March 18, 2020
Congressional leadership is working to develop a large-scale stimulus package that can win bipartisan support.
Washington Policy Analyst Ed Mills and Healthcare Policy Analyst Chris Meekins weigh in.
Tuesday’s pivot toward a broad fiscal stimulus plan in the $1+ trillion range is a market-positive development, which was not a given at the beginning of this week. The package under discussion would provide Americans with a check of an amount to be determined as an initial boost for households and consumers.
Negotiations on this provision will focus on targeting the funds to certain income levels. We will be watching to see what income thresholds become the baseline in the coming days, or if other provisions such as refundable tax credits and expanded unemployment assistance are added to the direct payment section of the bill. President Trump, Secretary Mnuchin and Speaker Pelosi signaled agreement on the need for targeting in this respect on Tuesday. The broad agreement is a positive – the details will be the difficult part.
There appears to be broad agreement on boosting support for small businesses through loans via the Small Business Administration (SBA) and other relief in the amount of $250 billion. Support for the airline industry is currently projected to be in the $50 billion range and support for other businesses is also being discussed in the $50 billion range (with tax credit and net operating loss [NOL] carryforward provisions being discussed).
See below for a breakdown of Congressional relief measures that are currently active or in the negotiations stage.
Phase One
Title: Coronavirus Preparedness and Response Supplemental Appropriations
Act Cost: $8.3 billion
Status: Law as of March 6
Highlights:Outbreak preparedness and response. $6.7 billion for U.S. agencies to respond to outbreak and research therapies. Expanded research and development. $3.1 billion for the U.S. Department of Health & Human Services (HHS) Public Health and Social Services Emergency Fund. State and local resources. $2.2 billion to the Centers for Disease Control and Prevention (CDC) for response effort. Therapies and vaccines. $836 million for National Institutes of Health (NIH) response effort.International outbreak support. $1.6 billion for international response.
Phase Two
Title: Families First Coronavirus Response Act Cost: $100 billion (estimated)Status: Passed by the House on March 14; awaits Senate action.
Highlights: Free testing. Free testing for everyone who needs a COVID-19 test, including the uninsured. Paid sick leave. 14 paid sick days for businesses with fewer than 500 employees, partially reimbursed with a tax credit ($5,110 aggregate total).Food assistance. $900 million in nutrition assistance will be provided for students who are out of school and assistance for food banks and seniors. Unemployment assistance. Additional funding for states that experience a 10% increase in unemployment. Expanded Family and Medical Leave (FMLA). Expands existing FMLA protections that provide up to 10 weeks of time. Pay is 2/3 of monthly earnings up to $10,000 aggregate cap. Only applies to companies with fewer than 500 employees. Healthcare worker protections. Expanded federal safety and health protections for frontline healthcare workers.
Phase Three
Title: Pending
Cost: $800 billion to $1+ trillion (estimated)
Status: Negotiations ongoing, led by the Senate
Highlights: Payments to individuals. Cash infusion for consumers (potentially in $1,000 range). Payments may be provided multiple times. $250 billion initial payment to individuals, second $250 billion in payments at a later date. Targeted relief for airlines, potentially in the $50-60 billion range. Targeted relief for hotels, possibly. Targeted relief for cruise lines, possibly. Small business support. Expanded small business loans, potentially in the $250 billion range.
Phase Four
Title: Pending
Cost: $8+ billion (estimated)
Status: Still in the discussion phase; phase three response is the current priority
Highlights: Secretary Mnuchin has signaled the administration will ask for another emergency federal funding bill for agencies to mitigate the spread of the virus and implement some of the Trump administration executive actions.
Source: Raymond James research -
All expressions of opinion reflect the judgment of Raymond James & Associates, Inc., and are subject to change. Economic and market conditions are subject to change.~