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Congress Reaches Consensus on Bipartisan Stimulus Package, Including $284 Billion for PPP

  • Congressional leaders say Sunday evening that they have reached a consensus on an approximately $900 billion economic stimulus package
  • The legislation reportedly includes $284 billion for PPP loans, along with additional funding for small business grants and live entertainment venues
  • The breakthrough follows months of unsuccessful negotiations on further stimulus and comes just days before millions of Americans were set to lose federal unemployment benefits

Congressional leaders reported Sunday that they have come to a consensus on an approximately $900 billion economic stimulus package, with a vote expected Monday. The breakthrough comes after months of unsuccessful attempts to strike a deal that would be palatable to both Democrats and Republicans, and arrives just days before several federal assistance programs are set to expire.

The proposal reportedly provides $284 billion to revive the Paycheck Protection Program and make it open to businesses that have previously received funding through the program as well as those applying for the first time. It would also expand the program’s eligibility to include nonprofits and news outlets, while updating the program in order for it to better serve small businesses, restaurants, and nonprofits.

The legislation reportedly stipulates that loans taken out under both this round and the first round of PPP funding will be tax deductible. Business owners recently expressed concerns after the Treasury Department and Internal Revenue Service declared that businesses would not be able to claim normally deductible expenses if they were paid using PPP funds.

The bill also includes $20 billion for small business grants through the Economic Injury Disaster Loans program, as well as $15 billion earmarked to support live entertainment venues, cultural institutions, and independent movie theaters. Further funding is reserved for very small businesses, community-based lenders, and minority depositories.

Stimulus checks and unemployment assistance account for other major portions of the legislation. If passed, the bill would provide $600 checks to each person in a household, including children but excluding adult dependents, while the benefit would be reduced for those earning over $75,000 a year in the 2019 tax year and omitted entirely for those earning more than $99,000.

Funding would also be allocated to provide $300 a week in additional jobless benefits for 11 weeks, starting as early as Dec. 27. Two federal unemployment programs set to expire on Dec. 26, which support gig workers and others who are typically ineligible for state benefits as well as those who have exhausted their state benefits, would be extended into 2021 but phased out in early April. It is estimated that up to 12 million Americans are receiving federal unemployment benefits.

Other funding will go toward areas such as vaccine distribution and schools. The bill would also extend a moratorium on evictions that is currently set to expire at the end of the year. The bill excludes two measures that proved to be major stumbling blocks in reaching a deal: liability protections for companies and aid to state and local governments.

Partisan gridlock has impeded progress on a new round of stimulus since several key provisions expired in the summer, as Democrats favored broader and costlier legislation while Republicans sought more targeted aid at a lower price tag. House Democrats passed a $2.2 trillion proposal which they later reduced, while Senate Republicans largely coalesced around a $500 billion measure.

Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi also sought to strike a deal, but were unable to do so. The current stimulus legislation grew out of a $908 billion proposal put forward by a group of bipartisan legislators.

Despite the urgency presented by the approaching expiration dates on several programs and safeguards, discussions nearly stalled again over other disagreements. Democrats sought other ways to achieve assistance for state and local governments, but ultimately settled for an extension of the deadline for these entities to spend funds received through the CARES Act. Republicans took aim at the Federal Reserve, trying to limit its emergency lending powers, but agreed to limit the restrictions so the Fed would only be prevented from repeating programs introduced this year in response to the COVID-19 pandemic.

The stimulus bill will likely be merged with another measure to fund the government through the end of the fiscal year. President-elect Joe Biden has urged more immediate action on stimulus, but is also expected to push for further action after he takes office in January.

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