The U.S. Senate has approved a $2.2 trillion economic stimulus package to combat the economic effects of the COVID-19 virus.
The Senate vote was 96-0. The House is expected to vote on the bill on Friday, March 27, 2020.
Some broad perspective on the size of this package: for Fiscal Year 2019, tax revenue aggregated nearly $3.5 trillion dollars, and total Federal spending amounted to nearly $4.5 trillion. So this bill, when taken cumulatively, increases total Federal expenditures by roughly 50%. Despite the size of the package, concerns have already been voiced that it doesn’t go far enough. On that point, government officials (including President Trump) have already signaled that they would be open to additional future measures if needed.
The package cuts across numerous segments of the economy – a breakdown of the $2.2 trillion includes the following:
- Loans, guarantees and investments to large businesses and local government loans: $500 billion
- Small business assistance: $350 billion
- Direct payments to individuals and families: $290 billion
- Tax reductions for businesses: $280 billion
- Expanded unemployment benefits: $260 billion
- Health spending: $180 billion
- Aid to state and local governments: $175 billion
contact your Withum advisor or a member of Withum’s Tax Services Group.
The $500 billion in advances to large businesses and local governments includes $25 billion for passenger airline carriers, $4 billion for cargo air carriers, $3 billion for industry contractors and $17 billion for businesses that are designated as working in national security. It also includes restrictions on share buy-backs, dividend payments and executive compensation for those companies receiving assistance.
The $350 billion in small business assistance includes loans that can be forgiven if the borrower uses them for payroll, rent and utilities, and does not reduce payroll.
As the old saying goes…”the devil is in the details.” Withum’s COVID-19 team will continue to stay on top of these emerging developments to bring you additional details on the above.
COVID-19 Resource Center