WASHINGTON–A firmer picture is emerging of the kinds of checks the federal government will be sending to many Americans as part of the response to the outbreak of coronavirus across the country. In related news, HUD and the FHFA said they will suspend all home foreclosures thorugh the end of April.
As CUToday.info reported, proposals ranging from $1,000 checks to more than $2,000 to be sent to Americans have been put forward by the Trump Administration and members of Congress.
Separately, the Senate is scheduled to vote today on a package of coronavirus-related relief legislation that has already passed the House. That legislation includes provisions for paid emergency leave and free testing for COVID-19.
The latest proposal included in an emergency stimulus package would send two $1,000 checks to many Americans and also provide $300 billion towards helping small businesses avoid mass layoffs, according to a Treasury Department fact sheet.
The plan would seek to put $500 billion towards the cash payments to individual Americans, with no payment to people over a certain level. An earlier proposal said the payments would be limited to adults and children in families earning below $90,000 (for singles) and $180,000 for couples.
The lastest Treasury Department outline says the funds would be paid out in two equal amounts, beginning on April 6 and then again on May 18.
“Payment amounts would be fixed and tiered based on income level and family size,” the Treasury letter said, according to the Washington Post.
Those numbers remain fluid, and some in Congress have expressed concerns over the growing size of what may be a rescue plan with a price tag of more than $1 trillion.
In addition, Sen. Chuck Schumer (D-NY) was critical of the proposal to send $1,000 checks to Americans.
"The coronavirus is slowing our economy to a near standstill and we are almost certainly anticipating a recession," Schumer said in a speech on the Senate floor. He added that expanded unemployment benefits would be a more effective way of helping workers than a $1,000 check from Washington.
Bill Heads to Senate
The House-passed legislation to be considered by the Senate today includes revised language would still provide many workers with up to two weeks of paid sick leave if they are being tested or treated for coronavirus or have been diagnosed with it. Also eligible would be those who have been told by a doctor or government official to stay home because of exposure or symptoms, according to CNN.
Under the revised bill, however, those payments would be capped at $511 a day, roughly what someone making $133,000 earns annually. The original measure called for workers to receive their full pay but limited federal reimbursement to employers to that amount.
Workers with family members affected by coronavirus and those whose children's schools have closed would still receive up to two-thirds of their pay, though that benefit would now be limited to $200 a day.
Other Stimulus Proposals
Other pieces of the stimulus package being debated include:
- A $50-billion “airline industry secured lending facility” that would allow the federal government to make direct loans to “U.S. passenger and cargo air carriers.” Treasury would determine the interest rates and other terms of any loans, but they would include limits “on increases in executive compensation until repayment of the loans,” the Washington Post said.
- A plan to temporarily backstop money market mutual funds, a sign that government officials are worried that an investor panic could lead to a run on these funds, the report stated, adding, “a similar structure was used during the Great Recession, but lawmakers had sought to block its future use.”
- $150 billion to prop up other business sectors, which could include hotels, among others. “Some Democrats have raised concerns about how these funds might be used and have called for putting restrictions on firms that receive emergency assistance to assure that employees aren’t laid off while executives pocket large bonuses,” the Post said.
- $300 billion for small businesses in the plan would be to help firms continue paying employees. Treasury has proposed “Small Business Interruption Loans,” would come with a 100% government guarantee. Eligible borrowers would have 500 or fewer employees, and the loan amounts would be targeted to finance six weeks of payroll, capped at $1,540 per week per employee. The loans would come from U.S. financial companies but would have U.S. government backing, according to the Treasury proposal.
No Foreclosures
Meanwhile, the Department of Housing and Urban Development and the Federal Housing Finance Board said they will suspend all home foreclosures and evictions to the end of April amid the coronavirus outbreak.
In response to the announcement, CFPB Director Kathleen L. Kraninger issued a statement, saying, “The actions taken today by HUD and FHFA are timely and an important step in providing assurance to consumers. I commend my colleagues at HUD and FHFA for being proactive on this issue and providing Americans with much needed peace of mind during this uncertain time.
“Earlier this month, the Bureau, along with our federal and state partners, encouraged financial institutions to work with their customers affected by the coronavirus,” Kraninger continued. “Consumers’ first stop in the face of hardship is with their creditors and their financial institutions, so our message was important for regulated entities to hear. I will continue to work with our Federal and State partners, and seek feedback from stakeholders, to ensure we are providing appropriate flexibilities to benefit consumers during this time.”
Support for CFPB Position
CUNA issued a statement saying it is supportive of the CFPB’s position and sent a letter Kraninger following up on yesterday’s call regarding COVID-19 issues and outlining several regulatory recommendations.