(Mar 27): Days of negotiations between the Trump administration and Congress — and fierce lobbying by industries eager for assistance dealing with the coronavirus outbreak — has yielded a rescue package worth more than US$2 trillion ($2.9 trillion) in spending and tax breaks. It was passed by the US Senate late last Wednesday.
Here are some of the winners and losers:
More aid for companies
The plan would include about US$500 billion in loans and assistance for larger companies, as well as states and cities, according to the latest drafts being circulated. But the aid comes with strings attached after pressure from Democrats.
Companies receiving a government loan would be subject to a ban on stock buybacks through the term of the loan plus one additional year. They also would have to limit executive bonuses and take steps to protect workers. The Treasury Department would have to disclose the terms of loans or other aid, and a new Treasury inspector general would oversee the lending program.
The bill is largely a win for the retail, hotel and restaurant industries that initially viewed lawmakers as favouring the airline industry.
Trade groups representing those sectors lobbied Congress hard for loans, grants and unemployment assistance because their businesses have also suffered coronavirus-related revenue losses.
Airlines
Struggling US airlines would be eligible to receive federal loans and direct cash assistance if they are willing to give an option for an ownership stake to the government.
The programme allocates US$25 billion to passenger carriers and US$3 billion to airline contractors providing ground staff such as caterers, while cargo haulers would see US$4 billion.
The addition of direct cash relief — earmarked specifically for payrolls — was sought by airline and industry unions, which feared massive job losses if loans were the only option.
Other transportation winners include rail and transit operators. Amtrak would get US$1.02 billion to cover coronavirus-related revenue losses and support state-funded routes. State and local transit agencies would get US$25 billion for operating and capital expenses.
Small businesses
The bill carves out more than US$350 billion in aid for small businesses, much of which would be in loans through the Small Business Administration and banks, guaranteed by the federal government. The loans would be forgiven provided the businesses meet certain requirements, including limiting reductions in pay and layoffs, though with more flexibility for employers than the original Senate bill.
Industry advocates previously said loans were not enough, especially for the smallest outfits, although some expressed more optimism on Wednesday.
Citizens and gig workers
The package would provide direct payments to lower- and middle-income Americans of US$1,200 for each adult, as well as US$500 for each child.
Democrats were able to secure a change from a previous version that allows low-income taxpayers to get the full US$1,200 payment. The initial plan would have given smaller checks, or in some cases, no money at all, to very-low income people.
Unemployment insurance payments were bolstered and recipients would be eligible to receive those funds for an average of four months, up from three in the prior GOP plan. It also would extend eligibility to the self-employed and workers in the gig economy.
Hospitals
The legislation calls for US$117 billion for hospitals and veterans’ healthcare, as well as US$16 billion for personal protective equipment, ventilators and other medical supplies for federal and state response efforts. It also includes US$11 billion for vaccines, therapeutics, diagnostics and other medical needs, and at least US$250 million to improve the capacity of healthcare facilities to respond to medical events, according to a summary by the Senate Appropriations Committee.
The bill would require insurers to cover tests for Covid-19. Labs would be required to post cash prices for the tests on public websites, and insurers would have to pay those prices or another privately negotiated rate. Any vaccines or other preventive services would have to be covered with no cost-sharing.
The measure would temporarily lift Medicare payment cuts and includes a 20% increase in Medicare payments to hospitals for treating Covid-19 patients.
Home loan borrowers
Many US homeowners and businesses hit hard by coronavirus could get relief from making their monthly mortgage payments through the bill.
Borrowers with loans insured by government agencies such as the Federal Housing Administration and the Department of Veterans Affairs would be eligible for forbearance.
Consumers whose mortgages are backed by Fannie Mae and Freddie Mac would also be eligible to skip payments.
US regulators have already mandated forbearance to borrowers facing financial hardships due to coronavirus, in addition to suspending foreclosures and evictions through the end of April and in some cases longer.
Emergency aid for farmers
The stimulus package includes up to US$23.5 billion in farm aid. It would provide US$9.5 billion in emergency funds for agriculture, including livestock producers and growers of specialty crops such as fruits and vegetables. And it would authorise US$14 billion in new borrowing authority for the US Agriculture Department’s Commodity Credit Corp., a Depression-era entity the Trump administration has used for its farm-bailout programs the past two years.
State and local governments
A coronavirus relief fund with US$150 billion would be created for states, cities and other local governments. Additional funds will be set aside for territories, tribal governments and other entities.
The package includes US$400 million for the Election Assistance Commission to provide grants in response to the coronavirus outbreak. The funds could be used to expand voting by mail, early voting and online registration and bolster in-person voting, according to a Senate aide.
No aid for Trump properties
Democrats won language that would bar any business owned by President Donald Trump or his family from getting loans from Treasury. Businesses owned by members of Congress, heads of executive departments and Vice President Mike Pence also would be blocked from receiving aid under the stimulus programme.
Oil industry
A US$3 billion provision in the original GOP bill to buy oil for the nation’s Strategic Petroleum Reserve was cut by negotiators. The funding for the emergency stockpiles had been requested by the Trump administration for the purchase of up to 77 million barrels of crude oil to support the domestic industry and boost reserves at cheap prices.
The measure disappointed renewable advocates, who are seeking more flexibility to claim existing credits as project timelines slip. Abigail Ross Hopper, head of the Solar Energy Industries Association, said that half of the industry’s jobs are at risk as a result of the pandemic.
