Coronavirus: 3 things to know about the latest $480bn federal aid package

Congress has now spent more than $2.5trn so far on coronavirus relief – and another deal is already in the works

US legislators will only have had a couple days to read the final version of a coronavirus relief bill drafted behind closed doors that totals nearly half a trillion dollars before they are expected to send it to Donald Trump.

The pressing needs of an economy and health system faltering under the pressures of the pandemic have made such a rushed process the new normal on Capitol Hill.

The Senate is expected to pass the measure unanimously on Tuesday afternoon. When the House is called into session on Thursday to vote on the package, dozens — if not hundreds — of members aren’t even expected to be there, instead voting by proxy through their colleagues.

Party leaders and White House economic advisers have spent two weeks hammering out the deal that is expected to pass the Senate Tuesday, the House Wednesday, and get the president's signature by the end of the weekend.

Here are three things to know about the bill:

1. It includes roughly $480bn for small business employees, hospitals, and testing — but no direct cash payments to taxpayers

The deal struck Tuesday includes an additional $370bn in relief for small businesses, most of it through a new Treasury Department program called the Paycheck Protection Program (PPP) that finances loans to small businesses that can be forgiven up to 100 percent if employers use the money to maintain certain payroll thresholds.

That $370bn figure includes $50bn for the Small Business Association’s so-called emergency Economic Injury Disaster Loan (EIDL) programme.

Separately, the bill allocates $75bn to hospitals and other health care systems that are in desperate need of more beds, personal protective equipment (PPE) such as masks, manpower, and other supplies.

Lawmakers also have agreed to spend $25bn on a comprehensive national testing program, funding that will be split down the middle, with half going to the feds and half to states and localities.

Health experts have said the US needs to be testing 500,000 people per day, at a minimum, in order to safely re-open parts of the economy. The US is currently testing less than 150,000 people per day. Nevertheless, Mr Trump is urging state leaders to begin the complicated process of getting their territories back to normal, with several southern states taking the lead – even Georiga, where confirmed Covid-19 cases continue to climb.

Meanwhile, the $1,200 direct cash payments that the Treasury Department has already sent to roughly 80m Americans via direct deposit — with millions receiving their checks in the mail soon — were not renewed for a second round.

2. While Republicans will say Democrats wasted time, Democrats will point to key legislative victories

Republicans have been hammering their Democratic counterparts daily for nearly two weeks for blocking a bill from Senate Majority Leader Mitch McConnell on 9 April that would have immediately sent $250bn in additional funding to PPP coffers to help small businesses, which gobbled up the last of the previous $351bn allotment last week.

“We need more data” about how PPP is being administered, Speaker Nancy Pelosi said earlier this month in opposition to Mr McConnell’s bill, highlighting concerns from Democratic House members that small businesses in “underbanked” poor and rural communities lacked access to the government aid because they do not have relationships with larger financial institutions.

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The partisan sniping has persisted for 13 days.

As recently as Monday, House Minority Leader Kevin McCarthy, Republican of California, was openly pondering “how many more millions of Pelosi's layoffs will we have to endure before she will put people before politics?” — even though Treasury Secretary Steven Mnuchin and Democratic leaders had said the day before they were closing in on a deal.

To counter attacks about the two-week delay in additional funding for small business relief, Democrats will come away from the negotiating table touting the inclusion of several provisions that were not part of Mr McConnell’s “clean bill” on 9 April; its sole provision was to “delete” the original $351bn provision for PPP in the $2.2trn so-called CARES Act passed in March and change it the monetary figure to $600bn.

Democrats successfully negotiated for the roughly $370bn small business portion of the package to include a $60m set-aside for “community development financial institutions” that provide capital to those “underbanked” communities, whose small business owners are disproportionately minority, women, veteran, and rural.

They will also take credit for leveraging Republicans into adding the $75bn in additional funding for hospitals and $25bn for testing.

3. This is not the last coronavirus relief package

Democrats did not get everything they wanted in the bill released on Tuesday, which they have called an “interim relief” package.

For instance, it does not include Democrats’ requested 15 per cent increase to the maximum monthly food stamp benefit.

Republicans did not sign off on providing billions of dollars in additional funding for state and local governments that are on the front lines of the health crisis.

But Mr Trump has acknowledged the federal government still has hundreds of billions — if not trillions — of dollars to dole out in the near future to keep the health care system above water and prevent the beleaguered US economy from sliding into a years-long recession.

In an early-afternoon tweet on Tuesday, Mr Trump announced an ambitious rough sketch for the next bill, which lawmakers are calling “CARES 2,” to include more money for states and localities, payroll tax cuts, and a sweeping infrastructure deal that has eluded agreement between the parties for virtually his entire first term in office.

“After I sign this Bill, we will begin discussions on the next Legislative Initiative with fiscal relief to State/Local Governments for lost revenues from COVID 19, much needed Infrastructure Investments for Bridges, Tunnels, Broadband, Tax Incentives for Restaurants, Entertainment, Sports, and Payroll Tax Cuts to increase Economic Growth,” the president tweeted.

Ms Pelosi also has expressed an eagerness in recent weeks to strike a landmark infrastructure deal with Republicans and to send more money to state and local governments fighting Covid-19.

But the barriers to a deal on "CARES 2" will be immense.

House progressives are pushing for a slate of “recurring” welfare benefits to help Americans through what economic experts have predicted will be a ruinous 2020.

Their priorities include automatic monthly payments of $2,000 to every US adult, plus $1,000 for each child for up to one year, or until the employment-to-population ratio reaches 60 per cent; a waiver of the TANF work requirement; and expanded food stamp benefits.

Meanwhile, Republicans have begun signalling their unease with skyrocketing government spending, even as the health crisis rages on.

When the latest bill passes Congress later this week, the US will have spent more than $2.5trn responding to the pandemic in the last eight weeks. That’s roughly 12 per cent of the country’s 2019 GDP.