While stimulus has been the most talked about a vote on spending for Congress to approve, few realize President Trump had to sign a 24 hour stop gap measure last night to keep the federal government running as it technically ran out of spending authority last night. Though this will all be resolved today as Congress reconvenes in Washington, D.C. to pass a mega bill which includes somewhat of an omelette du jour of spending. It is such a mess, no one has read the entire package and most, if not all, U.S. Senators and House members will vote on a bill not read, which will go to President Trump to sign and he will probably not have read it either before signing it into law. Nearly all the spending being voted on today will involve adding more debt to the federal balance sheet and increase the federal deficit dramatically.
The investors in the nation apparently dislike what they see. Both Wall Street and Bitcoin are being negatively affected by this news. Futures this morning for the DOW are crashing with an implied open down over 600 points. Meanwhile, Bitcoin which would normally rise when the federal government adds to its debt and deficits is down substantially. This temporary financial turmoil could be related to the news that additional strains of COVID-19 in the U.K. could create more problems here in the United States for a future free of the COVID.
Regardless, today, the U.S. House and the U.S. Senate are expected to vote to spend $1.4 trillion in omnibus spending in leu of passing an actual budget for normal government spending. Besides that, Congress will probably pass stimulus money which will reach a wide range of people, companies, and governments.
Even though the text of the bill has not been released, we know some basic frameworks which have been agreed upon by members of Congress. Foremost, most Americans will have $600 dropped into their bank accounts similarly they received $1,200 earlier this year. If one makes under $75,000 ($150,000 for married couples) they will receive the payment plus $600 per child. We believe there is a scale down effect based on income, similar to the $1,200 payments earlier this year; however, those numbers have not yet been released. Americans should start seeing those payments drop into their bank accounts or mail box in 3-6 weeks.
For those who had been receiving $600 per week in Pandemic Unemployment Assistance earlier this year, you will receive $300 per week through March 14, 2021. Talk of having this retroactive is not likely including in this latest round of negotiations, so don’t expect a huge payment, only expect the $300 per week besides regular state unemployment payments. This is mostly for freelance workers who receive 1099s and should see the extra $300 appear in their unemployment in about three weeks, depending upon which state they live. Another positive for freelancers and small business owners is that business meals will be 100 percent deductible through 2022.
The Payment Protection Program (PPP) for businesses has been allocated another round of $325 billion in federal taxpayer-funded aid. Those who received funds from PPP earlier this year will probably qualify for another round of potentially forgivable federal loans. The positive of this part of the legislation is that it ensures that if a business has been or will be given a PPP loan and the federal government has forgiven it, it will not be a taxable event. There was a doomsday scenario looming over small businesses who were granted relief from loans they received as taking that on as income, potentially causing one’s tax liability to soar.
Ten billion dollars is in the bill for the Army Corps of Engineers to pay for 46 water projects around the country, which is supposed to help with flood controls and coastal protection projects.
Americans who experience unexpected medical bills will now be able to receive treatment from out-of-network providers. We have not seen details of this part of the bill; however, this aspect of health insurance has been financially challenging for many who have had to pay out-of-pocket in some rare cases.
The U.S. Postal Service will receive forgiveness for a $10 billion loan the taxpayers had funded. Another $10 billion is going to Child Care Development Block Grants. Those receiving federally funded food help via SNAP will see a 15 percent bump in their benefits and Meals on Wheels and other food programs for low-income individuals and families. This additional spending will cost taxpayers $13 billion, and another $13 billion will go to farmers and ranchers.
$82 billion will go to government-run school systems around the country. K-12 schools will receive $54 billion, colleges and universities will receive $23 billion, $4 billion will go to the Governors Emergency Education Relief Fund, and nearly $1 billion to Native American schools.
For those needing help to meet their home rental payments, the federal taxpayer will set aside $25 billion for those who may have fallen behind in their rent and are potentially facing eviction. State and local governments will administer the $25 billion.
To assist with the COVID-19 epidemic directly, they have allocated $69 billion for vaccine distribution costs, treatment, and to create a stockpile of the various vaccines coming out. Of that $69 billion, $22 billion is being allocated for testing, tracing, and mitigation. Another $9 billion is being set aside for health care providers directly, and $4.5 billion for mental health treatments for those affected by COVID-19.
There is likely more pork included in the package, and though some non-COVID projects have been bantered about in different circles around D.C., we do not know what pork they will pass in this legislation. Many items of pork will probably show up in a future publication of the Congressional Pig Book. We will report on those in the future once we see what will probably be a 5,000+ page bill. The $10 billion for the Army Corps of Engineers was 400 pages on its own, so it will interest to see how many pages of pork this bill covers.