Susan Walsh/AP Photo
Unsanitized-072820
Mitch McConnell holds in his hands information about a fairly terrible piece of legislation called the HEALS Act.
First Response
The HEALS Act, a $1 trillion piece of legislation so comically in hock to corporate interests that one of the initials in the acronym stands for “liability protection,” was released yesterday. This was done in a super annoying format where separate committee chairs released their own titles (Finance; Appropriations; Small Business), but you can mostly piece everything together. Here’s what we’ve got:
Unemployment: Increased unemployment insurance immediately falls from $600 a week to $200. This extension runs until the end of the year. Combined with what the states offer, that’s on average a cut from $921 to $521 (around 43 percent), according to an analysis from the Century Foundation. Allegedly, after two months, states will figure out how to individually replace 70 percent of lost wages and offers that, with a cap of $500 from the government in that equation. The cap means that everyone will have lower support from unemployment under this plan.
I highly doubt that states will figure this out, given the technical hurdles and the underfunded systems (which do get a $2 billion boost here), and in that instance they just stick with the $200 a week addition. Also everyone gets a note saying they are required to take a suitable job if offered. Also the federal stipend counts as income for purposes of determining eligibility for other federal benefits.
This only affects those on standard unemployment, not “Pandemic Unemployment Assistance” for freelance and gig workers and independent contractors. That was already extended to the end of the year in the CARES Act. However, the HEALS Act tightens eligibility to make it as hard to stay on assistance as possible. The whole thing is appalling.
Read all of our Unsanitized reports
Second stimulus: This is pretty much exactly the same as the CARES Act, with $1,200 for adults and $500 for dependents (not just children, in a switch from CARES), up to $75,000 in personal income (based on last year) and then a sliding scale that phases out completely under $100,000. One cheerful note: “The rebates are protected from bank garnishment or levy by private creditors or debt collectors.” This is something near and dear to us at Unsanitized, as we broke the news that creditors, including banks, could grab stimulus checks to offset old debts. It’s gratifying that Congress is finally getting around to making sure survival money goes to survival.
Business tax credits: The “employee retention tax credit” sounds boring but this is a pretty large bonus for businesses that could cost as much as $100 billion. It was in the CARES Act but this provision allows more companies to use it. There’s also a tax credit for hiring unemployed workers and a “safe and healthy workplace” tax credit for expenses like testing, PPE, and cleaning supplies (this is Lysol’s big moment; move over, Amazon).
Health care: there’s $118 billion in new money for hospitals, testing, contact tracing, treatment, and vaccines. The Medicare Part B premium for 2021 would be frozen. Telehealth waivers would be extended to facilitate contactless medical care. There’s a bunch of what seems like for-show assistance to nursing homes, including “strike teams” and better reporting. A good health rundown here.
Schools: As previously reported, there’s $105 billion for education, split between K-12 and higher ed with a substantial portion of it only for those schools that reopen in the fall. Amazingly that’s all the money there is for state and local government, and I’d gather all of it covers increased costs for social distancing measures. The $150 billion previously released in the CARES Act, which previously was only for increased COVID costs, can now go toward covering revenue shortfalls, with many restrictions. But that’s not new money. The House Democratic Heroes Act had nearly $1 trillion for state and local government.
Random appropriations: includes $20 billion for farmers, $29 billion for defense (a slush fund for defense contractors and the F-35), a $1.8 billion earmark for a new FBI headquarters that just so happens to be near a Trump hotel, $10 billion for a very sketchy “airport improvement program” (I think they’re just paying off airports to stay open), and about $3 billion for tenant rental assistance, a drop in the ocean of what will be needed. There’s also $5.3 billion more to use the Defense Production Act to require certain manufacturing.
Coupons!: expensing of restaurant business meals goes up from 50 percent to 100 percent. Because you want to be doing business in the middle of a restaurant during the pandemic.
Small business grants: there’s a “Second Draw” PPP loan enabled for smaller businesses (under 300 employees) with a 50 percent drop or more in revenue during the crisis. There are also new “Recovery Sector” 20-year loans at a 1 percent interest rate, also for hard-hit industries. Section 113 of this title makes 501(c)(6) organizations eligible for regular PPP loans; this is the K Street bailout that’s also in the House bill. The math is weird, but it looks like $157 billion in new money, on top of the remaining $120 billion-plus. (There’s already massive lobbying over these plans to pry them open for bigger businesses)
Liability protection: this has been well-documented, it’s a five-year blanket release from a “flood” of business liability lawsuits that don’t exist.
Student loans: after the deferral deadline in the CARES Act runs out on October 1, you can only defer student loan payments if you have no income. Otherwise there’s a 10 percent income-based repayment option.
The Trust Act: we reported last week that a Mitt Romney-created process to inevitably cut Social Security and Medicare would be in the bill. It is.
Here’s what’s missing: There’s no extension of the eviction moratorium, no money for the postal service or the November elections, no hazard pay for essential workers, no OSHA standards for workplaces, no money to shore up pensions, no funds for people who lost employer-sponsored health insurance, no increase to food stamp benefits. And none of the $1 trillion in new money for state and local government.
It’s in some ways a waste to lay this out, as now we move to the negotiating stage. But all of the above being off the table frames the corners of the debate. Nearly the entire framework of the Heroes Act was thrown out. Democrats have some leverage because rank and file Republicans really don’t want to pass this bill at all. But what will they be able to claw back as a result? And doesn’t that put the CARES Act in a different context, as whatever emerges is likely to be very inadequate?
One final indignity: the Republican baseline may include (it’s completely unclear) the repeal of leverage requirements for banks put in place under the Dodd-Frank Act. This is a straight handout to Wall Street. What’s notable here is that this was the signature contribution to Dodd-Frank from endangered incumbent Susan Collins, who I’ve been told argued against this but was rebuffed. There’s no way McConnell does this if Collins had a chance of winning; you don’t strip a Senator’s biggest policy achievement of the last decade in the middle of a tight election if you think she’s going to win. The signal I get is that McConnell knows he’s beat, and the strategy for the next six months is just to steal whatever’s not bolted down on behalf of corporate America.
Odds and Sods
Over at the Prospect today, Les Leopold analyzed some mortality statistics in New York City and performed a regression analysis, finding that the main feature affecting death rates during the outbreak is actually income. Lower-income people, regardless of race, had a higher chance of dying from coronavirus. It’s a really good analysis. Read it here.
Also Shera Avi-Yonah, one of our Prospect interns, breaks down the difficulty registering student voters, and even determining where they should vote if they haven’t returned to campus or are learning remotely. Read it here.
You can find all of our coronavirus coverage at prospect.org/coronavirus. And reach out to me via email with tips, comments, and perspectives.
Days Without a Bailout Oversight Chair
123.
Today I Learned
- Fascinating analysis of the “K-shaped” recovery, with rich and poor going in different directions. (Axios)
- Google keeping employees home for another year, which is a signal that’s going to ruin commercial rents and office vacancy rates. (Wall Street Journal)
- Tennessee refuses to close bars. Fortunately I had “stubbornness” in the “cause of American extinction” pool. (Tennessean)
- Dean Baker does the math showing how vaccine maker Moderna is ripping off the government (Beat the Press)
- The “infection control officer” for the Minnesota Vikings has COVID-19. (The Hill)
- Herman Cain has been hospitalized for nearly a month. (Talking Points Memo)
- That Chainsmokers concert on Long Island where everyone was huddled together? Turns out the CEO of Goldman Sachs, who’s a DJ, performed at it. (CNBC)
- Visiting Disney World during the pandemic. (The Atlantic)
