On December 21, Congress passed a much anticipated second stimulus package, and President Trump signed it on December 27. The $600 billion package helps those experiencing COVID-related financial hardship, including businesses, hospitals, families, and individuals.
While this second stimulus package is smaller than what we saw in March, it still far surpasses the Americans In Economic Stimulus Act of 2008 - which offered $168 billion in relief to individuals and businesses.
This historic bill is only part of a larger $1.4 trillion spending package and contains a staggering 5,600 pages. Below are some highlights of the bill’s coronavirus-related relief efforts that could affect you, your family, and your business.
Unemployment benefits established in the original CARES Act expired on December 31. With the newly passed act, unemployment benefits were extended, and recipients will receive an additional $300 in federal unemployment benefits for 11 more weeks.
The CARES Act also established a pandemic unemployment assistance (PUA) program to offer unemployment benefits to those who have previously not been eligible, including those who have been furloughed by their employer, freelancers, and gig workers (such as Uber or Lyft drivers). Their benefits have also been extended for an additional 11 weeks.
Similar to the CARES Act, eligible American taxpayers with incomes up to $75,000 received direct stimulus payments of $600 as part of the new bill, while families with children received an additional $600 per child.
Paycheck Protection Program & Small Business Loans
A popular program throughout the pandemic, the Paycheck Protection Program got a much-needed boost, allowing it to continue operating in 2021 - to the tune of around $284 billion. As a reminder, the PPP offers businesses under 500 people assistance in the form of forgivable loans that help cover payroll and other necessary operating expenses.
Not seen in the CARES Act, this new package includes a “Save Our Stages Act,” which offers cultural centers, theaters, and other live performance venues $15 billion in government assistance.
A point of contention for several months, schools across the country had to make a very tough decision - continue virtual learning or bring kids back for in-person classes? Money appointed to schools in the initial CARES Act largely went to increasing technology capabilities for virtual learning and emergency financial aid grants to college students.
Around $82 billion was allocated for the Elementary and Secondary School Emergency Relief Fund and the Higher Education Emergency Relief Fund.
COVID-19 Vaccination Distribution and Testing
The FDA approved two COVID-19 vaccines in December, and distribution is ongoing. Approximately $69 billion of the stimulus package is for vaccination procurement and delivery and statewide testing-and-tracing measures.
The stimulus bill extended the CDC’s moratorium on rent evictions through the end of January.
For the millions of Americans past-due on their rent payments, the stimulus package included $25 billion in rental assistance for qualified families and individuals.
Food Assistance Programs
Food assistance programs, like SNAP, received around $13 billion in federal assistance.
For many, the passing of the second stimulus package may have felt like a Christmas miracle. For others, the benefits fell short of expectations. Of note, President Joe Biden has made it clear that this will not be the end of government assistance amidst the COVID-19 pandemic.
On December 22, he tweeted, “I applaud this relief package, but our work is far from over. Starting in the new year, Congress will need to immediately get to work on support for our COVID-19 plan.”
Erickson Braund is the Founder and Chief Financial Officer at Black Walnut Wealth Management. He is a Certified Financial Planner®️ professional and a Chartered Retirement Planning Counselor®️. Eric brings over 20 years of experience working with high net-worth individuals and families, helping them achieve their goals of protecting and growing their wealth for retirement and for generations to come. Because Eric is a CFP®️ professional, he adheres to high ethical standards and engages in at least 30 hours of approved continuing education in the financial industry each year.
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