Late last night the Senate, in a unanimous 96 – 0 vote, passed a $2 trillion dollar stimulus bill. This came after several days of stalling by Democrats who wanted to add provisions that had more to do with the Democrat agenda than the current crisis. 

I looked at the bill summary and here are the key provisions. 

• Unemployment Provisions
  • Reduces the unemployment insurance cost by 50% for non-profit and government agencies
  • Adds $600 per week to unemployment payments through July 31. (See the proposed Sasse Amendment below) This is taxable but does not count toward calculating Medicaid or CHIP eligibility. It is not counted toward an employer’s state unemployment tax calculation. 
  • Allows state agencies to quickly hire workers to process unemployment claims – cutting red tape to get money to workers
  • Automatically adds 13 weeks to individuals drawing unemployment now or who have exhausted unemployment. This provision expires on December 31, 2020.
  • Grants to states to implement or improve short-time compensation programs. 

• Individual Provisions
  • Recovery Rebate of $1,200 per person and $500 per child paid by direct deposit to individuals with incomes under $75,000 per person, $122,500 single head of household with children, $150,000 filing jointly. Reduction by 5% of income above the threshholds.
  • Waives the 10% penalty for early withdrawals from IRA’s up to $100,000 for individuals impacted by the Coronavirus. Withdrawals may be taken between Jan 1 and Dec 31, 2020. Any withdrawals for this purpose may be recontributed later. Employers are allowed to add provisions to allow loans from retirement plan savings plans. 
  • Waives the minimum withdrawal requirements for 2020 for individuals who fall under the minimum withdrawal provisions (generally those who turned 70 1/2 in 2019).
  • Allows for up to $300 charitable deduction without having to itemize and increases the limit of charitable deductions for those who file itemized returns from 60% of income to 100%. 
  • Allows employers to take as a business expense student loan payments made on behalf of an employee in employer sponsored educational assistance programs through January 1, 2021.

• Business Provisions
  • Employee Retention Credit, as a refundable tax credit of 50% of wages for employers, including non-profits, who have been impacted by the Coronovirus crisis. This applies to business who were fully or partially suspended by government order and to employers who see a reduction in revenues of over 50% in quarterly receipts measured on a year over year basis. 
  • For employees with 100 or fewer employees, all wages are eligible for all employees regardless of whether or not employee is furloughed. The credit is for wages and benefits up to the first $10,000. Calculated wages do not include those taken into account for required paid family leave or sick leave. 
  • Payroll taxes are deferred with 2020 payroll taxes being due in two installments – one at the end of 2021 and one at 2022. 
  • Several other provisions regarding net operating losses, suspending taxes on alcohol distilled for purposes such as hand sanitizer.

• Health System Provisions
  • Department of Treasury authorized to provide advance payment of tax credits to certain private sector employers who are required to provide for up to 12 weeks of sick leave to employees.
  • Delays required payments to single employer pension plans to the end of 2020. 
  • Minimum funding rules for certain charities providing medical care and assistance to to mothers and children would be modified for more flexibility. 
  • Telehealth and remote services may be used in Health Savings Account (HSA) plans with no deductible in 2020 and 2021. Allows for use of HSA for tax free reimbursement for feminine hygiene products.

• Severely Distressed Sectors – Suspends aviation excise taxes through January 1, 2021.

• Coronavirus Relief Funds – Provides $150 billion to states for expenditures related to the Coronavirus outbreak.

Republican Senator Ben Sasse of Nebraska offered an amendment to limit the unemployment to no more than the current wages. His concerns which were shared by other Republicans is that the flat $600 per week could create situation where a person could actually receive more money by being unemployed than by working. His amendment failed to get the necessary 60 votes to end debate. 

South Carolina Republican Senator Tim Scott on Fox and Friends this morning expressed the same concerns that this bill will actually encourage layoffs. Host Steve Doocy pointed out Treasury Secretary Mnuchin understood the concerns but said out that many states are not set up to make the necessary calculations. 

Mnuchin told the Senators that getting out a flat amount of $600 was faster than the reprogramming delays that would hurt the employees they were trying to help. Senator Scott said the he joined the other Senators in the unanimous decision, “because the good in the bill outweighed the bad.” 

There were provisions in the bill that had nothing to do with the Coronavirus. The Kennedy Center got $25 million. The House of Representatives also gets $25 million for salary and expenses. 

Now the bill goes to the House and they are expected to vote on it tomorrow. I wrote Congressman Bishop a brief, and I think encouraging, e-mail asking that he exhort his colleagues to quickly pass it and send it to the President who is waiting to sign it as soon as it hits his desk. 

I am praying for our elected officials, and support them in this critical time. This virus is no respecter of persons or political parties. I believe that Congressman Bishop will do the right thing in this case.

Below is the message I sent to Congressman Bishop yesterday.

“The Senate has come to an agreement and should formally vote today (March 25, 2020) on the relief package for America. Speaker Pelosi had a laundry list of unrelated matters but the Senate came to a reasonable compromise that addressed the specific need. Please vote quickly on the Senate package. I see no value in making any change to the Senate bill as even adding a comma would require it to go back to the Senate. Every hour is critical to our economy. We have a focused bill, please exhort Speaker Pelosi and colleagues to quickly pass this and get it to the President for signature.”

Thank you for taking the time to read this e-mail. I hope that it is helpful in your understanding of how Congress is responding. This is a crisis and everyone understands it. 

Sincerely, 

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