Days of negotiations between the Trump administration and Congress — and fierce lobbying by industries eager for assistance dealing with the coronavirus outbreak — has yielded a rescue package worth more than $2 trillion in spending and tax breaks.
The plan would include about $500 billion in loans and assistance for larger companies, as well as states and cities, according to the latest drafts being circulated. But the aid comes with strings attached after pressure from Democrats.
Emergency aid for farmers
The stimulus package includes up to $23.5 billion in farm aid. It would provide $9.5 billion in emergency funds for agriculture, including livestock producers and growers of specialty crops such as fruits and vegetables.
And it would authorize $14 billion in new borrowing authority for the U.S. Agriculture Department’s Commodity Credit Corp., a Depression-era entity the Trump administration has used for its farm-bailout programs the past two years.
Agriculture groups including the American Farm Bureau Federation, the United Fresh Produce Association and livestock groups had sought aid in the stimulus package.
“Congress has taken an important first step to helping farmers and local and regional food systems with this relief bill,” Eric Deeble, policy director at the National Sustainable Agriculture Coalition, said in a news release. “As a result of the ongoing COVID-19 crisis and ‘social distancing’ restrictions, we expect farmers who have lost access to direct markets — like farmers markets, schools, and restaurants — stand to lose more than $1 billion in sales this year.”
National Pork Producers Council President Howard "A.V." Roth, a pork producer from Wauzeka, Wisconsin, said financial setbacks from the virus “come on the heels of two very difficult years during which pork was at the tip of the trade retaliation spear. We are pleased that the stimulus package includes funding for much-needed relief to livestock farmers."
Oil industry, renewables both lose
A $3 billion provision in the original GOP bill to buy oil for the nation’s Strategic Petroleum Reserve was cut by negotiators. The funding for the emergency stockpiles had been requested by the Trump administration for the purchase of up to 77 million barrels of crude oil to support the domestic industry and boost reserves at cheap prices.
Democrats sought to add billions in funding for clean energy in exchange and in the end both were scuttled. But the issue could arise as Congress takes up additional coronavirus-related legislation in coming weeks.
The omission of expanded tax incentives for renewable energy and spending on green infrastructure is a blow to advocates of solar, wind and electric vehicles who worry that a buildup of new federal debt from stimulus spending will discourage green investment and lending in the future.
The measure disappointed renewable advocates, who are seeking more flexibility to claim existing credits as project timelines slip. Abigail Ross Hopper, head of the Solar Energy Industries Association, said that half of the industry’s jobs are at risk as a result of the pandemic.
Supporters of oil purchases said they still expected the acquisitions to take place. The Energy Department can use other agency funds and it can seek more money in future stimulus legislation.
Anne Bradbury, head of the American Exploration and Production Council that represents independent oil producers, said the group is “confident that DOE will be able to meet the president’s directive to purchase up to $3 billion in U.S.-produced crude.”
The package would provide direct payments to lower- and middle-income Americans of $1,200 for each adult, as well as $500 for each child.
Democrats were able to secure a change from a previous version that allows low-income taxpayers to get the full $1,200 payment. The initial plan would have given smaller checks, or in some cases, no money at all, to very-low income people.
Unemployment insurance payments were boosted and recipients would be eligible to receive those funds for an average of four months, up from three in the prior GOP plan. It also would extend eligibility to the self-employed and workers in the gig economy such as drivers for Uber Technologies Inc.
Money for hospitals
The legislation calls for $117 billion for hospitals and veterans’ health care, as well as $16 billion for personal protective equipment, ventilators and other medical supplies for federal and state response efforts. It also includes $11 billion for vaccines, therapeutics, diagnostics and other medical needs, and at least $250 million to improve the capacity of health-care facilities to respond to medical events, according to a summary by the Senate Appropriations Committee.
The bill would require insurers to cover tests for COVID-19. Any vaccines or other preventive services would have to be covered with no cost-sharing.
The hospital industry supported the measure for providing emergency funds, boosting payments and suspending some funding cuts. But “more will need to be done to deal with the unprecedented challenge of this virus,” Rick Pollack, head of the American Hospital Association, said in a statement.
Companies receiving a government loan would be subject to a ban on stock buybacks through the term of the loan plus one additional year. They also would have to limit executive bonuses and take steps to protect workers. The Treasury Department would have to disclose the terms of loans or other aid, and a new Treasury inspector general would oversee the lending program.
“We see it as an important win,” said Austen Jensen of the Retail Industry Leaders Association.
Jensen said he hopes “necessary” oversight measures won’t delay “getting this capital out into the businesses.”
Struggling U.S. airlines would be eligible to receive federal loans and direct cash assistance if they are willing to give an option for an ownership stake to the government.
The program allocates $25 billion to passenger carriers and $3 billion to airline contractors providing ground staff such as caterers, while cargo haulers would see $4 billion.
The addition of direct cash relief — earmarked specifically for payrolls — was sought by airline and industry unions, which feared massive job losses if loans were the only option.
Other transportation winners include rail and transit operators. Amtrak would get $1.02 billion to cover coronavirus-related revenue losses and support state-funded routes. State and local transit agencies would get $25 billion for operating and capital expenses.