The House on Friday passed the HEROES Act, Democrats’ $3 trillion proposal for the next stimulus package.
While it’s already been dismissed by Republicans in the Senate, the bill serves as an important marker for Democrats’ key priorities as lawmakers weigh how to address the economic fallout from the Covid-19 pandemic.
The legislation, which includes over $900 billion in federal funding for states and cities, as well as another round of stimulus checks and an extension for expanded unemployment insurance, passed the House 208-199 predominately on party lines.
Thus far, the bill has garnered little interest from Senate Republicans who’ve been put off by its size, rediscovered their worries about the deficit and hinted that they might not move additional legislation until after the chamber returns from its Memorial Day recess in June. “We have not yet felt the urgency of acting immediately. That time could develop, but I don’t think it has yet,” Senate Majority Leader Mitch McConnell told reporters earlier this week, according to Politico.
Democrats note they’ve moved quickly on this measure due to the urgency of the crisis. The bill, which also contains a $200 billion fund to cover hazard pay for frontline workers, is Democrats’ stake in the ground as negotiations continue.
That’s not to say, however, that the caucus is united behind the entirety of the bill. On Thursday and Friday, ahead of the vote on the legislation, some moderate members including Reps. Abigail Spanberger (D-VA) and Kendra Horn (D-OK) voiced their opposition, and argued that the measure included priorities unrelated to the emergency at hand.
Earlier this week, progressives including Congressional Progressive Caucus co-chairs Pramila Jayapal (D-WA) and Mark Pocan (D-WI) also urged House leadership to give lawmakers more time to consider the bill, which they viewed as omitting key proposals like a federal paycheck guarantee.
Ultimately, Democrats were able to gather the votes needed to approve the legislation on Friday, though 14 members of the caucus voted against it. What happens next with the stimulus, however, likely won’t be so straightforward.
What the bill contains
Congress has already passed close to $3 trillion in the past couple of months as part of its coronavirus relief efforts — and this latest House package ultimately weighs in at over $3 trillion itself.
While far from a final bipartisan bill negotiated with the Senate, it’s a recognition that there’s no immediate end in sight for Covid-19, or the havoc it’s wreaking on the country. Here are some of the big pieces of the House bill:
Money for state and local governments: The main focus of the House bill is getting money to state and local governments, many of which are looking at serious budget shortfalls due to the coronavirus. The bill contains $500 billion for states, $375 billion for local governments, $20 billion for tribal communities, and another $20 billion for territories like Puerto Rico, Guam, and the US Virgin Islands. The bill would also allocate $755 million to Washington, DC, in coronavirus aid. This is far more than the first CARES Act, which established a $150 billion relief fund for state and local governments.
Per their state constitutions, most states have to balance their budgets and can’t borrow huge sums of money, as the federal government can. With small businesses closing and millions of people getting laid off, once-dependable income streams like sales and income taxes will take a hit, and public workers like police, emergency workers, and teachers stand to lose their jobs.
Additional stimulus checks: There’s a consensus building among Democrats that the one-time $1,200 stimulus checks to Americans weren’t enough to meet the scale of the current economic crisis. Democrats are proposing another round of $1,200 payments to go out, but with some changes. The payments would still be $1,200 for single filers and $2,400 for joint filers, but filers would also be eligible for $1,200 per dependent (this would be capped at three dependents).
On a Tuesday call with reporters, House Majority Leader Steny Hoyer said additional stimulus checks — along with state and local money — would be Democrats’ “red lines” that they won’t consider cutting from the next package, even if Republicans push for changes.
More funding for testing and coronavirus tracing: The US still lags behind other countries in per capita testing. The country currently averages about 264,000 tests a day, and White House officials say they expect that to double. Even so, that would be nowhere near the 900,000 daily tests that public health experts at Harvard’s Global Health Institute say the US should be conducting now. Getting testing and contact tracing up to speed will take additional federal funding, and Speaker of the House Nancy Pelosi has made it clear this is a significant priority for Democrats in their bill.
An extension of expanded unemployment insurance: The CARES Act expanded unemployment insurance by $600 per week until the end of July and made more people, including freelancers and the self-employed, eligible for it. But with the unemployment rate at a staggering 14.7 percent, there’s a recognition that many people will need assistance beyond July. The House bill would extend expanded benefits through January 31, 2021, and put in a so-called “soft cutoff” to ensure some individuals could get benefits through March 2021. Many states need additional money to help cover their portion of unemployment benefits, with their coffers depleted due to the high demand, and the bill allocates $925 million to states to assist with processing claims.
More money for small businesses: Lawmakers are closely monitoring both the Paycheck Protection Program and the Economic Injury Disaster Loan Program, two efforts designed to provide small businesses with loans and grants to help cover financial shortfalls. While demand for the PPP has slowed some, potentially because of the additional debt businesses could take on from the loans, the EIDL is pretty overwhelmed with applications, according to a report in the Washington Post. Underrepresented small-business owners have so far been less likely to obtain funding from the programs, and multiple lawmakers have proposed bills that would funnel more money to those specific entities. Democrats’ bill includes $10 billion for additional grants for small businesses.
Support for SNAP benefits: Earlier this year, lawmakers approved provisions in the Families First Coronavirus Response Act that enabled families and individuals to receive the maximum monthly SNAP benefits for which they qualify. They haven’t, however, expanded the maximum amount, a move that could have serious implications for the poorest families, which haven’t seen any increase in the support they are receiving. Democrats have been focused on a 15 percent expansion to the maximum available benefit, similar to the increase implemented by the American Recovery and Reinvestment Act of 2009 — which was found to have had a significant impact in reducing food insecurity among lower-income households. Their latest proposal includes $10 billion to cover increased demand for SNAP.
Money for elections and vote-by-mail: With a major presidential election just six months away, many states are trying to figure out how to safely hold elections without exposing voters to the coronavirus. Democrats in Congress want to put money toward expanding vote-by-mail access and extending the period for early voting, and the bill allocates $3.6 billion to that end. Rather than mandatory vote-by-mail, this money would help states with the costs of expanding vote-by-mail or no-excuse absentee voting, or increase funding for personal protective equipment for poll workers in states that keep in-person voting.
Funding for the US Postal Service: The bill contains $25 billion in funding for the US Postal Service. The coronavirus pandemic has exacerbated long-standing problems at the USPS, which is saddled with debt in part because of the modern ways Americans communicate. The agency doesn’t typically rely on taxpayer money, but Democrats and some Republicans have been looking at a way to bolster the postal service, which is incredibly popular with the American public. But the White House has resisted past efforts to prop up the program with federal funding.
COBRA subsidies: The bill funds approximately nine months of full premium subsidies for the existing health insurance program COBRA, which allows laid-off or furloughed employees to stay on their health insurance plans. COBRA is typically prohibitively expensive, but this bill would make it more affordable for millions of workers losing their health insurance along with lost jobs. Progressive Democrats, including Sen. Bernie Sanders, have criticized this provision of the House bill as giving money to insurance companies — and have suggested instead increasing funding to expand Medicare and Medicaid to more people.
SALT tax deductions: Among some new tax provisions in the House bill is one that will reinstate the state and local tax deduction, known as SALT. The GOP tax bill passed in 2017 changed that deduction, capping the amount of state and local tax deductions someone could claim on their tax returns at $10,000. It typically impacted higher-income filers in states with higher taxes, like New York, New Jersey, and California.
The Senate is facing growing pressure to consider more expansive stimulus
Pressure is building on Senate Republicans to consider another expansive stimulus measure, even as lawmakers including McConnell have voiced concerns about adding to the national debt. (Economists, meanwhile, argue that the scale of the problem, and low interest rates, bolster the case for more government spending.)
One thing that McConnell does want a new relief bill to do: protect businesses from lawsuits they may face from customers and employees in the wake of the pandemic. President Donald Trump has also raised one of his favorite proposals, cutting the payroll tax, though this suggestion has gotten pushback from Democrats and Republicans alike.
Given the fact that any additional legislation will require the backing of at least 60 lawmakers in the upper chamber, and the majority of the House as well, it’s likely the final proposal will better reflect a semblance of the priorities from both parties. But, next steps for it aren’t exactly clear.
For the most recent “interim” spending bill, the impetus for quicker action was the depletion of the Paycheck Protection Program, which provides loans to small businesses. Republicans have conceded that more stimulus is likely needed, but just how quickly they’ll act on the subject is uncertain.
The Senate is poised to leave town once again for the Memorial Day recess, which was scheduled to extend through May 29. Given this timing, and Republicans’ resistance to advancing more legislation quickly, the next stimulus may not get lawmaker consideration until June.