After being blocked from advancing twice earlier in the week by Democrats, the Phase III coronavirus relief package, the largest stimulus bill in American history, has finally passed the United States Senate with an overwhelming vote of 96-0. Our original breakdown of the bill is available here if you want to see what has changed. The bill remains organized around the four priorities that Majority Leader Mitch McConnell laid out on Thursday of last week.

• Direct financial help for the American people

• Relief for small businesses

• Stabilizing the economy and protecting jobs

• Supporting healthcare professional and patients impacted by coronavirus

If you would like to enjoy some light quarantine reading, the full 880 page bill is here (the original bill was only 247 pages). If you would rather have the basics, here they are (items of particular interest are in red):

Direct Financial Assistance to the American People

• The bill provides checks, known as “Recovery Rebates” of $1,200 for individuals and $2,400 for married couples filing jointly and an extra $500 for each child.

• Individuals with up to $75,000 in income and married couples filing jointly with up to $150,000 in income are eligible for the full amount.

• For those individuals earning between $75,000 and $99,000 and joint filers between $150,000 and $198,000 relief checks are reduced by 5 percent of so much of the taxpayer’s adjusted gross income.

• What qualifies as income?

• earned income

• social security benefits

• any compensation or pension received until Chapter 11, 13, or 15 of title 38 of the US Code

• Individuals above $99,000 and joint filers above $198,000 are not eligible for relief payments.

• Individuals between $75,000 and $99,000 and joint filers between $150,000 and 198,000 will have rebates lowered by $5 for every $100 over the threshold.

• For the majority of Americans, no action will be required to receive checks. The IRS will use 2019 tax returns is filed, and 2018 tax returns if they have not yet filed.

• The bill extends the tax filing deadline to July 15th and allows individuals required to make tax payments to postpone them until October 15h

• Waives 10% early withdraw penalties for early withdrawal from qualified retirement accounts up to $100,000

• Allows the Secretary of Education to defer student loan payments and allows students who were forced to drop out of school due to coronavirus to keep their Pell grants

• Allows colleges and universities to continue work-study payments to students who can not work due to coronavirus closures

• To encourage donations to charities and churches, Americans who contribute to those organizations will be able to deduct up to $300 of cash contributions on their 2020 tax returns whether they choose to itemize or not.

• Employers may contribute up to $5,250 to student loan repayment on a tax free basis without that payment being counted as income. This provision applies to any payment made until January 1, 2024

• Requires the Secretary to defer student loan payments, principal, and interest for 6 months, through September 30, 2020, without penalty to the borrower for all federally owned loans. This provides relief for over 95 percent of student loan borrowers.

Relief for Small Businesses

• Provides nearly $350 billion in federally guaranteed loans via the Paycheck Protection Program to provide eight weeks of cash-flow assistance to small businesses who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven

• Expands the allowable uses for certain small business loans to permit payroll support, including paid sick leave, supply chain disruptions, employee salaries, mortgage payments, and other debt obligations to provide immediate access to capital for small businesses who have been impacted by the coronavirus emergency.

• Provides $17 billion in small business debt relief by requiring the Small Business Administration to pay all principal, interest, and fees on all existing SBA loan products for six months to provide relief to small businesses negatively affected by the coronavirus.

• Provides $10 billion for expanded eligibility for SBA Economic Injury Disaster Loans, including emergency grants, an advance of $10,000 within three days to maintain payroll, provide paid sick leave, and to service other debt obligations.

• Small business loans are up to $10,000,000 per business

Stabilizing the Economy and Protecting Jobs

• Provides $500 billion to the U.S. Department of Treasury’s Exchange Stabilization Fund for distressed industries.

• Authorizes the Federal Reserve to provide approximately $4 trillion in direct aid to various industries and local governments.

• Allows the Treasury Secretary to provides loans and loan guarantees to passenger air carriers, cargo air carriers, and other major industries severely impacted by government health restrictions to combat the coronavirus. (These are not grants or bailouts — loans must be repaid)

• No more than $25 billion of the loans will be available for passenger air carriers

• No more than $4 billion will be available for cargo air carriers

• $17 billion for “businesses important to maintaining national security”

• The Secretary of the Treasury will review applications and enter agreements with impacted companies.

• The remaining $454 billion, as well as any amounts available but not used for direct 
lending, for loans, loan guarantees, and investments in support of the Federal Reserve’s lending facilities to eligible businesses, states, and municipalities.

• Direct lending must meet the following criteria 
(1) Alternative financing is not reasonably available to the business; 
(2) The loan is sufficiently secured or made at an interest rate that reflects the risk of the loan and, if possible, not less than an interest rate based on market conditions for comparable obligations before the coronavirus outbreak; 
(3) The duration of the loan shall be as short as possible and shall not exceed 5 years; 
(4) Borrowers and their affiliates cannot engage in stock buybacks, unless contractually obligated, or pay dividends until the loan is no longer outstanding or one year after the date of the loan;
 (5) Borrowers must, until September 30, 2020, maintain its employment levels as of March 24, 2020, to the extent practicable, and retain no less than 90 percent of its employees as of that date;
 (6) A borrower must certify that it is a U.S.-domiciled business and its employees are predominantly located in the U.S.;
 (7) The loan cannot be forgiven; and 
 (8) In the case of borrowers critical to national security, their operations are jeopardized by losses related to the coronavirus pandemic.

• Recipients of any direct lending are prohibited from increasing the compensation of any officer or employee whose total compensation exceeds $425,000, or from offering such employees severance pay or other benefits upon termination of employment which exceeds twice the maximum total annual compensation received by that employee, until one year after the loan is no longer outstanding.

• Any company in which the President, Vice President, an executive department head, Member of Congress, or any of such individual’s spouse, child, son-in-law, or daughter- in-law own over 20 percent of the outstanding voting stock shall not be eligible for loans, loan guarantees, or other investments

• Establishes a Congressional Oversight Commission charged with oversight of the implementation

• Provides tax relief to businesses affected by the coronavirus emergency. Allows deferred payments on estimated taxes and some payroll taxes, increased deductibility for interest expenses, immediate expensing of qualified property improvements, especially for the hospitality industry, and corrects errors in the Tax Cuts and Jobs Act that inadvertently affected certain businesses.

• This is not the payroll tax holiday that was floated in early march by members of the Trump Administration which we wrote about here. This allows for a deferral of employer side payroll tax liabilities. Payments must be made over the following two tax years.

• The Social Security Trust Fund will not be impacted by these deferrals, a concern raised by Pegasus Institute earlier in the month as ideas were being discussed.

• Prohibits foreclosures on all federally-backed mortgage loans for a 60-day period beginning on March 18, 2020. Provides up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to the COVID-19 emergency. Applicable mortgages included those purchased by Fannie Mae and Freddie Mac, insured by HUD, VA, or USDA, or directly made by USDA. The authority provided under this section terminates on the earlier of the termination date of the national emergency concerning the coronavirus or December 31, 2020.

• For 120 days beginning on the date of enactment, landlords are prohibited from initiating legal action to recover possession of a rental unit or to charge fees, penalties, or other charges to the tenant related to such nonpayment of rent where the landlord’s mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.

• Provides an additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months.

Supporting Healthcare Professionals and Patients Impacted by Coronavirus

• Expands testing and ensures coronavirus tests are free for patients.

• Addresses supply shortages for drugs and critical equipment, including ventilators and medical masks.

• Speeds the development of new vaccines and treatments, such as reducing barriers to work with the private sector.

• Eliminate the requirement in Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (Public Law 116-123) that limits the Medicare telehealth expansion authority during the COVID-19 emergency period to situations where the physician or other professional has treated the patient in the past three years. This would enable beneficiaries to access telehealth, including in their home, from a broader range of providers, reducing COVID-19 exposure.

• Permits patients to use health savings accounts to cover telehealth services

• Increases Medicare payments to hospitals treating a patient admitted with coronavirus

• Expands, for the duration of the COVIS-19 Emergency period, an existing Medicare accelerated payment program. This is particularly important for hospitals in rural areas who will need to maintain steady cash flow through this crisis.

• Provides $150 billion to States, Territories, and Tribal governments to use for expenditures incurred due to the public health emergency with respect to COVID-19 in the face of revenue declines, allocated by population proportions, with a minimum of $1.25 billion for states with relatively small populations.

• Provides a $340 billion surge in emergency funding to combat the coronavirus outbreak. More than 80% of the funding package goes to state and local governments and communities.

• Includes $100 billion for hospitals and health care providers to ensure they receive the support they need for coronavirus-related expenses and lost revenue.

• $16 billion to procure personal protective equipment (PPEs), ventilators, and other medical supplies for federal and state response efforts via the Strategic National Stockpile.

• $11 billion for vaccines, therapeutics, diagnostics, and other preparedness needs, with at least $3.5 billion of that to advance construction, manufacturing, and purchase of vaccines and therapeutic delivery to the American people. This is in addition to the billions already provided for these activities in the first supplemental.

• $4.3 billion for the Centers for Disease Control

• $19 billion for the Department of Veterans Affairs to support increased demand for health care services at VA facilities

The House of Representatives is expected to vote on the package Friday morning.

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