By Blake Fox
Israel Editor
Beginning in March and April, the COVID-19 Pandemic led to an immense reduction in America’s economic activity. Millions of Americans became unemployed in a matter of days, and thousands of non-essential businesses were forced to close to prevent the spread of the disease. Projections for the economy were also alarming with leading investment group Goldman Sachs projecting a decline in America’s GDP by 24%. The Secretary of the Treasury, Steve Mnuchin, warned that if no government action was taken, then American unemployment could hit 20%. To prevent further economic decline, it became abundantly clear that Congress would have to put together a stimulus package to improve the economy.
One of the initial proposals by political figures, including 2020 Democratic Candidate Andrew Yang, Republican Senator Mitt Romney, and Democratic Congresswoman Alexandra Ocasio-Cortez, was a universal basic income for all Americans. Similarly, Congressmen Ro Khana and Tim Ryan proposed giving cash payments to families in the form of an Earned-Income Tax Credit (EITC). The Trump Administration also considered reducing the payroll tax. By mid-May, three different COVID-19 relief packages passed Congress and were signed into law.
Phase 1 of the COVID-19 relief package, known as the Coronavirus Preparedness and Response Supplemental Act, consisted of around $8 billion -- far more than the $2.5 billion that President Donald Trump requested -- being appropriated towards fighting the disease. The bill, which was overwhelmingly bipartisan, specifically allocated $3 billion towards investing in the development of vaccines and therapeutics and $2.2 billion towards public health funding.
Phase 2 of the COVID-19 relief packages, known as the Families First Coronavirus Response Act, was more expensive and controversial than the Phase 1 package, but it ultimately passed. The bill overwhelmingly passed in the House but faced opposition from Senate Majority Leader Mitch McConnell. However, President Trump tweeted his support for the bill, which gave it enough momentum to pass the Senate by a vote of 90-8. The act provided free COVID-19 testing, 14 days of paid sick leave for American workers affected by the pandemic, and increased funding for government programs such as unemployment. The bill controversially capped the amount of paid sick leave to $511 per day. Washington State Senator Patty Murray introduced an amendment which would have added a provision to the bill allowing for paid sick leave for Americans who had suffered from any sickness, but the amendment failed.
Finally, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is the most extensive and expensive stimulus package in American history. The CARES Act carries a price tag of $2 trillion and is considered to be Phase 3 of the stimulus packages. Although the CARES Act was bipartisan and passed easily, a vote was still required in the House because Congressman Thomas Massie wanted a recorded vote. As a result of Massie’s demand, members of Congress had to return to the Hill and vote for the CARES Act, which dedicates $150 billion towards hospitals and an additional $27 billion towards more research for finding a cure to COVID-19. The bill additionally allocated $150 billion to states to help them fight COVID-19. The CARES Act also aims to help the American people directly by providing them with $1,200 checks, but the checks are means-tested. Individuals who earn more than $100,000 and families that earn more than $150,000 would be ineligible for these checks. Further, the bill massively expands unemployment benefits by increasing workers’ current benefits by $600. It also expands the eligibility for unemployment benefits to 39 weeks and allows those who are either self-employed or in temporary positions to be eligible for benefits. Lastly, the collection of federal student loan payments has been temporarily halted until September 30.
Although Congress spent trillions in economic stimulus, many experts and members of Congress were already talking about greater benefits for Americans in a Phase 4 package.
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