By CBJ News Staff
The largest economic stimulus package in history moved a big step closer to reality Wednesday night with its unanimous passage in the U.S. Senate.
The more than $2-trillion Coronavirus Aid, Relief and Economic Security (CARES) Act was approved by a 96-0 vote, and is headed to the House for an expected voice vote on Friday. President Donald Trump has pledged to sign the bill when it reaches his desk.
Businesses across the Corridor and the U.S. have been forced to close or lay off employees as they comply with guidlines to slow the rapid spread of the novel coronavirus, which threatens to overwhelm the capacity of the nation’s health care system.
Provisions of the Senate bill are intended to prevent the economy from crash landing by stimulating spending, preserving jobs and providing support in areas including critically affected industries and workers who must take time away from work because they lack access to daycare while schools are closed. It includes $500 billion in loans for distressed companies and $377 billion in loans for small businesses, among other allocations.
“This bipartisan legislation rapidly delivers recovery checks to help individuals and families cover their immediate expenses,” U.S. Sen. Chuck Grassley, who helped negotiate the bill as chairman of the Senate Finance Committee, said in a news release. “It also helps businesses of all sizes keep employees on the payroll through the crisis and ensures that those who are furloughed or laid off have access to beefed up unemployment insurance.”
Many provisions are implemented through tax policy, including “recovery rebates” that provide individuals with a tax credit of $1,200 ($2,400 for joint filers) plus $500 for each qualifying child. The credit is phased out for taxpayers with adjusted gross income above $150,000 for joint filers, $112,500 for heads of household and $75,000 for other individuals, according to the Journal of Accountancy.
The bill also provides for advance refunding of payroll tax credits enacted last week as part of the Families First Coronavirus Response Act. The credits for paid sick leave and paid family leave can be refunded in advance using IRS forms.
Other provisions for businesses include an employee retention credit for employers that close due to the pandemic. For individuals who need to tap retirement savings, a provision allows early distributions up to $100,000 from retirement plans without the customary 10% additional tax for early distributions.
Praising the Senate action, U.S. Chamber of Commerce CEO Thomas Donohue said the CARES Act “could make the difference between keeping a business up and running over the coming weeks or being forced to reduce salaries, lay off employees or shutter businesses entirely.”
Concerns about the bill remain in some quarters. The pro-labor Economic Policy Institute criticized the large pot of funding in the bill for industry rescues, saying it lacks “guardrails to ensure that public money is directed toward saving jobs, wages and benefits of typical workers rather than the wealth of shareholders, creditors and corporate executives.” CBJ