 70% of wages.
Mnuchin added that certain pieces of the legislation are a higher priority than other issues. These pieces include the likes of unemployment benefits and liability protection for businesses and schools. He said they can pass the legislation in parts and pieces to quicken the negotiating process.
“This will be the fifth set of legislation so there’s no reason why we can’t have number five, six and seven as we need to deal with issues,” he said. “And obviously, anything we do we need bipartisan support.”
The White House Reacts
White House Economic Advisor Larry Kudlow described the proposal as “a very well rounded package” and “a very well targeted package.”
“There’s a $1,200 check coming, that’s going to be part of the new package,” Kudlow said in an interview on CNN’s “State of the Union,” adding that the package will also include $16 billion in additional funding for testing and tax incentives to encourage companies to rehire employees.
“The check is there, the reemployment bonus is there. The retention bonus is there. There will be breaks, tax credits for small businesses and restaurants.” Kudlow added.
He also said the Trump administration is expected to lengthen the federal eviction moratorium. The moratorium prevented renters in buildings with mortgages backed by the government from being evicted.
Kudlow also added that the administration’s plan to cap unemployment benefits at approximately 70% of wages is “quite generous by any standard.” As recently as last week Republicans were considering the idea of extending the unemployment benefit but reducing it to $400 per month, or $100 a week, through the rest of the year.
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