The days of negotiations between the Trump administration and Congress, and intense lobbying by the industry eager to help address the outbreak of coronavirus, have resulted in spending in excess of $ 2 trillion and a remedy equivalent to tax credit. . It passed the US Senate late on Wednesday night.
Here are some of the winners and losers.
More assistance for companies, tying
According to the latest draft being distributed, the plan includes approximately $ 500 billion in financing and supporting large businesses, states and cities. But aid comes with strings attached after pressure from Democrats.
Companies receiving government loans are banned from buying back shares for the term of the loan and for an additional year. They will also have to take measures to limit officer bonuses and protect workers. The Treasury will need to disclose the terms of the loan and other aid, and the new Secretary of Finance will oversee the loan program.
The bill is primarily a win for the retail, hotel and restaurant industries, which initially viewed legislators in favor of the aviation industry. Trade associations representing those sectors worked hard on Congress for loans, grants, and unemployment assistance, as their business also suffered coronavirus-related revenue losses.
“We consider it a significant victory,” said Austin Jensen of the Association of Retail Leaders. “Yes, the airline is in a tough situation, but the retail industry is in a similarly difficult position.”
Jensen said he hoped that “necessary” monitoring measures would not delay “putting this capital into business.”
Pairing gains approached 1.2%, with the S & P 500 rising 5.1% as the stimulus details pushed the wider market to session highs. The S & P Supercomposite Hotel Index, which includes cruise operators, grew as well as restaurant and casino stocks.
Airlines win loan, equity capital relief
Struggling US airlines are eligible for direct federal loans and direct cash assistance if they are willing to offer the government the option of ownership.
The program allocates $ 25 billion to passenger ships, $ 3 billion to airlines that provide catering and other ground staff, and $ 4 billion to freight forwarders.
The addition of direct cash relief-especially allocated to salaries-was sought by airlines and industry unions who were afraid of massive unemployment if loans were the only option.
The S & P Supercomposite Airline Index rose further, up 17% on the day and closed at 9.8% thereafter.
According to JPMorgan Chase & Co., US airlines will probably avoid applying for a $ 25 billion loan under a federal support package designed to help survive the collapse of travel due to the new coronavirus .
But JPMorgan analyst Jamie Baker said in a Wednesday report that carriers would use a similar amount of cash support for payroll to eliminate the risk of short-term bankruptcy.
In a press conference, Senator Pat Toumei of the Pennsylvania Republican said the law did not include airplane emission limits sought by the House of Representatives.
Other transport winners include railroads and transport operators. Amtrak will raise $ 1.02 billion to cover coronavirus-related revenue losses and support a state-funded route. State and local transportation earns $ 25 billion in operational and capital expenditures.
Small businesses wanted cash injection
The bill has invested more than $ 350 billion in helping small businesses, many of which are financed through the Small Business Administration and banks guaranteed by the federal government. If the operator is more flexible than the original Senate bill, but the company meets certain requirements, including limiting salary and layoff reductions, the loan is acceptable.
Industry defenders have previously stated that loans were not enough. According to the majority of small businesses, immediate cash injections are the only way to save them from failure.
Cash for citizens and gig workers
This package offers low and medium income Americans a direct payment of $ 1,200 per adult and $ 500 per child.
The Democrats were able to secure a change from the previous version where low-income taxpayers could receive the full $ 1,200. The original plan would have paid very low-income people a small check, or even no money at all.
Unemployment insurance payments have been enhanced and recipients will be able to receive these funds for an average of 4 months from the previous 3 months of the GOP plan. It will also extend qualifications to gig economy self-employed workers and workers, such as Uber Technologies Inc. drivers.
Hospital costs under medical “marshall plan”
The law requires $ 117 billion for hospital and veteran health care, and $ 16 billion for personal protective equipment, respirators, and other medical supplies needed for federal and state response activities. This includes $ 11 billion for vaccines, treatment, diagnostics, and other healthcare needs, and at least $ 250 million for healthcare facilities to improve their ability to respond to healthcare events, according to a summary by the Senate Budget Committee. It contains.
This bill would require insurance companies to cover the Covid-19 test. The lab must post the cash price for the test on a public website, and the insurer must pay those prices or another privately negotiated fee. Vaccines and other preventive services must be covered at no cost.
This measure will temporarily remove the reduction in Medicare payments and will include a 20% increase in Medicare payments to hospitals to treat Covid-19 patients.
The hospital industry supported measures to provide emergency funding, increase payments, and suspend some funding cuts. But “we need to do much more to address the virus’s unprecedented challenges,” said Rick Polak, president of the American Hospital Association, in a statement.
Mortgage remedies for borrowers wide swaths
Many U.S. homeowners and businesses hit hard by the coronavirus can benefit from making monthly mortgage payments through legislation.
Borrowers whose loans are guaranteed by government agencies such as the Federal Housing Administration and the Department of Veterans Affairs are eligible for tolerance. Consumers whose mortgages are backed by Fannie Mae and Freddie Mac are also eligible to skip payments.
In addition to suspending foreclosures and evictions by the end of April and possibly delaying them by the end of April, U.S. regulators have patience against borrowers facing financial difficulties caused by the coronavirus. Is already mandatory.
The Senate bill allows 60 days of patience if a borrower can demonstrate virus-related financial stress. The relief can be extended up to 4 times for 30 days.
Mortgage servicers, who collect homeowners’ monthly payments, were unable to request documents proving financial difficulties. Instead, according to the text of the law, borrowers will have to prove that they are struggling.
Private borrowers with federal government loans may skip payments for at least 30 days, with an extension of up to 60 days. Unlike individual consumers, businesses need to document financial difficulties and tenant evictions are banned in the absence of mortgage payments.
Includes emergency aid for farmers
The stimulus package includes up to $ 23.5 billion in agricultural assistance. Provides $ 9.5 billion in emergency funding for agriculture, including livestock producers and producers of specialty crops such as fruits and vegetables. It will also grant $ 14 billion of new borrowing power to the US Department of Agriculture’s Commodity Credit Corporation, a Depression-era entity used by the Trump administration for farm rescue programs over the past two years.
Agricultural groups, including the American Farm Bureau Federation, United Fresh Produce Association, and livestock groups, have sought stimulus assistance.
State and local governments receive relief
A $ 150 billion coronavirus relief fund will be created for states, cities and other local governments. Additional funds are reserved for territories, tribal governments, and other entities.
The package includes $ 400 million for the Election Aid Committee to provide grants in response to a coronavirus outbreak. The money could be used to expand mail-in voting, early voting, online registration, and strengthen face-to-face voting, according to Senate Aide. The bill does not create a state requirement for Republican opposition mail voting.
No assistance from Trump Property
The Democratic Party has obtained language that prevents any business owned by President Donald Trump or his family from receiving financing from the Treasury. Members of Congress, heads of public administration, and businesses owned by Vice President Mike Pence are also prevented from receiving assistance under the stimulus program.
Oil industry loses both renewable energy
The $ 3 billion provision of the first GOP bill to purchase oil for the country’s strategic oil reserves was cut by negotiators. The Trump administration was calling for emergency reserves to buy up to 77 million barrels of crude oil to support domestic industries and raise reserves cheaply.
The Democrats instead called for additional billions of dollars in clean energy funding, and both were eventually disposed of. However, problems may arise as Congress enacts additional coronavirus laws in the coming weeks.
The omission of extended tax incentives for spending on renewable energy and green infrastructure has led to concerns about rising new federal debt from stimulating spending that could hinder green investment and future lending, including solar, wind, It is a blow to electric car defenders.
This action has disappointed renewable advocates, seeking the flexibility to assert existing credits when the project timeline is late. Abigail Ross Hopper of the Solar Energy Industry Association said half of the industry’s work is at risk as a result of the pandemic.
Proponents of the oil purchase have said they still hope that the deal will take place. The Department of Energy can use funds from other government agencies, which can seek more money in future stimulating legislation.
“ I am convinced that the DOE will be able to meet President’s instructions to buy $ 3 billion in U.S. crude oil, ” said Ambradbury, head of the U.S. Exploration and Production Council representing independent oil producers. “
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