First Look: New Corona Virus Relief Package
Emerging details on PPP round 2 and the 2nd coronavirus stimulus package.
Not-so-hot on the heels of March’s CARES Act, the second wave of economic relief has finally been agreed on by the powers that be. Although it has taken nine months of failed negotiations and mounting unrest of the general population, the second stimulus payout since the beginning of the coronavirus nightmare is finally on the way, although the fine details are still scarce. Even so, one thing we know for certain is that this second round of civilian payouts will be reduced from the already controversial $1200 per adult to a mere $600 per adult (and eligible child).
While the text of the legislation remains a mystery, many are simply happy that congressional leaders were finally able to reach a bipartisan agreement that would ultimately help millions of Americans who have suffered from the impact that the covid-19 pandemic has had on the United States economy. Unemployment may be trending down, but there are an estimated 10.7 million Americans currently without employment, which is still a whopping 4.9 million more than back in February before the pandemic took hold on our shores. Even worse news, around 8 million Americans have reached the poverty line -- and that’s only since June.
Needless to say, the second wave of economic stimulus has been long overdue, and there are some who would argue that it is absolutely not enough. Still, these are the cards we’ve been dealt, and with all of the election drama finally dying down a bit, it’s refreshing just to know that something is being done. This upcoming stimulus bill may not be as large as its $2 trillion predecessors, but it weighs in at nearly $900 billion.
Aside from the $600 per adult, a few other provisions have leaked to the public. For starters, there is supposed to be an extra $300 per week for unemployment benefits for a duration of at least 10 weeks. Temporary extensions of programs for expanded pandemic-era unemployment insurance eligibility will be granted, as 12 million people would find themselves without unemployment benefits should the current programs expire the day after Christmas.
As far as businesses go, a dedicated $284 billion is to be allocated towards the Paycheck Protection Program (PPP) for small businesses. The extension, while necessary, is a heavily scrutinized one after the first round’s blunders that took place. Research has shown that while PPP was introduced to help out small businesses, the true benefactors were the large corporations who netted more than half of the first $525 Billion of PPP loans.
Since pandemic lockdowns went into place, there have been over 100 thousand small businesses that have permanently ceased operations. Conversely, the major corporations have mostly been turning a profit since March. Luckily, there is a provision said to provide additional funding to the businesses that did not receive any PPP funds during the first round, with an added focus towards minority and women-owned businesses.
Businesses that did receive PPP funding the first time around can still qualify for round 2, but on the condition that they are able to show significant losses since 2019. Non-profits and News outlets will be eligible to receive PPP funding during this round, as they were overlooked during the first wave. What we’ve gathered so far also shows that the bill highlights a few more key areas that are to receive specified portions out of the $900 billion.
After proving to be a hot topic in recent months, live venues, cultural institutions, and independent movie theatres will receive $15 billion in funding out of the stimulus package. Another $25 billion will go towards rental assistance which will work in tandem with a moratorium on evictions for a yet unspecified time period. Other notable allotments include $45 billion towards transportation (with around $15 billion from that for airline payroll assistance) and $13 billion dedicated to Supplemental Nutrition Assistance Program (SNAP) benefits.
Schools and colleges are set to receive $82 billion along with expanded Pell Grants. More importantly, Hospitals are to receive an influx of funding as well, but as of now, the exact amount is still unclear. Even so, a dedicated $30 billion will go towards the procurement and distribution of the two covid-19 vaccines currently in circulation. Hopefully, the push towards national inoculation will eventually lead to a stronger and safer economic situation.
The new bill will also touch on one of the more obvious issues of the first round of PPP, the tax implications. With the first round of PPP, it was noted that expenses paid for through PPP funding would not be deductible, since PPP is a forgivable loan, thereby making the deductions amount to essentially taking double the money from Uncle Sam’s pocket. After an uproar from the business community, however, it looks as though this has been corrected for PPP round 2 and the expenses can, in fact, be deducted for tax purposes.
While it may not be as robust as the first round of government relief, this stimulus package is eagerly awaited by millions of people. President-elect Joe Biden has made comments that the package “is just the beginning” in terms of economic relief for the American people, but so far, it is the only thing on the table as far as the general public is aware. We may have quite a long wait before a round 3 is ever even considered, but in the meantime, the American people will at least have a little help to stay afloat during these trying times.
Who knows, if all goes well with the vaccine, maybe we won’t need a third stimulus package.