Second Stimulus Relief Package: Where Would the $900 Billion Go?
After Congress recently passed a $740 billion military spending bill, the window for a desperately-needed second stimulus relief package closes within a few days. Though nothing has been approved at the time of publishing, it appears as though individual payments will be $600, with $300 billion going to PPP, $82 billion going to education, local and state funding getting $160 billion, and $16 billion going to vaccine distribution.
The Need for a Second Stimulus Relief Package
As the fallout from the government’s response to coronavirus continues to unfold, we are seeing more severe manifestations of it:
- Miles-long car columns waiting for food bank distribution in Texas.
- An estimated 30-40 million people at risk of eviction.
- UN hitting the alarm bells for “famines of biblical proportions” coming next year.
- Rising suicide rates among young Americans and the overall rise of substance abuse.
- Unprecedented upward transfer of wealth from small businesses (over $200 billion lost) to giant corporations (over $243 billion gained).
These are just some of the predictable consequences of abruptly shutting down economic activity and radically disrupting social life with novel lockdowns, which even WHO warned against in October:
“We in the World Health Organization do not advocate lockdowns as the primary means of control of this virus.”
Given the CDC’s estimated fatality rates from September 9, 2020, all of this ongoing damage was done to save us from a virus that has a 99.997% survival rate for those under 19; 99.98% under 50; 99.5% under 69; and 94.6% over the age of 70, within the context of the average American life expectancy being 78.
“Something extremely bogus is going on. Was tested for covid four times today. Two tests came back negative, two came back positive. Same machine, same test, same nurse. Rapid antigen test from BD.”
What does all of this mean? We’ll have to leave that to future historians, social psychologists, and statisticians. The fact on the ground remains that the Federal Reserve saved us from a total societal collapse, just as it reversed the wild stock market crash in March. At that time, the first round of COVID relief stimulus checks amounted to $1,200 per individual.
What can we expect at the end of the year, as the threat of homelessness looms for millions of Americans?
What Will Be Included in the Second Stimulus Package?
Across the political spectrum, the overwhelming majority of people agree on one thing – if the government prevents you from working, or it causes you to lose a job, it has to compensate you. This is the backdrop of December’s negotiations as we near the final proposal for the bipartisan stimulus bill. These are the key players in drafting the bill:
- Nancy Pelosi, House Speaker
- Chuck Schumer, Senate Minority Leader
- Mitch McConnell, Senate Majority Leader
- Steven Mnuchin, Treasury Secretary
As the window for Congress to pass the bill closes, it underwent several important revisions. Keep in mind that negotiation “leaks” to the public are often a part of the negotiation tactic. More often than not, they serve as trial balloons. For example, when it appeared that the bill would not contain direct checks to Americans, Republican Senator Josh Hawley stated he would not vote for the bill and urged President Trump to veto it.
This signifies that individual stimulus checks hold bipartisan support and will be included. The question is then, how much?
Based on Pelosi and Schumer’s latest statements, it appears the total funding of the second stimulus package will range between $916 – $918 billion. However, direct checks to US citizens will be likely cut in half compared to previous stimulus payments:
- $600 for individuals or $1,200 for couples.
- $300 per week for additional unemployment benefits, which could be counted retroactively for missed months.
As far as financial injections into non-individual parts of the economy go, the bill seems to be coalescing around these reliefs:
- Payroll Protection Program (PPP) to get another $300 billion. PPP was devised as a help for small businesses to provide forgivable loans in order to cover employee wages and keep their employment on the books. However, this did not prevent PPP from being heavily abused.
- Rental Assistance Funding should receive a yet undetermined sum to give to landlords in an effort to stave off evictions.
- Vaccine distribution efforts should receive $16 billion, which includes testing and contact-tracing.
- Liability protection from lockdown lawsuits remains a big source of negotiation woes. The proposed bill would set a 6-month moratorium against such lawsuits on the local/state level.
- The education system would receive $82 billion in assistance, with an additional $10 billion for childcare.
- Local and state funding would receive $160 billion in aid. However, it is not yet clear if a liability protection shield will be included alongside it. The Trump administration is certainly for it.
Overall, it seems that the half-reduced individual checks are secured, while the rest of the negotiations focus on liabilities and reduction in unemployment insurance. The latter proposal of reduction from $180 billion to $40 billion was rejected by the Democrats. If these issues are not resolved, a smaller bill should pass but with individual checks remaining at $600.
What are your thoughts on a second stimulus package? Let us know in the comments section below.