HEROES Act: House of Representatives pass the largest economic stimulus bill in history
On Friday May 15, the United States House of Representatives passed a new stimulus bill, known as the Health and Economic Recovery Omnibus Emergency Solutions act (HEROES Act), in response to the COVID-19 pandemic. If passed by the Senate, the bill, estimated to be worth more than $3 trillion, will be the largest relief package in the country’s history. The sweeping legislation is intended to financially fuel the economy, similarly to the original CARES Act.
The new bill is expected to extend, supplement and build new spending programs on top of the CARES Act and various other bills that have passed to address the COVID-19 crisis. The following provides a high-level overview of the expansive 1,800 page legislation and provides insight into some of the emergency funding programs provided for in the HEROES Act:
- State and local governments – As drafted, the bill allocates $500 billion in direct assistance to state governments, $375 billion to assist local governments, $20 billion to tribal governments and $20 billion to U.S. territories. The money would assist governments pay vital workers, such as first responders, health workers and teachers. A table demonstrating the estimated allocation of funds for each state can be found here.
- Hazard pay - A $200 billion “Heroes’ Fund” would provide essential workers with guaranteed hazard pay. The fund would allow employers to apply for grants, up to $10,000 per worker or $5,000 for highly compensated essential workers, which provide $13 per hour hazard pay on top of the employee’s regular wages.
- Funding for child and family care – In addition to hazard pay, the bill would allot $850 million for states to provide child and family care for essential workers.
- Additional stimulus checks – Under the HEROES Act, Americans could expect an additional round of direct payments to assist with the economic strain caused by COVID-19. The formula provides for $1,200 to every family member, including children.
- Extends unemployment benefits – Individuals that have filed for unemployment due to COVID-19 would continue to receive the $600 per week addition in unemployment insurance as established under the CARES Act until January 2021.
- Payroll Protection Program – The new legislation aims to address concerns raised under the original Payroll Protection Program by ensuring that it reaches underserved communities, nonprofits of all sizes and types, and responds flexibly to small businesses by providing $10 billion for emergency grants through the Economic Injury Disaster Loan program.
- Student loan debt forgiveness – As currently written, the HEROES Act expands on the current student loan payment plan established in the CARES Act. The new bill expands coverage to private loans and provides up to $10,000 in debt relief to be paid in monthly installments by the Treasury Department until September 2021.
- Increased COVID-19 testing – The proposed bill would provide an additional $75 billion for COVID-19 testing, contact tracing and isolation measures.
- Protection against evictions and foreclosures – After a strong push to protect homeowners and renters from possible foreclosures and evictions in light of COVID-19, the bill provides for $100 billion in assistance to low-income renters to avoid eviction and $75 billion to states, territories and tribes to assist with mortgage payments.
- Election security – In response to the growing tension surrounding how voters will safely get to the polls, the bill allocates $3.6 billion to states for planning and preparing safe and secure elections.
- Enhanced employee retention tax credit – In order to encourage employers to keep employees on their payroll and keep individuals connected to their paychecks and benefits, the bill enhances the employee retention tax credit, in part by, increasing the credit percentage from 50 percent to 80 percent and increasing the per employee limitation to $15,000.
The HEROES Act has proven to be one of the most ambitious economic stimulus packages in history. In fact, the new legislation has been compared to The New Deal, the stimulus package created under President Franklin D. Roosevelt during the Great Depression. However, the future of the behemoth bill is unclear as the Senate and President Donald Trump have already voiced opposition, citing that additional spending is not necessary at this time. It is unclear when the Senate will vote on the HEROES Act but it is likely that the bill will require extensive negotiation and support before being sent to the President. As always, McDonald Hopkins will continue to follow the HEROES Act and provide updated information as it becomes available.
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