After threatening for several days to veto the 5,593-page omnibus bill to fund the government through the 2021 fiscal year and provide coronavirus relief to Americans, President Trump conceded to Congressional and public pressure and signed the legislation on December 27. This avoided the third government shutdown during Trump’s single term in office and provided $900 billion in separate funding for a variety of COVID-19 relief priorities, including extending unemployment benefits, providing financial relief for small employers, extending tax breaks for businesses, and providing $600 checks for individuals who meet eligibility requirements. It also provides funding for state transportation departments, U.S. airlines, Amtrak, vaccine distribution, and additional food and rental assistance to help those who have lost their jobs.
The legislation passed both the House and Senate by overwhelming margins late in the evening of Monday, December 21, just before Congress departed for the Christmas holiday. For more than eight months, the Democratic-controlled House of Representatives had been in negotiations with Treasury Secretary Steven Mnuchin and with Senate Majority Leader Mitch McConnell (R-KY) for a package. Democrats opening position was a $3 trillion program while Senate Majority Leader McConnell offered $500 billion. In the end, with millions of people on the verge of losing their unemployment compensation and the economy showing signs of significant weakening, Congress, as it so often does, came to a last-minute agreement, tying the COVID-19 relief package to the major government spending bill for 2021. The new Congress that reflects the outcome of the November 2020 elections took office at noon on January 3, providing one more impetus to get the legislation done now, rather than having to start fresh at the beginning of the year.
It was assumed that President Trump would sign the measure into law, given the role taken by Secretary Mnuchin on his behalf. However, consumed by campaigning for reelection for most of the year and by his efforts to overturn President-elect Joe Biden’s victory over the past eight weeks, Trump had played little role in the negotiations. Trump’s main professed criticism was that the $600 in economic stimulus assistance was too low and that the number should be $2,000. Although Congressional Democrats jumped at the higher number, it was rigorously opposed by Senate Republicans who argued that it would add too much to the federal deficit.
Republicans had pleaded with the President to sign the bill, arguing that chaos would ensue if assistance lapsed and the government closed. Moreover, millions of Americans would face financial ruin and be unable to pay their bills, put food on the table and pay their rent and mortgages. Hanging over all of this was the unusual phenomena of the run-off elections for Georgia‘s two Senate seats scheduled for January 5. At press time, Democrats were primed to take control of the Senate, with apparent, unexpected wins by both Democratic senators in the Peach state. With the Democrats controlling the White House starting on January 20th, Vice President Kamala Harris would break the 50-50 tie, giving Democrats a majority. With Democrats in control of both houses of Congress and the White House, look for a much more ambitious agenda, probably starting with a large, supplemental COVID relief package.
Highlights of the massive bill include:
Water & Development
In addition to passage of WRDA, a big win for ILTA and our partners in the Maritime Coalition, the bill included the FY21 Energy & Water Development appropriations bill that funds the Army Corps of Engineers. FY21 funding for the Corps is $7.8 billion, an increase of $145 million above the record FY20 level and $1.8 billion above the Trump administration’s FY21 budget.
The Corps construction account received $2.69 billion, an increase of $11.6 million above FY20’s funding level and $519.4 million above the FY21 administration’s request. The FY21 funding measure provides for nine new study starts and seven total new construction starts across the Corps’ civil works mission. For the first time since 2004, one of the new starts must be for inland waterways lock and dam modernization.
Operations and maintenance received $3.85 billion, an increase of $59.7 million above FY20’s appropriated amount and $1.8 billion above the FY21 administration’s budget. Also of note is the rejection of any additional taxes or fees on commercial operators to supplement existing revenue streams.
The legislation also requires the expenditure of all the money collected by the Harbor Maintenance Trust Fund to maintain and deepen the nation’s ports along with an additional $2 billion per year for harbor dredging projects from the trust fund’s $9 billion surplus. However, release of the surplus funds would be up to the appropriations committees.
Direct Economic Relief ($286 billion)
Of greatest interest to most Americans will be the stimulus checks. The final deal authorizes $600 in direct payments to individuals who made less than $75,000 in 2019. Essentially, if you received a check in the spring or summer, you should receive another check for half as much.
Because the Internal Revenue Service had practice sending the rebates earlier this year, some Americans could see that money directly deposited into their bank accounts as soon as next week. Most payments, however, will likely take longer.
The payments will go to every adult and child, meaning a family of four would receive $2,400 from the federal government—if the married couple’s collective income is less than $150,000. But immigrants who are not lawful permanent residents and adult dependents will not receive payments.
Other major provisions of interest are the changes to unemployment benefits. Instead of expiring next week, federal benefits for gig workers and the long-term jobless will continue until March 14—an additional 11 weeks. Unemployed Americans are eligible for an additional $300 per week in jobless benefits during that time, on top of what they receive from the state or federal program paying their claim. Democrats also won an additional 11 weeks of jobless pay for workers who have now been unemployed for so long they have exhausted the state and federal benefits currently available.
Republicans insisted that the bill cost less than $1 trillion, an arbitrary constraint that explains why the direct payments are $600 instead of $1,200 like last time.
Business ($325 billion)
The biggest costs of the bill are the small business sections. In some cases, “small business” is defined as fewer than 500 employees. The GOP-favored Paycheck Protection Program gets $284 billion for forgivable loans to businesses. In total, business provisions account for $325 billion—once the $20 billion in Economic Injury Disaster Loans, $15 billion for live entertainment venues and movie theaters, and several billion for other Small Business Administration programs are included in the total.
Vaccine, Testing, Health Care Providers ($69 Billion)
Nearly $70 billion will go to fighting the coronavirus. There is $22 billion for testing and tracing, $20 billion for vaccine procurement, and $9 billion for vaccine distribution.
Schools ($82 Billion)
Schools are another big winners in the relief plan, with K-12 schools, colleges and universities securing $82 billion. More than $54 billion of that will go to public schools, and more than $20 billion will go to public and private colleges.
Rental Assistance ($25 Billion)
The legislation provides money for a first-ever federal rental assistance program; funds to be distributed by state and local governments to help people who have fallen behind on their rent and may be facing eviction.
Food / Farm Aid ($26 Billion)
The legislation increases food stamp benefits by 15% and provides funding to food banks, Meals on Wheels and other food aid. It also provides an equal amount ($13 billion) in aid to farmers and ranchers.
Child Care ($10 Billion)
Provides $10 billion to the Child Care Development Block Grant to help families with childcare costs and help providers cover increased operating costs.
Postal Service ($10 Billion)
Forgives a $10 billion loan to the Postal Service provided in earlier relief legislation.
Tax "Extenders"
Extends a variety of expiring tax breaks. Renewable energy sources would see tax breaks extended, as would people making charitable contributions. Business meals would be 100% deductible through 2022.
After months of stalemate, the key to reaching a deal was what was left out—most notably liability protection for business and funding for states and cities.
Democrats wanted aid for those governments that have seen their revenue dramatically fall because of the pandemic, but Republicans negotiated a compromise in which Democrats would leave out $160 billion in state and local aid in exchange for Republicans dropping their so-called liability shield.
The liability shield would have protected businesses from lawsuits related to coronavirus exposure, but the language Senate Majority Leader Mitch McConnell (R-KY) pushed for would have also affected unrelated medical malpractice suits and superseded bedrock labor laws that protect workers from wage theft and discrimination.
Ultimately, Democrats agreed to hold back on state and local funding so that Republicans would drop the liability provisions, though Democrats and progressives are already calling for renewed negotiations over state funding once President-elect Joe Biden takes office.
Democrats did manage to extend the deadline by a full year for states and cities to use the funding Congress granted to them in previous Cares Act aid. Funding for state and local governments was set to expire by the end of the year and would have had to have been returned to the federal government if left unspent.