WASHINGTON–A deal has been reached between the White House and leaders of the Senate over the most expensive piece of legislation in U.S. history that will send checks directly to many credit union members and provide assistance to a significant number of small business owners, among other provisions.
What is now expected to be a more than $2-trillion package—which analysts have noted is approximately 10% of U.S. GDP–was agreed to around 1 a.m. ET on Wednesday morning after long negotiations between Republicans and Democrats in the Senate. A vote in the Senate is expected later today.
The Coronavirus Aid, Relief and Economic Security Act (CARES Act, S.3548) is aimed at providing relief to businesses of all sizes as well as many working Americans in response to the economic shutdown stemming from the coronavirus pandemic. Sen. Majority Leader Mitch McConnell (R-KY) called the bill a “war-time level of investment for our nation.”
Details of the bill have yet to be released, but broadly those familiar with the provisions told CNN it includes $250 billion for direct payments to individuals and families, $350 billion in small business loans, $250 billion in unemployment insurance benefits and $500 billion in loans for distressed companies.
Debated Provisions
Among the details in the CARES Act that will be of keen interest to credit unions is the fate of a number of provisions that were proposed, primarily by Democrats, during negotiations. Those provisions could include:
- Allowing taxpayers to make early withdrawals from their retirement funds without having to pay the usual 10% penalty during the coronavirus crisis, and required minimum withdrawals would be suspended for 2020.
- Giving companies credits against payroll taxes for giving employees any kind of sick or family medical leave, not just for coronavirus-related reasons.
- Proposals to force lenders to grant a temporary reprieve from mortgage and car payments and credit card bills; to require the Federal Reserve to provide loan servicers with liquidity to allow borrowers to stop paying their mortgages for up to 360 days; a reprieve for public housing residents on paying rent; $10,000 in student loan forgiveness, and more
- A proposal that would keep consumers from paying “unnecessary bank fees,” including overdraft fees
Payments to Americans
Meanwhile, it is believed that under the plan individuals who earn $75,000 in adjusted gross income or less would get direct payments of $1,200 each, with married couples earning up to $150,000 receiving $2,400 -- and an additional $500 per each child. The payment would scale down by income, phasing out entirely at $99,000 for singles and $198,000 for couples without children.
The bill also reportedly has a provision that would block President Donald Trump and his family, as well as other top government officials and members of Congress, from getting loans or investments from Treasury programs in the stimulus, Minority Leader Chuck Schumer's (D-NY) office told CNN.
As CUToday.info reported earlier, there has been strong partisan disagreement related to oversight of the $500 billion that is to go to distressed companies, including $50 billion in loans for passenger air carriers. Initially, the Treasury Department was to be responsible for overseeing the funds. The new bill now includes an oversight board and the creation of an inspector general position to review how the money is spent, the New York Times reported.
The bill also states the Small Business Administration could serve as a guarantor for loans of up to $10 billion for small businesses to ensure they can maintain their payrolls and pay off their debts.
Questions in the House
In addition, there are new protections and funds for those out of work, with Schumer saying the bill has "unemployment insurance on steroids."
There remain, of course, some complications, including how at least five members of the Senate in quarantine due to the coronavirus will vote on the bill, and whether the House will need to return to Washington in order to vote on the package. Speaker of the House Nancy Pelosi (D-CA) said she is hopeful of a vote by unanimous consent, but that leaves open the possibility any one member could block the move.
CUToday.info will provide ongoing updates on the legislation and its provisions as they become available.