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Senate Approves $2 Trillion Stimulus After Bipartisan Deal
The $2 trillion economic stabilization package agreed to by Congress and the Trump administration early Wednesday morning is the largest of its kind in modern American history, intended to respond to the coronavirus pandemic and provide direct payments and jobless benefits for individuals, money for states and a huge bailout fund for businesses.
The measure, which the Senate approved unanimously just before midnight on Wednesday, amounts to a government aid plan unprecedented in its sheer scope and size, touching on every facet of American life with the goal of salvaging and ultimately reviving a battered economy.
Its cost is hundreds of billions of dollars more than Congress provides for the entire United States federal budget for a single year, outside of social safety net programs. Administration officials said they hoped that its effect on a battered economy would be exponentially greater, as much as $4 trillion.
The legislation would send direct payments of $1,200 to millions of Americans, including those earning up to $75,000, and an additional $500 per child. It would substantially expand jobless aid, providing an additional 13 weeks and a four-month enhancement of benefits, and would extend the payments for the first time to freelancers and gig workers.
The measure would also offer $377 billion in federally guaranteed loans to small businesses and establish a $500 billion government lending program for distressed companies reeling from the impact of the crisis, including allowing the administration the ability to take equity stakes in airlines that received aid to help compensate taxpayers. It would also send $100 billion to hospitals on the front lines of the pandemic.
"This is certainly, in terms of dollars, by far and away the biggest ever, ever done," President Trump said at the White House, where he veered from his usual partisan vitriol and praised Democrats for their work on the agreement. "That is a tremendous thing because a lot of this money goes to jobs, jobs, jobs -- and families, families, families."
The deal is the product of a marathon set of negotiations among Senate Republicans, Democrats and Mr. Trump's team that nearly fell apart as Democrats insisted on stronger worker protections, more funds for hospitals and state governments, and tougher oversight over new loan programs intended to bail out distressed businesses.
Anticipation of the vote sent the markets higher for the second consecutive day, with the S&P 500 up a little more than 1 percent. But investors appeared to grow jittery toward the end of trading as a group of Republican senators delayed a final vote over concerns that the jobless aid was so generous that it could lead to layoffs and discourage people from working.
The last-minute snag revealed the tenuous nature of the bipartisan compromise that was at the core of the measure, which emerged from an extraordinary five-day stretch of intense negotiations between lawmakers and White House officials over how to deliver critical financial support to businesses forced to shut their doors, American families and hospitals overwhelmed by the spread of the novel coronavirus. It has already killed more than 900 people and infected more than 68,000 in the United States.
The perils of the pandemic, which by Wednesday had spread within the marble halls of the Capitol to infect lawmakers themselves, prompted Republicans to put aside their usual antipathy for big government and spearhead an effort to send cash to American families, while agreeing to astonishingly large additions to the social safety net. Democrats, for their part, dropped their routine opposition to showering tax cuts and other benefits on big corporations -- all in the interest of getting a deal.
And even as they prepared to approve it, lawmakers were already discussing the likelihood that they would soon have to consider yet another package to respond to the pandemic and the toll it was taking on the United States.
The stimulus package was intended to encourage companies to keep employees on their payrolls even if their businesses have shuttered temporarily -- and it increases aid to workers who are laid off anyway or have had their hours and wages cut back.
Though the bill is more than double the size of the roughly $800 billion stimulus package that Congress passed in 2009 to ease the Great Recession, analysts and economists warned it may provide only a few months of financial relief given the unknown breadth of the pandemic's reach. With lawmakers besieged by an array of lobbyists and special-interest groups, not to mention constituents and businesses desperate for relief, the package more than doubled in size since Senator Mitch McConnell, Republican of Kentucky and the majority leader, first introduced legislation last Thursday.
"This is not a moment of celebration, but one of necessity," Senator Chuck Schumer of New York, the Democratic leader, said before the vote. "To all Americans, I say, 'Help is on the way.'"
Still, some states said they needed far more government aid than it planned to provide. Gov. Andrew M. Cuomo of New York, whose state is battling by far the largest outbreak of the virus in the United States, said Wednesday that the package was "terrible" for New York, and that the $3.1 billion earmarked to help the state with its budget gap was not nearly enough.
"We need more federal help than this bill gives us," he said.
Speaker Nancy Pelosi of California endorsed the deal, and planned to push it through the House on Friday by voice vote -- meaning that no roll call would be taken -- given that the chamber is in recess and its members are scattered across the country, some in places that have imposed travel restrictions and quarantines.
"Members who want to come to the House floor to debate this bill will be able to do so," Representative Steny H. Hoyer of Maryland, the No. 2 House Democrat, wrote in a letter to his colleagues. "In addition, we are working to ensure that those who are unable to return to Washington may express their views on this legislation remotely."
The Senate vote unfolded as Covid-19 took its toll on that chamber, as well. Senator Rand Paul, Republican of Kentucky, was absent because he has contracted the coronavirus, while two Utah Republicans, Senators Mitt Romney and Mike Lee, remain in self-isolation out of an abundance of caution after spending time with Mr. Paul. Senator John Thune of South Dakota, the No. 2 Senate Republican, missed the vote because he was not feeling well, a spokesman said, and had returned home out of an abundance of caution.
The agreement came together after a furious final round of haggling between administration officials led by Steven Mnuchin, the Treasury secretary, and Mr. Schumer after Democrats twice blocked action on the measure as they insisted on concessions.
Once passed by both houses, the measure would be the third emergency bill approved by Congress this month to address the pandemic. Mr. Trump previously signed into law both $8.3 billion in emergency aid and a sweeping package providing paid leave, free coronavirus testing and additional aid for families affected by the pandemic.
In the final measure, most Republicans agreed to Democrats' demands for a substantial expansion of jobless benefits, including $600 extra per week on top of the usual amount provided by states.
On Wednesday afternoon, four Republican senators said they were concerned the new benefits would be larger than some people's wages, prompting employers to lay off workers and some employees to prefer staying home and collecting unemployment payments.
"If this is not a drafting error, then this is the worst idea I have seen in a long time," said Senator Lindsey Graham, Republican of South Carolina. "We need to create a sustainable system."
Mr. Mnuchin said the extra payments were calculated as a way to ensure that states could get money out quickly, saying that he did not believe it would create any perverse incentives. Most Americans, he said, "want to keep their jobs."
Still, the Republicans' threat to hold up the bill because of the issue prompted Senator Bernie Sanders, independent of Vermont and a Democratic presidential contender, to issue his own warning that he, too, would seek to block the legislation for being too lenient on corporations. Later, in a speech on the floor, Mr. Sanders said he would support the bill despite his many reservations.
Encapsulating the sentiment of many lawmakers in both parties about the hastily negotiated package, Senator Ben Sasse of Nebraska, one of the Republicans who sought to cap the jobless aid, said while he disagreed with Mr. Sanders, "I appreciate his candor in admitting that this is kind of a big crap sandwich."
In the end, though, not a single senator voted "no."
The hardest-fought concessions were related to the $500 billion aid fund for distressed businesses, which would include $425 billion for the Federal Reserve to leverage for loans to help broad groups of distressed companies and $75 billion for industry-specific loans to airlines and other hard-hit sectors.
Democrats insisted on stricter oversight, in the form of an inspector general and a five-person panel appointed by Congress. Republicans also agreed to require companies that accepted money through the fund to halt any stock buybacks for as long as they were receiving government assistance, plus an additional year.
The agreement also includes $350 billion for lending programs for small businesses, but only those that kept their payrolls steady through the crisis. Small businesses that pledged to keep their workers would also receive cash-flow assistance structured as federally guaranteed loans. If the employer continued to pay workers for the duration of the crisis, those loans would be forgiven.
Airlines stand to benefit from multiple provisions, according to Senator Patrick J. Toomey, Republican of Pennsylvania. He pointed to an additional $25 billion in grants for them, with the potential for equity to benefit taxpayers. He also said that $17 billion is available for direct loans to companies related to America's national security.
Democrats won a provision to block Trump family businesses -- or those of other senior government officials -- from receiving loan money under the programs, though the president's real estate empire could still benefit from other parts of the bill.
Senators also directly targeted those on the front lines of responding to the pandemic, allocating $100 billion to hospitals, more than $1 billion for virus-related research, and $150 billion for state and local governments to help them weather drop-offs in tax revenue and the costs of fighting the pandemic.
Buried in thousands of pages of dense legal text were less visible steps to mitigate the pandemic's effects on Americans lives and retool large sections of the government to function remotely for the first time.
The bill, for example, would funnel $3.5 billion to states to prop up child care facilities and allows universities to keep paying students in federal work-study jobs even if their academic terms have been cut short.
It would allocate $100 million for additional rural broadband and $150 million for arts and humanities grants to bring cultural programming to Americans stuck at home. It would increase funding for domestic violence shelters and hotlines and set aside $425 million to deal with mental health and substance abuse disorders related to the pandemic. $400 million would become available to protect and expand voting for the 2020 election cycle.
Under other provisions, Americans affected by the virus will soon be able to temporarily withdraw up to $100,000 penalty free from their retirement accounts to use for virus-related expenses. And menstrual products will become eligible for reimbursement under flexible spending accounts.
After Wednesday's vote, Mr. McConnell said, the Senate is not scheduled to return until April 20.
[Source: By Emily Cochrane and Nicholas Fandos, The New York Times, Washington, 25Mar20]
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