President Trump’s Senate GOP allies Thursday released a $1 trillion-plus economic recovery plan to speed direct payments of up to $1,200 to individuals, help small businesses stay afloat, and provide subsidized loans to the airlines and other industries distressed by the economic wreckage of the coronavirus epidemic, among other provisions.
The measure attracted criticism from Democrats who prefer far more generous unemployment compensation, help for hospitals and other health care providers, and aid to state governments facing fiscal shortfalls.
Here are the highlights:
DIRECT PAYMENTS/AID TO INDIVIDUALS AND STUDENTS
Provides direct payments of up to $1,200 for individuals and $2,400 for couples making less than $75,000 and $150,000 respectively, with $500 per child. The credit would be gradually phased out for incomes exceeding $99,000 and $198,000. The “recovery rebates” would be limited to $600 ($1,200 for couples) for low-income families with little or no tax liability. The rebates would be delivered based on 2018 income.
Permits penalty-free withdrawals of up to $100,000 from tax-deferred retirement accounts such as 401Ks to cover coronavirus-related expenses.
Extends the traditional April 15th tax filing deadline to July 15th and allows individuals required to make estimated tax payments to postpone them until October 15th.
Defers student loan payments and allows students who were forced to drop out of school due to coronavirus to keep their Pell grants.
Provides $300 billion for a generous loan program for small businesses that anticipates loans would be forgiven for employers who use them to meet payroll expenses. Other loans could be used for payroll, sick leave, mortgage payments, and other debt obligations. Eases rules in a just-enacted paid leave mandate for small businesses.
For larger businesses, the GOP plan would provide $208 billion for loans and loan guarantees to distressed sectors of the economy, including $50 billion for commercial airlines and $8 billion for air cargo carriers, and $150 billion for other eligible businesses, but those loans would have to be backed up by collateral and paid back. Unlike the airline bailout after the 9/11 attacks, there would not be direct cash grants to airlines. Allows businesses to defer payment of the 6.2% employer payroll tax. Businesses would also receive more generous rules for business deductions of losses and interest costs.
Locks into federal law a commitment from health insurers that coronavirus tests will be cost-free to policy holders. Requires coverage of coronavirus vaccines as a preventive service, at no cost to patients. Boosts Medicare payments for treating COVID-19 patients and suspends a 2% Medicare payment cut to health providers through the end of the year. Provides liability protection for manufacturers of respirators and other medical gear.
Source: Associated Press