Sunday evening President Trump signed a stimulus bill that included about $900 billion in relief for Americans and businesses. The framework includes 11 weeks of extended unemployment benefits, as well as $600 of direct stimulus for every person under a certain income threshold, including children. Legislators have also been discussing a provision to address the tax treatment of Paycheck Protection Program (PPP) loans, potentially giving further relief to borrowers.
Like the CARES Act before it, this new bill offers small business support and extends federal unemployment benefits to mitigate some of the economic effects of dealing with COVID-19, at least through March. The politically charged negotiations will likely begin again in a few months, this time focused on economic recovery measures.
Here’s a look at some of the key provisions.
1. Support for small businesses
The bill earmarks an additional $284 billion for forgivable loans, a paycheck protection plan and grants. New this time are expanded benefits for nonprofits as well as $12 billion for minority-owned and very small businesses. This bill also carves out $15 billion for live venues, independent movie theaters and cultural institutions, though details remain sparse.
2. Expanded unemployment benefits
Funding to provide an additional $300 a week for up to 11 weeks to workers who were laid off or furloughed as well as self-employed individuals and gig economy workers who have lost work during the pandemic.
3. Housing assistance
$25 billion in rental assistance and an extension of the eviction moratorium through the end of January.
4. State and local government funding
$82 billion has been provided to bolster schools and colleges, $27 billion for state transportation, and $22 billion for state healthcare funding. With the increased demand for internet, $7 billion has been earmarked to offset costs for broadband connectivity. States also have until the end of 2021 to access the $150 billion allocated under the CARES Act.
5. Other provisions
The overall $1.4 trillion government funding package also included research and development enhancements and an extension of clean energy tax credits, as well as a $15 billion buffer for continued airline payroll support. The final bill also curtails the Federal Reserve’s ability to restart certain lending facilities backed by CARES Act funding, and Raymond James analysts expect the contentious debate on this point to spill over to next year.
The massive bill has so much more packed inside. We encourage you to learn more about the funding and relief package in the latest commentary from our dedicated analysts.
All expressions of opinion reflect the judgment of Raymond James and are subject to change. There is no assurance that any of the forecasts mentioned will occur. Economic and market conditions are subject to change.
Material prepared by Raymond James for use by its advisors.