With Millions on the Edge, A Second Coronavirus Relief Package is still Uncertain
By Ivan Bao
The COVID-19 pandemic in the United States has shut down the economy, infected over 4 million citizens, and is threatening the economic security of more than 30 million Americans who have filed for unemployment insurance assistance since March. To make matters worse, the CARES Act passed by President Trump in March ended on July 31st, endangering the livelihoods of millions of Americans who have been receiving the $600-per-week check from the government. As economic recovery continues to lose momentum, it is uncertain when currently unemployed Americans — currently 10.2% of the population — can get back to work safely, and what a desperately needed second COVID-19 relief package will look like.
Even though all states in the U.S. initiated reopening procedures in April and May, the resurgence of COVID-19 in western and southern states, such as California and Florida, has forced state governors to consider pausing state reopening and even reversing momentum into a second state closure.
The ending of stimulus benefits not only affects individual Americans, who are experiencing growing pains from high rent prices, or struggling to pay for mortgages and food,but also businesses who have been severely hit by the pandemic. In a letter to top congressional leaders on August 3rd, more than 100 top executives of small and large companies alike stressed that, “small businesses are too critical to our country’s economic strength to let fail”, warning that retailers, consulting firms, and manufacturers and even restaurants “are facing a future of potential ruin” that will elongate the nation’s current economic downturn.1
While Congressional Republicans and Democrats both agree a new economic stimulus package will be vital in preventing the economy from dropping into a deeper recession, the two parties failed to compromise on the extent of the new coronavirus aid package before the July 31st deadline. On the one hand, congressional Democrats, such as Speaker of the House Nancy Pelosi, have firmly advocated for the passage of the HEROES Act, passed by the House of Representatives in May.
Major components included in the recovery plan are a second stimulus check of $1200 for qualifying individuals and dependents, an extension of federal $600 weekly payments to the unemployed, and an expanded Paycheck Protection Program to help businesses retain workers. Additionally, the HEROES Act will provide debt relief, an increase to SNAP benefits for those struggling with food, a 1-year extension to the eviction moratorium first provided by CARES, and over $1 trillion in aid for state and local governments in order to “pay vital workers like first responders, health workers, and teachers”, who are at increased risk of losing their jobs due to budget deficits.2
However, it was announced “dead on arrival” by Republicans in the Senate, who opposed the $3 trillion coronavirus package — even larger than the $2.2 trillion CARES Act — for being “unrealistic” and a “partisan offering” that included funds they believe are completely irrelevant to aiding those most affected by the pandemic. 3
The Republicans have taken more time in making a renewed COVID-19 aid plan, only announcing the HEALS Act on July 27th, mere days before the July 31st deadline. The biggest difference being the sheer size of the plan, the $1 trillion HEALS Act would provide unemployed Americans with $200-per-week federal payments that phase out by October, when states would then begin compensating the unemployed with 70% of their previous paychecks, up to a cap of $500. Additionally, the HEALS Act includes $1200 stimulus checks for those qualified but only $500 for dependents, and does not provide an extension to the eviction protections that officially ended as part of the CARES legislation. The HEALS Act also does not agree to provide states and local governments with additional funds to cover budget shortfalls, with Senate majority leader Mitch McConnell stressing that the HEALS Act is more targeted than the CARES Act, specifically “tailored to an economy that has one foot in the pandemic and one foot in the recovery.” 5 Regarding students, The HEALS legislation plan includes $105 billion of school funding — though more than the Democrats offer in their proposal — but only for schools and universities with plans to open for on-campus learning.
Currently, negotiations between the GOP and Democrats have been at a bitter standstill since the beginning of August, and were on the brink of failure on Friday as Congress remained fundamentally divided. For example, President Trump has accused the Democrats of deliberately providing “bailout money” 4 to certain democrat-run states, while Senate Republican McConnell urged the Democrats to put aside their “socialist manifesto” 6 and stop roadblocking negotiations. In response, House speaker Pelosi has criticized the Republicans of “having a disdain for working people”, with Senate minority leader Chuck Schumer blasting the Republican plan as “totally inadequate” and forcing jobless Americans to “take a 30 percent pay cut”.5
To break the stalemate, President Trump, who had previously been vocal about taking matters into his own hands, signed four executive orders on Saturday, August 8th, which would extend but reduce federal employment checks to $400 week, 25% of which would be covered by states. However, it was not clear if President Trump has the power to move unilaterally to extend unemployment assistance and redirect federal relief money since Congress controls federal spending. Additionally, Democrats such as Pelosi and Schumer criticized his actions, calling his plans “meager” and claiming Trump “still does not comprehend the seriousness or the urgency of the health and economic crises facing working families.”,6 citing among other things that the President’s broad strokes failed to actually extend the eviction moratorium or provide rental assistance to the 30–40 million Americans who may be at risk for eviction (15).7
While it is appallingly unclear if President Trump’s executive orders will survive Congressional opposition and how soon Democrats and Republicans can meet what would seem a colossal compromise, the fact remains that millions of Americans still desperately need relief amidst a dangerous and ongoing health crisis, which cannot be solved by partisanship and deadlock.
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FOOTER:
1 Schlosser, Kurt. “Howard Schults and more than 100 CEOS urge Congress Congress to save small businesses with relief bill.” Geek Wire, August 3rd, 2020,
2 Bill Fay. “Details on the HEROES Act” Debt.org, July 21st, 2020,
https://www.debt.org/2020/07/21/heroes-act/
3 “HEROES Act.” Wikipedia, Wikimedia Foundation, 13 Aug. 2020, en.wikipedia.org/wiki/HEROES_Act.
4 Haberman, Cochrane, & Tankersley. “With Jobless Aid Expired, Trump Sidelines Himself in Stimulus Talks.” The New York Times, August 3rd, 2020,
https://www.nytimes.com/2020/08/03/us/politics/congress-jobless-aid-talks-trump.html
5 Philips, Morgan. “McConnell unveils ‘HEALS Act’, the GOP coronavirus stimulus proposal” Fox News, July 27th, 2020,
https://www.foxnews.com/politics/mcconnell-unveils-heals-act-gop-coronavirus-relief-bill
6 Thomas, Elizabeth & Faulders, Katherine. “Trump signs 4 executive actions on coronavirus relief.” ABC News, August 8th, 2020,
https://abcnews.go.com/Politics/trump-sign-executive-orders-coronavirus-relief/story?id=72257640
7 Brown, Shelby. “5 reasons we think there could still be a stimulus package”. CNET, August 12, 2020, https://www.cnet.com/personal-finance/will-there-still-be-a-new-stimulus-package-its-possible-heres-why/
