Last week, Democrats in the House of Representatives put together another COVID-19 stimulus plan. A vote from the House could be coming as early as this week. How does this relief package differ from ones in the past? What are the chances a bill can get passed? In this post, we will discuss these questions.
In the summer, the House proposed the HEROES (Health and Economic Recovery Omnibus Emergency Solutions) act while the Senate put forth the HEALS (Health, Economic Assistance, Liability Protection, and Schools) bill. As we wrote about in August, both bills contained direct payments to taxpayers, unemployment assistance (although with varying degrees), student loan relief, and small business aid. Some of the areas where these bills differed were liability protection for small businesses and additional aid to state and local governments. Overall, the HEROES Act was projected to cost over $3 trillion while the HEALS act was projected to cost $1 trillion.
While the specific details of the new House bill are yet to be released, we do know that the House is proposing a scaled-down version of the HEROES bill. The new proposed bill would provide aid to airlines, restaurants, and small businesses. Also, many of the provisions of the HEROES act will remain the same, just with a shorter time frame. For example, in the original HEROES act, we saw student loan deferments extended until September 2021 (about 12 months out). With the new bill from the House, the deferment period could be shortened by several months. Overall, the new bill in the House is reported to have a $2.2 trillion price tag. This is almost $1 trillion less than the original HEROES act.
Although the odds of another round of stimulus before the November election look very slim, there does seem to be some progress on both sides. The original HEROES act had a price tag of over $3 trillion, while the HEALS act had a price tag of $1 trillion. With the latest proposals by the House, the gap between the bills is narrowing. Generally, a negotiation process involves give and take by both parties over time. The same could be happening here, and it seems both parties would like to have a deal in place before the election to claim a victory for their constituencies. It may only be a matter of time before both sides of Congress can meet in the middle – but this is politics, so we aren’t loaded on confidence. Stay tuned as we follow the progress in our nation’s capital and how this may impact the economy.