Experts, pundits, and others have been speculating for some time now that Washington would have to deploy yet another large stimulus package if the country was to have any hope of mitigating the economic damage from the COVID-19 pandemic. Even so, the legislation just introduced by the Democratic leadership in the House of Representatives is bolder than most experts had imagined.
The new stimulus bill, as written, would come with a price tag of more than $3 trillion -- about 50% larger than the massive CARES Act that provided stimulus checks, expanded unemployment benefits, and funded loans to businesses of all sizes.
What is in the new stimulus bill?
As you might imagine, there's quite a bit included in the bill. Here's some of what it would provide funding for, if it were to be signed into law without revisions. (This is not meant to be an exhaustive list -- the actual bill is over 1,800 pages long.)
- Almost $1 trillion for state and local governments;
- Another stimulus payment to individuals;
- Hazard pay for essential workers;
- $75 billion for coronavirus testing and contact tracing efforts
- Instead of expiring at the end of July, the $600 weekly boost to unemployment benefits would last through January;
- $175 billion for rent, mortgage, and utility assistance for affected households;
- Funds for election safety and to help make voting by mail easier;
- Money to help the struggling U.S. Postal Service.
Will it actually pass?
It's important to note that both the White House and the Republican leadership in Senate have their own wish lists of items to add to the next stimulus package, including a payroll tax cut and other potentially costly measures, none of which are included in this legislation.
Furthermore, to say that Republicans are likely to push back on some of these provisions would be a major understatement. Specifically, extending enhanced unemployment benefits and money to expand voting by mail are likely to face opposition.
The point is that while the House is likely to pass the bill on Friday, it has virtually no chance of getting through the Senate in its current form. A more likely outcome will be that this legislation will become a starting point in negotiations between the two parties, similar to what we saw with the CARES Act.