Proposal Summary: Senate Republicans Set To Propose Next Stimulus Bill
The Republican-led Senate was widely expected to propose the next stimulus bill yesterday. However, a last-minute change of plans postponed the announcement of the bill until a later date—most likely Monday. You can read a full timeline of negotiations here.
While the official proposal has not yet been released, The New York Times NYT published a summary of the Republican’s Draft Proposal, which you can find here.
Here is an overview of this proposal. Keep in mind more details will emerge and this is subject to change.
Second Stimulus Checks – Amount To Be Determined
Reports circulated yesterday after Treasury Secretary Mnuchin indicated that the next stimulus checks will be the same as those found in the CARES Act, or $1,200 for qualifying adults with an adjusted gross income of $75,000 or less ($150,000 for married filing jointly), and $500 for dependents ages 16 and under.
The amount of the stimulus checks decreased by 5% increments per thousand dollars until the maximum income level of $99,000 for individuals ($198,000 for married couples). Those with an AGI above these limits would not be eligible for a stimulus check.
Forbes has a stimulus calculator you can use to help determine your eligibility and how much you may receive from the next round of stimulus checks.
However, this has not yet been finalized.
Extending Expanded Unemployment Benefits
Expanded unemployment benefits are a top priority, but they are not likely to be renewed at the current $600 weekly amount. Republicans argue this serves as a disincentive for people to return to work, especially if they are earning more from unemployment benefits than they earned while working.
The new benefit will likely start at a flat rate per week, then transition to a percentage of the worker’s lost income, not to exceed the amount they earned while working.
Paycheck Protection Program Forgiveness and a Second Round of Loans
There is a proposal to offer streamlined PPP Loan forgiveness for small businesses with loans of less than $150,000, with an intermediate forgiveness process for loans under $1 million. Full details have not yet been announced.
This streamlined forgiveness process will save time and resources for everyone involved and allow banks and the government to focus their attention on the larger loans and rooting out potential fraud.
A second round of PPP Loans will also be included in the next stimulus bill. The application process will be different and more targeted to businesses that can prove a minimum of 50% loss of revenue for the qualifying period. This new round of loans will target smaller businesses with up to 300 employees, as opposed to the 500 employees in the first round of PPP loans. These loans will also have a smaller cap.
There are additional provisions for farmers and ranchers, as well as companies that have been impacted by rioting and related protests.
Small Business Tax Provisions
The next bill will call for an enhanced employee retention tax credit as well as tax deductions for employer purchases of PPE, testing equipment, and other supplies.
The business meal deduction would also increase from 50% to 100%.
Coronavirus Liability Protections
Liability protections have long been on the Republican agenda, with Senate Majority Leader Mitch McConnell (R-KY) stating, “No bill will pass the Senate without, liability protection for everyone related to the coronavirus.”
The liability protections are expected to provide a shield for businesses, non-profits, schools, medical providers, and medical professions.
This may become a point of contention, as House Democrats are opposed to such a provision.
Payroll Tax Waiver is Not Included
Despite the wishes of many in the Trump Administration, this draft proposal does not include a payroll tax waiver. President Trump has previously stated he would not sign any bill that does not include payroll tax cuts.
However, there has been staunch opposition to payroll tax waivers from both parties on the premise that they reward large corporations and those who are currently employed, but do nothing for the 30 million Americans who are currently out of work.
This is a developing story. Stay tuned for updates.
Second Stimulus Check Will Be $1,200 For Individuals—Same Rules As First Stimulus Checks
Senate Stimulus Package Expected Monday—Stimulus Checks, Unemployment Benefits, & School Funding May Be Included
Second Stimulus Bill: 3 Ways You May Benefit Even If You Don’t Receive A Stimulus Check
Could 86% Of PPP Loans Be Converted To Grants? Mnuchin Backs Automatic Forgiveness For Some PPP Loans