Speaker Pelosi highlighted her plans to create and negotiate an additional stimulus deal over the next month. The COVID-19 pandemic has wreaked havoc on the U.S. economy, and will likely require further support from the Congress and Administration. While the framework of the next package is likely to come together as we better understand where additional support is needed, the Speaker has indicated her priorities include: 

• Additional payments to individuals and families
• More funding for state and local governments to fight the spread of COVID-19
• Industry-specific financial assistance, loans and grants
• Expand qualifications for family and medical leave
• Additional federal funding for food aid and programs
• Stronger worker protections for first responders and health care workers
• Funding to offset COVID-19 treatment costs
• Multi-employer pension fund reform
• Infrastructure investments
• Supply-chain issues, foreign dependence for critical supplies
• Student loan forgiveness

Banner’s team successfully included provisions to support clients in the previous stimulus packages and are working to assist with implementation. Based on our conversations with policymakers, the Treasury Department and the Small Business Administration are working to finalize regulations as soon as possible, so funds can be released to impacted industries and small businesses. These regulations can be updated to ensure industries and companies qualify for assistance. Our tactics include using the Congress to weigh-in with the agencies to achieve specific outcomes. In addition, Banner is already working with Congress and the Administration to help shape the policies included in future economic stimulus packages.

Key Provisions in the CARES Act:

Small Business

• Provides nearly $350 billion in federally guaranteed loans via the Paycheck Protection Program
• Allows the Paycheck Protection Program to be used to cover payroll, paid sick leave, supply chain disruptions, employee salaries, health insurance premiums, mortgage payments, and other debt obligations
• Provides $17 billion in small business debt relief by requiring the Small Business Administration to pay all principal, interest, and fees on all existing SBA loan products for six months
• Provides $10 billion for expanded eligibility for SBA Economic Injury Disaster Loans, including emergency grants, an advance of $10,000 within three days to maintain payroll, provide paid sick leave, and to service other debt obligations

Corporations and Industry

The legislation includes financial resources to corporations and industry in the forms of loans, loan guarantees, and tax-related provision. Specifically, this legislative package provides direct support to the travel industry, including airlines, travel advisors, and aircraft repair stations. The bill provides funding opportunities and stability for industries impacted by the COVID-19 pandemic, including: 

• $500 billion to the Treasury’s Exchange Stabilization Fund for distressed industries
• $29 Billion for the aviation industry, including grants, loans and loan guarantees for air carriers, cargo air carriers, contractors, Part 145 aircraft repair stations, ticket agents, and travel advisors, with some restrictions
• $454 billion to support the Federal Reserve’s emergency lending capabilities
• $17 billion to businesses in the national security industry
• Provides a refundable payroll tax credit for 50 percent of wages paid by employers to employees during the COVID-19 crisis
• Allows employers and self-employed individuals to defer payment of the employer share of the Social Security tax with the requirement that the deferred tax be paid over the following two years
• Relaxes the limitations on a company’s use of losses for tax purposes

Individuals and Families

• Direct payments to individuals and families – $1,200 direct payments to individuals, $2,400 for married couples, and $500 per child, reduced or phased out based on income
• Expands unemployment benefits to include an additional $600 per week for up to four months and an additional 13 weeks of unemployment benefits once state benefits are no longer available
• Permits students loan payments to be deferred for 6 months
• Extends tax filing deadline to July 15, 2020
• Ensures COVID-19 tests are free

Next Large-Scale Economic Stimulus Package – As Soon as April 2020

Congress and the Administration are already creating and negotiating several economic stimulus packages to be considered as soon as this week. Our expectation is this set of proposals will combine to be the biggest stimulus since the Great Recession and offer several opportunities to seek targeted, industry-specific relief. This will be a massive spending effort, and the industries and companies that make their case convincingly are likely to be those that survive and even prosper during this uncertain period.

Long Term Corporate and Individual Economic Stimulus Packages

For planning purposes, we understand leaders on Capitol Hill and the Administration are considering potential solutions like:

• Industry specific relief (travel, retail, manufacturing, technology and others)
• Tax extenders made permanent, or extended a few years
• Payroll tax relief
• Tax credits for large corporations for paid leave and sick leave
• Tax rebate checks similar to the early 2000’s tax packages
• Additional small business loans, along with easing of collateral requirements
• Tax deferrals (industry specific, including quarterly estimated tax payments)
• Payments to Medicare/Medicaid recipients
• Student loan deferment

We expect this process will result in a large-scale stimulus bill with a willingness to consider a variety of industry specific relief proposals to provide best chance at economic relief for companies and their employees.

How Does It Work?

Can we still communicate with policymakers? You bet!

Despite reports that Capitol Hill and Administration offices are closing to the public, our discussions with staff indicate that work will proceed with a combination of in-person and digital meetings. Banner and our clients are continuing to communicate with policymakers now.

This is an opportunity for creativity in working with Capitol Hill. We expect to utilize both conventional meeting spaces, as well as technological solutions like video conferencing, phone calls, or even meeting at an informal location such as outside of Congressional offices. We are well positioned and prepared to help develop and shape these critical proposals.