On Tuesday, the Senate Republicans sheepishly unveiled another coronavirus response package – titled Health, Economic Assistance, Liability Protection and Schools. Or the HEALS Act.
Coming in with a price tag of about $1 trillion, ostensibly, the HEALS Act is intended to aid an ailing economy struggling through the ongoing COVID-19 crisis. But, as we will detail, the bill includes many provisions that have nothing to do with the coronavirus.
DC is gonna DC.
More Checks?
In March, amidst the overwhelming fallout to the initial nationwide lockdown, Congress decided that instead of taking the time to figure out who needs aid and who doesn’t, everyone making less than $75,000 ($150,000 for married couples) would receive a $1200 check from the federal government.
We were skeptical of this plan at the time, given the fact that systems were already in place to support those that need the help. But we acknowledged the need for speed in that moment.
Here we are four months later, and it is much harder to justify checks for everyone again. Yet, the HEALS Act includes another round of $1200 per person checks with a $500 per dependent add on, regardless of need – costing $300 billion dollars. The Democrats also included a check for everyone plan – but provided even more for dependents.
If you are a politician, what could be better than giving everyone a check just a few months out from an election? If you are a young American, what could be worse than watching Washington blow through more of our money for people who don’t even need it?
Scaling Down the Unemployment Insurance
The other key measure in the CARES Act was a supersized unemployment insurance payment – $600 extra per week from the federal government. That made it so that 68% of Americans would make more from unemployment than from working – a problematic fact when it comes to trying to get the economy back on track.
The GOP bill attempts to solve this problem by scaling back the federal boost to $200 per week with instructions to states to provide up to 70% of the original pay for each unemployed person starting in September.
This provision is getting the most attention right now, as the bonus benefits expire this week and millions of Americans are wondering what their budget will look like.
It is anyone’s guess, but so far Republican and Democratic leaders have been unable to hash out an agreement and the benefits expire tomorrow.
Tax Breaks
On the flip side of the equation, the HEALS Act includes $200 billion in tax breaks that are intended to incentivize more hiring. The CARES act includes an employee retention tax break that provides deductions for small businesses that keep workers on payroll (that is separate from the massive loan programs). The HEALS act would expand eligibility to include medium-sized businesses for the tax provision and increase the level of wages that would count towards the deduction. The bill also includes a provision that would incentive companies to hire certain workers – including those that lost a job due to the COVID-19 fallout.
Out to Lunch
In a puzzling move, the HEALS Act would also increase the level of business meal expenses that are deductible from 50% to 100%. The recent GOP tax bill lowered the threshold as a partial offset for the massive rate reductions. Yet, barely three years later, they are looking to expand these dubious tax breaks again.
We could be wrong, but we highly doubt that a lack of full tax deductibility is what is keeping people away from restaurants right now.
PPP
The HEALS Act would provide an additional $190 billion in Paycheck Protection Program loans that will be available for small businesses (up to 300 employees) to draw another round of federal loans.
Money for Public Schools
The GOP plan also includes $100 billion for the Department of Education to help the reopening of schools for the fall semester. The first third of the money will be doled out to all schools, and the next two-thirds will go towards schools that reopen campuses for in-person instruction.
Money for Public Health
The HEALS Act includes another $118 billion for public health measures, including vaccine development and deployment, additional testing, and research.
Money for Public Radio?
The HEALS Act also includes $175 million for the Corporation for Public Broadcasting – which is a significant chunk compared to its typical $400 million annual appropriation from Congress.
Bombing the Coronavirus?
Congress has ramped up defense spending by $300 billion over the last four years. Here comes some more. The HEALS Act throws some more tax dollars at the bloated Pentagon budget, calling for $20 billion in new defense spending – including $686 million for the F-35 boondoggle. Swampy swamp swamp.
The bill also includes $800 million for space exploration just for good measure.
Maybe the coronavirus cure is on Mars?
Raining More Subsidies
The other staple GOP handout are farmers – whose federal subsidies have TRIPLED under the Trump administration. Here comes another deluge of payments – this time $20 billion worth. The CARES Act already included $20 billion in farm payments. That alone is more support than in any single year in American history. The HEALS Act would double that amount.
The DC money tree is ripe for the picking.
What’s That Doing in There???
And filed under the most head scratching provision to be found in a “coronavirus response” bill is $1.8 billion for a new FBI headquarters. Even the GOP Senators who presumably wrote the bill can’t explain why it belongs in there, instead pushing the explanation off to the White House.
Rumor has it, President Trump owns a hotel across the street from the current FBI headquarters. That might have something to do with the fact that he scrapped proposals to move the new headquarters into the DC suburbs and is insisting that it stay within close proximity to the property.
2 Centuries Worth of Borrowing in 4 Months
Over the last four months, the federal government has had to borrow $3 trillion. That is more than the total amount we borrowed for the first 200 years of our nation! Four months versus two centuries. Zoiks!
This level of borrowing and spending is impossible to comprehend. How can you wrap your head around $25 trillion in debt? Well, it is Congress’s job to try. And yet, they continue to ignore the building deficits, placing the entire financial burden on young Americans who will have to deal with the swelling debt (not to mention the $100 trillion in unfunded liabilities still coming due).
Liability Protection
The bill includes a provision that would protect businesses, schools, and health care providers from lawsuits pertaining to exposure to the coronavirus – but would not pertain to cases of gross negligence. This is a key priority for Majority Leader McConnell.
What About Millennial Protection…
All this spending has us wondering where the protection is for us. There is one small but hopeful provision included in the HEALS Act. That is the Trust Act. The Trust Act would convene a committee to assess and provide recommendations for shoring up all the federal trust funds that are careening towards insolvency. This includes major trust funds like the ones that finance Social Security and Medicare.
Though far from a fix – it is one small sign that lawmakers may start taking the $25 trillion in debt and $100+ trillion in unfunded liabilities a little more seriously.
Wanted: Oversight Chairman
Yet, even if the TRUST Act does become law, it does not guarantee follow through. Just look at the COVID-19 Congressional Oversight Commission that was created by the CARES Act in March to oversee trillions of dollars in spending. Four months later and Congressional leaders still have not appointed a Chairman to the Oversight Commission. Bueller…Bueller…
The Bill’s Uncertain Future
This is the GOP opening pitch and so far it has landed with a thud. The Democrats hate it. Most Republicans hate it. And given all the extraneous nonsense in there, the American people are likely to hate it.
It does look like Congress feels the need to pass a bill, especially given that the unemployment insurance bonus is going to expire this week. But what a final product, and how much extra junk gets heaped onto it looks like is a tough guess right now.
Stay tuned.
