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United States: President Signs Law to Provide New Economic Stimulus to Address Pandemic Hardships

(Dec. 28, 2020) On December 27, 2020, President Donald Trump signed into law H.R. 133, a consolidated $2.3 trillion appropriations package, including provisions allocating approximately $900 billion for various economic relief programs to address hardships caused by the coronavirus pandemic. This stimulus package is the first large-scale emergency appropriations legislation of this type that the federal government has enacted since the Paycheck Protection Program and Health Care Enhancement Act (PPPHCA) went into force in April 2020.

Some of the coronavirus relief provisions include extending federal unemployment assistance of $300 per week through March 14, 2021, and adjusting the moratorium on residential evictions, previously set to expire at the end of the year, through January 31, 2021. The pandemic appropriations package also allocates $284 billion for the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). The PPP is a federal initiative that provides grants to small businesses that have been affected by the coronavirus pandemic. The act also includes billions of dollars to aid schools and to support transportation industries, such as airlines, buses, and public transit.

Under the coronavirus relief provisions, some individuals earning below a specific income threshold will receive a $600 direct stimulus payment. Qualifying recipients are those with incomes not exceeding $75,000 for individuals, $112,500 for heads of households, and $150,000 for couples filing a joint return. Payments are phased out for persons whose income exceeds those thresholds. Eligible filers will also receive $600 for each dependent child. Legislation has been introduced in the House to increase the amount of these payments from $600 to $2,000; this bill is scheduled to be debated in the House on December 28, 2020.

These payments are the second round of direct monetary relief that American residents have received. Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which the president signed on March 27, 2020, the Department of the Treasury distributed $1,200 to persons with phase-outs based on the same thresholds.

Since the start of the pandemic, the government has enacted a variety of emergency spending measures to assist industries, organizations, businesses, and individuals who have been negatively affected by the pandemic, including the CARES Act and the PPPHCA. During negotiations on this stimulus package, one point of contention was whether to allocate funding for state and local governments, which had lobbied for federal assistance. Although earlier reports indicated that $160 billion would be set aside for this purpose, the enacted appropriations provide no funding for these governments. According to the National Governors Association, state and local government are likely to continue to press for federal economic relief in the coming months.