HEALS Act seeks to heal economy with new stimulus checks
With unemployment across the U.S remaining at Great Depression-era levels, both houses of Congress have been debating what would go into the most effective stimulus packages to help the economy recover. The majority Republican caucus in the U.S. Senate rolled out the HEALS (Health, Economic assistance, Liability protection and Schools) Act Monday afternoon. The Act calls for $1 trillion in new funding to help fight the economic effects of COVID-19. Senate Majority Leader Mitch McConnell called on the leaders of various Senate committees to introduce their component of the Act.
Second stimulus checks
The Act calls for another round of $1,200 stimulus checks for individuals, with more support for families who care for vulnerable adult dependents. Instead of an additional $500 only for dependent children age 17 and under, including adult dependents, even those with no income, may expand the number of eligible dependents by at least 26 million people.
The same income criteria for the CARES Act’s stimulus checks will be in place for August’s distribution: $1,200 per adult with adjusted gross income (AGI) up to $75,000 tapering to zero for those above $99,000 and for married couples filing jointly the threshold is $150,000 tapering down to zero for those above $198,000.
Small businesses will also receive additional funds under the paycheck protection program, with requirements and allowable expenses remaining mostly the same as under the CARES Act. The senate proposal includes $190 billion to support second-draw loans from the PPP, restricted to firms with fewer than 300 employees that have experienced at least a 50% reduction in gross revenue. These companies could take out loans equal to 2.5 monthly payroll cost up to $2 million, forgiveable if at least 60% of the loan is used to cover payroll costs.
Additionally, the HEALS Act expands forgivable expenses to include worker protection costs and covered supplier costs, simplifies the forgiveness process for smaller loans, and expands PPP eligibility to certain 501(c)(6) organizations. The Small Business Administration (SBA) is also authorized to provide up to $100 billion in low-cost loans (maturity up to 20 years with a 1 percent interest rate) to “recovery sector businesses,” defined as seasonable businesses and businesses located in low-income census tracts that meet the SBA’s revenue size threshold, have fewer than 500 employees, and experience at least a 50 percent decline in gross revenues.
For employers, the HEALS Act also provides an increased employee retention tax credit, expansion of the work opportunity tax credit, and a new, refundable payroll tax credit for coronavirus expenses, including testing, cleaning supplies and PPE, plus monetary credits up to $1,000 per employee for expenses paid between March 12, 2020 and Jan. 1, 2021.
Federal Pandemic Unemployment Compensation (FPUC)
The proposed Act includes a reduced federal supplement to unemployment insurance, from $600 per week down to $200 per week to end Sept. 30, and to be replaced with a formula based on 70 percent of a recipient’s lost wages when combined with state unemployment insurance payments up to $500 per week.
U.S. Senator Joni Ernst of Iowa was one senator who advocated for liability protection for lawsuits brought over the coronavirus pandemic.
Ernst said last week, “Bottom line, if we do expect our schools to open, our colleges and universities to resume, our churches to protect them, our businesses – all of that – we know that we do have to have liability protections in place.”
The HEALS Act provides liability protection to health-care providers, schools, and employers, limiting lawsuits brought against them for exposure to the coronavirus.
Senator Ernst was also concerned about spending.
“We are trying to gauge that and make sure that we are very laser-focused on supporting COVID-19 recovery efforts. You know, this is not a grand give away. We won’t support that.” Ernst says she is introducing a bill that would help essential workers by giving them a tax break.
Ernst also advocated for a suspension of federal income tax for essential workers who earn up to $50,000 annually as a reward for their selfless service as they put the interests of others ahead of their own.
The HEALS Act includes $105 billion to help students return to school in the fall.
The HEALS Act is not passed as of Wednesday. It is the Republican response to the Democrats’ HEROES Act and contains significant policy differences. Both houses of Congress are set to begin month-long recesses in the coming week.