Lawmakers in Washington DC failed to reach an agreement on the next round of economic stimulus to address the COVID-19 pandemic, letting the current $600 a week in federal unemployment payments lapse as of Friday July 27.
Both the Republicans and Democrats have introduced or outlined their own relief packages, and while there are some commonalities, the two sides have indicated a deal is not forthcoming. Major differences between the two sides include the cost of the bill, employer liability protections, how much continuing federal unemployment payments should be, and what eviction and foreclosure protections are needed.
Democrats passed the HEROES Act in May, a $3.3 trillion dollar package that was deemed a non-starter by Senate Republicans at the time of passage. U.S. Senate Majority Leader Mitch McConnell unveiled Senate Republicans’ plan on Monday. The $1 trillion plan, which was immediately met by opposition from both Democrats and some Senate Republicans, will be called the HEALS (Health, Economic Assistances, Liability Protection and Schools) Act.
Below is a summary of the major provisions of both bills and the differences between them.
How to address unemployment payments is a major point of contention. Businesses are reporting that they are having trouble rehiring employees, who in some cases are making more on unemployment than when they were working.
- HEROES: Extends additional $600 per week for unemployment insurance through January 31, 2021.
- HEALS: A continuation of the federal supplement to state unemployment insurance, the HEALS Act proposes for the federal supplement to be based on 70% to 75% of lost wages, starting at $200 a week and over time increasing to $500 a week.
Both Republicans and Democrats would issue a second round of $1,200 stimulus checks, but payments for dependents differ.
- HEROES: Democrats would expand eligibility and increase payments to up to $6,000 per household.
- HEALS: Up to $1,200 would be paid to individuals with incomes of $75,000 or less a year, and $500 would be made for each child or adult dependent.
Liability shield for employers
What liability employers may have for employees who contract COVID-19 at work and their responsibility to make the workplace safe are major differences between HEROES and HEALS.
- HEROES: The bill does not address liability of employers but instead mandates that the Occupational Safety and Health Administration require all workplaces to implement infection control plans
- HEALS: Makes lawsuits claiming people contracted COVID-19 at work because the business (or school, charity or certain other organizations) had inadequate worker protections subject to a higher standard than ordinarily applicable to negligence suits. The higher standard also would apply to personal injury and medical malpractice suits. Employers also could remove the lawsuits to federal court.
Both bills would continue or expand the Small Business Administration’s (SBA) Paycheck Protection Program (PPP).
- HEROES: Expands the PPP to include all nonprofits; provides another $659 billion for the PPP as well as an additional $10 billion for the Economic Injury Disaster Loan program at the SBA. Many other aspects of the bill have since been incorporated into the Paycheck Protection Program Flexibility Act
- HEALS: Includes a PPP “sequel” to help prevent more layoffs, with second loans potentially available for businesses with 300 or fewer employees and 50% or greater revenue declines. In addition, the universe of allowable expenses for use of PPP funding would be expanded. Additional funding would also be made available under the SBA’s traditional 7(a) program.
Money for schools, local and state governments:
Both bills include around $100 billion for schools, but the HEROES Act includes more than a trillion dollars of additional funds for state and local governments.
- HEROES: $1 trillion to state, local, territorial and tribal government for fiscal relief, $100.15 billion in education funding for states, school districts, and institutions of higher education, $3.6 billion in grants to states for elections, and $15.75 billion for transit agency relief among others.
- HEALS: $105 billion would be available to help schools and universities reopen safely.
Money for testing, tracing, treatment & vaccines
Both bills provide significant funding for testing, contact tracing, treatment and vaccines.
- HEROES: $100 billion for the Public Health and Social Services Emergency Fund to provide additional relief to hospitals and health care providers, increased payments to state Medicaid programs, $75 billion to support testing and contact tracing activities, and $4.5 billion for therapeutics and vaccines, manufacturing facilities, and innovation in antibacterial research, and other
- HEALS: It includes $118 billion for hospitals, testing, contact tracing, treatment, and vaccines. The Medicare Part B premium for 2021 would be frozen. Telehealth waivers would be extended.
Employee retention tax credit:
Both bills provide tax credits for employers who retain workers.
- HEROES: Expands the CARES Act’s employee retention tax credit, increasing the credit from 50% to 80% of qualified wages and increasing the employee wage limit from $10,000 per year to $15,000 per quarter.
- HEALS: An employer could receive refundable tax credits for wages paid to an employee during the pandemic and use the credits to subtract from, or receive a refund over, taxes they owe.
Additional provisions in the HEROES Act:
- $200 billion “Heroes’ fund” to provide hazard pay to workers deemed essential during the pandemic.
- Provides around $100 billion for rental assistance, giving vouchers to cover the cost of rent and utilities.
- Extends the ban on evictions for nonpayment for a year following its enactment date
- $75 billion for a homeowner assistance fund meant to prevent mortgage defaults and property foreclosures.
- $3.1 billion for workforce training
- $10 billion for the Supplemental Nutrition Assistance Program as well as a 15% increase to the maximum SNAP benefit.
- Up to $10,000 in student loan forgiveness for public and private loans
- Repeals the $10,000 cap on state and local tax deductions.
KJK will continue to monitor developments at the state and federal level. If you have any questions about the HEROES or HEALS Acts, contact Jennifer Hart at email@example.com or 216.736.7208.