A new presidential administration has begun, a new House and Senate have been sworn in, and more stimulus, it seems, is going out. How much more? That remains a subject for debate on the floor of Congress this week. It’s yet to be determined exactly how much stimulus funding will be available, who will be eligible to receive it and how it will be calculated going forward.
So, what do we know thus far?
The American Rescue Plan
Up to this point, Americans have received two stimulus checks: one for $1,200 in the spring of 2020, and then another for $600 in the early days of 2021. The second check was controversial, and created the unusual situation where both President Trump and President-elect Biden publicly argued it should have been for more, namely $2,000. The Biden stimulus plan — titled the American Rescue Plan — seems to stick with the $2,000 total, as the $1.9 trillion proposal would send a third stimulus check (via ACH payment to checking accounts) worth $1,400 to each American, with some restrictions. Biden has also publicly stated, however, that he is open to negotiating the specifics of the amount and entitlement to collect in the interest of getting a bi-partisan arrangement passed more quickly.
The Smaller Alternative
And Republicans have offered their counter-proposals, according to reports. A small group of Republican senators has presented their own $600 billion alternative to Biden’s plan.
“With your support, we believe Congress can once again craft a relief package that will provide meaningful, effective assistance to the American people and set us on a path to recovery,” Sens. Susan Collins of Maine, Mitt Romney of Utah, Rob Portman of Ohio, Lisa Murkowski of Alaska and five other lawmakers wrote in a Sunday letter to Biden.
The two plans are similar in content — both include an extension of federal unemployment benefits, direct cash payments, additional PPP funds, enhanced SNAP benefits, school funding and behavioral health services money — though given the strikingly different price tags, those funding levels are quite different. The difference is seen most keenly in the direct cash payments portion of the program, which Senator Rob Portman said they would like to see become more “targeted.” In this case, “targeted” means smaller — an additional $1,000 per recipient instead of $1,400 — and with stricter limitations on who is eligible to collect a third payment. Biden has agreed to a meeting with the group of senators, though initial reactions in his own party to the counterplan were not favorable.
Extending Unemployment
Another potential sticking point in the debate is another extension of federal unemployment benefits, with a speculative target of September as an end date. Proponents noted that unemployment insurance is the best and most direct way to reach American workers who have seen their jobs destroyed and massively disrupted by the pandemic and to blunt the effect of a recession. Opponents note that a codified extension as far into the future as September will keep some Americans home from work and actually slow the pace of recovery overall.
A Long Wait
Debate on the American Rescue Plan will officially spin up in Congress this week, but no one expects swift resolution of the issue. Because the Senate will also be conducting an impeachment trial for the former president during the same timeframe, the push to get relief legislation over the finish line will be somewhat diminished. “We’ll try to get that passed in the next month, month and a half,” noted Senate Majority Leader Chuck Schumer. That means it will likely be March before most Americans see their next stimulus check.
The PPP Rolls On
Meanwhile, small business owners could see another uptick in PPP funding in the third round of stimulus, possibly while they are still ironing out questions popping up in the second round. The U.S. Small Business Administration (SBA) announced it is currently working to improve the First Draw Paycheck Protection Program loan review so that SMBs will have more time to access the PPP funds they need.
The SBA is taking steps to improve the First Draw Paycheck Protection Program loan review so that small businesses have as much time as possible to access much needed PPP funds.
“Prior to this newest PPP round, the SBA supported 5.2 million PPP loan borrowers, providing more than $525 billion in economic relief to small businesses and other eligible entities. The Agency is committed to making sure compliance checks are executed on the front-end. The SBA is also committed to addressing issues more efficiently moving forward, to ensure fair and equitable access to small businesses in every community,” said SBA Acting Administrator Tami Perriello.
The SBA is also reportedly working to make the process more efficient for SMBs applying for a second-draw loan.