How the $2 Trillion Stimulus Bill Affects Americans and Beloit College Students
Last Friday, on March 20, Congress passed a $2 trillion stimulus package in response to the COVID-19 pandemic that has brought almost every industry in the country to a screeching halt. The Center for Disease Control (CDC) reported on Sunday, March 22 that there were 122,653 confirmed cases of COVID-19 in the United States and reported 2,112 deaths caused by the virus. This number makes the United States the most infected country in the world. Many states have limited movement and have restricted businesses that can operate to those that the government deems essential for the operation of the country, such as grocery stores, healthcare providers, law enforcement, first responders, and several other key areas. As a result, many industries and the people that work in them are left vulnerable. Individuals that depend on their paycheck to pay their monthly expenses are, in most cases, no longer receiving those paychecks, putting them at risk for eviction. The stimulus bill passed Friday was an attempt by lawmakers to relieve the pressure on businesses and families as well as the healthcare system. Here are the main pieces of the bill and how they affect Americans.
Strengthening Unemployment Benefits
Since states started implementing shelter in place orders, a record 3.28 million people have registered for unemployment, according to the New York Times. On top of the state unemployment benefits, the government is giving Americans an additional $600 for the first four months of unemployment in the hopes of making up “100% of lost wages,” reports Politico. This policy was a point of high contention in Congress as Democrats demanded it be included, while Republicans argued that this policy would increase welfare dependency. Senator Lindsey Graham from South Carolina argued that “we have incentivized people not to go back to work.” He gave no references or case studies to support this claim.
For Americans who were laid off because of COVID-19, this is an enormous pressure off their shoulders. It provides a stronger financial safety net for them to fall back on. Where previous state unemployment benefits were not guaranteed to make up 100% of lost wages, making job searching and monthly expenses extremely burdensome, this policy allows for some breathing room as individuals hunker down for the duration of this global disaster.
$500 Billion pot for loans to industries
The Treasury Department now has the authorization to grant loans to certain industries that are particularly affected by COVID-19, such as airlines. The department can also give out loans to cities and states that are hit harder than others. States like New York, California, and Washington have had mandatory shelter-in-place orders for at least a week or two longer than states in the interior. This means that they have been in an economic standstill for a longer duration of time, making the effects more prevalent. Unlike the GOP stimulus bill that was voted down before the revised bill was passed, there is more accountability on businesses and industries. Where in the previous bill the United States Treasury Secretary could simply write a check at his own discretion, an inspector general and accountability committee are now required to oversee how the loans are given out, and after they are given out, how that money is spent. One such requirement is that industries use the money to fund payroll so Americans do not lose their jobs.
Americans that make <$75,000 receive $1,200
If you make less than $75,000 a year or are married and you two collectively make less than $150,000, you are each eligible for this payment. Also, if you have children you claim as dependants, you could be eligible to receive an extra $500 per child. This is aimed to prevent mass evictions across the country and encourage people to still spend money to help the economy. However, this policy does leave out a few important populations. For example, this program is designed to work through the taxation system and those of extremely low income don’t necessarily pay income tax, according to Politico. That means these people, though eligible, might not get access to the program. The second population this leaves out are college students that do not live with their parents. If a parent claims their child as a dependent and that student is not living with them, it is extremely possible that that student will not receive the money they are owed.
For Beloit College students, especially those who are no longer considered dependent on their parents and work for the college, they might not even make enough to qualify to pay income tax. Even if the system uses last year’s income, the jobs at Beloit do not pay well. A tour guide, for example, working the standard hours at $7.25 or $7.50 an hour for one year will not qualify. For other positions, like dining hall workers, it is hard to know exactly what income they could have due to the wide variation in hours each student receives. For students that left the classification of dependant within the last year might not be eligible either. This leaves a large population within college aged individuals that might receive zero dollars as a result of this bill.
Hospitals receive $100 billion in relief
Hospitals across the country have been begging for relief funds since the pandemic began, citing lack of resources and manpower to effectively fight the virus. This $100 billion would come in the form of grants that hospitals can apply for in order to reimburse themselves for money lost due to the slow response of the federal government. The hope is that these grants will allow hospitals to acquire the equipment needed and keep on the necessary doctors and nurses on staff.
President Trump signed the bill into law the same day it was passed last Friday. When exactly these funds will be distributed is currently unknown. There are several other sections of the bill that affect specific industries that were not discussed and we encourage everyone to look more at the bill more in depthly online.
Sources: CDC, CNN, Politico, Fortune.com, New York Times