Details on the HEALS Act

    Congress and the White House are still debating whether the HEALS Act, HEROES Act – or some compromise Act in between – will deliver the next round of coronavirus relief to a wobbly American economy, but at least they’ve set a deadline.

    Well, sort of a deadline.

    Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows have been meeting daily with Democratic leaders Rep. Nancy Pelosi (D-Calif.) and Sen. Chuck Schumer (D-NY.) and hope to get an agreement on the latest round of coronavirus relief before the Senate goes on a one-month vacation Aug. 7. The House went on vacation July 31.

    Meanwhile, millions of unemployed Americans anxiously await answers on some key elements that appear or don’t appear in the HEALS Act and HEROES Act. The questions include:

    • Will some form of the $600 weekly enhanced unemployment benefit be offered?
    • Are restrictions against rent evictions and home foreclosures going to be brought back?
    • When will the agreed upon $1,200 second stimulus check be sent to consumers desperate to keep up with bills?
    • Will businesses, health care centers and schools get liability protection from lawsuits related to COVID-19?

    While polls indicate that Americans strongly favor the proposals, at least the first three, the parties negotiating the deal are content to go back-and-forth without much urgency.

    “They made some concessions, which we appreciated,” Schumer said of Tuesday’s negotiations. “We made some concessions which they appreciated. We’re still far away on a lot of the important issues, but we’re continuing.”

    At least one prominent side in the discussions appears to be losing interest in the outcome.

    Senate Majority Leader Mitch McConnell (R-Ky.) isn’t participating in the negotiations, having handed the lead role to Mnuchin and Meadows. McConnell, who boldly claimed that any COVID-19 related legislation that passed would come from the Senate side, now says he’ll accept whatever deal Mnuchin/Meadows make with Pelosi/Schumer.

    And he’s not impressed with the way the Democrats are negotiating.

    “It’s like they expect applause for merely keeping a civil tone with the president’s team,” McConnell said. “Never mind they’re still obstructing any action. Not a dime for kids, jobs and health care unless the administration will let them check off every left-wing lobbyist’s Christmas list five months early.”

    This comes after McConnell failed to unite Republican senators behind the $1 trillion HEALS Act he presented them last week as a counter measure to the $3.5 trillion HEROES Act the House of Representative passed on May 15.

    “If you’re looking for a total consensus among Republican senators, you’re not going to find it,” McConnell said.

    When Will the Senate Vote on the HEALS Act?

    They would like to vote by Aug. 7, but that sounds like wishful thinking at this time. While McConnell is not involved in negotiations, he’s still going to have to convince Republican senators to go along with something many want no part of.

    At least 20 or so fiscal conservatives have said they don’t want to spend any more for COVID-19 relief, but there is a strong feeling among the rest of the Republicans, especially those up for re-election in November, that they need to pass a bill.

    Quickly.

    “This is the most important thing we need to be doing,” Sen. John Cornyn of Texas said. “How do you think it looks for us to be back home when this is unresolved.”

    Schumer sounded like Aug. 7 was an unrealistic deadline and that Senators may have to stay in Washington another week to get something done.

    “The gap between our two parties in the negotiations is about priorities and about scale,” he said on the Senate floor Tuesday. “This disease has washed over our country like a great flood and Republicans are acting like we need to fix a leaky faucet.”

    The House left Washington July 31 for a five-week vacation. The Senate is scheduled to take off for four weeks on Aug. 7. Bridging the $2 trillion chasm by Friday is a tall order for a Congress that can’t agree whether it’s raining outside.

    While it doesn’t seem possible that Senators could go home without holding a vote on the HEALS Act, it may happen. McConnell would be the one to call for a vote and he hardly sounds enthusiastic. If he doesn’t, that would mean the next opportunity wouldn’t come until both houses of Congress return to work Sept. 8. They could use the month off to ask constituents at home how they feel about this round of relief.

    And don’t forget: Even if both sides reach an agreement and pass a compromise bill, it still has to be signed by President Trump before becoming law.

    What Is in the HEALS Act?

    The answer that matters to most Americans is: Yes, it will include another $1,200 stimulus check for adults making less than $75,000.

    Beyond that, there is:

    • Reduction of unemployment benefits to $200 a week
    • $100 billion in funding for education
    • About $190 billion in renewed funding for the Paycheck Protection Program and tax incentives to help small businesses
    • Five years of liability protection for covid-related lawsuits against businesses, schools, and health care companies
    • Extension of forbearance payments for federally backed mortgages
    • Funding for more coronavirus testing
    • Tax deduction for meals

    Below is a more detailed description about what is and isn’t in the bill.

    A Second Stimulus Check

    second stimulus check is coming for sure. There isn’t even an argument here, except how much eligible children qualify for. The Republican proposal is identical to the one the CARES Act passed last March. Repeating the same conditions has nearly unanimous backing from all sides.

    That means another $1,200 direct payment to adults in the U.S. making less than $75,000. Those making between $75,000 and $99,000 will receive a scaled back amount that will be reduced by $5 for every $100 of income. It ends with $0 going to someone making $99,000.

    The HEALS Act says up to three dependent children, regardless of age, will receive $500 each. College age and adult dependent children were shut out of the first round of stimulus checks, but not this time.

    Supplemental Unemployment Insurance Check

    This will be the most difficult battle for both sides to win because they are miles apart on how to assist the 20 million people unemployed because of COVID-19.

    The Senate’s HEALS Act aims to reduce the amount of federal unemployment benefits to from $600 a week to $200 a week. That will last until Sept. 30 and be replaced by a formula that would cap unemployment benefits at 70% of the worker’s regular weekly pay.

    Republicans said the $600 supplement was a disincentive for people to return to work, especially those who made more money being unemployed than they did working.

    “I think workers and Americans understand the concept that you shouldn’t be paid more to stay home than to work,” Treasury Secretary Mnuchin said.

    There could be problems implementing the Republican proposal because it will be difficult in many cases (especially hourly workers) to determine exactly what a worker’s weekly salary is. An even more daunting problem is that many states use antiquated computer systems to deal with unemployment. Updating them would be time consuming and costly.

    Mnuchin, who pushed hard for the reduced benefits, admitted there could be problems.

    “We’re dealing with the mechanical issues associated with that,” Mnuchin said. “Some states can implement this quickly. Some states will take time.”

    Cap on Student Loan Payments

    The HEALS Act tells student loan borrowers that if they don’t have an income, they won’t have to make a student loan payment. And when they do get an income, their student loan payment can’t rise above 10% of income after deductions are made for food, housing, clothing, transportation and other necessities of life.

    Mortgage Assistance

    People who lost their jobs because of the coronavirus, and thus their ability to make mortgage payments, were given a reprieve in the CARES Act passed last March. The HEALS Act will extend the provision that allows homeowners to pause payments or lower their monthly payment, without penalty.

    Paycheck Protection Program

    This program was enormously popular in the CARES Act and will become even more popular this time around because if focuses even tighter on small businesses. It also separates “first time borrowers” from those businesses that already received PPP loans back in March, but need it again.

    For example, businesses that received a PPP loan in the first round, can apply again, but only if they have less than 300 employees. Second-time borrowers must show that they experienced a 50% reduction in gross revenues. And second-timers can only borrow up to $2 million this time.

    The original parameters are still there for first time borrowers, meaning your business has less than 500 employees; you can borrow up to $10 million or 2.5 times average total monthly costs; and you must attest your business was affected by COVID-19.

    Either borrower can use the money for renovations needed to comply with CDC safety guidelines and personal protective equipment.

    Liability Protection

    This is another of the lesser-discussed issues, but one that is ultra-important to McConnell. He wants a five-year moratorium on coronavirus-related lawsuits against businesses, health care centers and schools.

    McConnell has made this a “must” part of any compromise bill. “Let me make it clear, there won’t be a bill that passes the Senate that doesn’t have this in it,” McConnell said.

    Funding for Schools

    The HEALS Act sets aside $105 billion for schools, with added money going to schools that re-open as scheduled this fall.

    The first $70 billion of money would go for schools K-12. Schools that open on time would get extra money so they can prepare to open safely. Colleges and universities would get the next $30 billion and then $5 billion would be set aside for flexible funding used by governors for any level of education.

    Is There More?

    Oh yes! The HEALS Act has small provisions that may or may not affect American consumers trying to survive in a pandemic.

    For example, the HEALS Act does include provisions for $1.75 billion to rebuild FBI headquarters, which may seem odd in a coronavirus relief package. The headquarters is located directly across the street from President Trump’s luxury hotel in downtown Washington D.C., and was a late addition to the bill at the urging of the White House.

    No word from the Democrats on whether they will support it.

    HEALS Act vs. HEROES Act

    The two acronyms might be easily confused, so to set the record straight: The HEALS Act is an economic stimulus bill proposed by Senate Republicans. The HEROES Act is an economic stimulus bill proposed by Democrats in the House of Representatives. Both parties will work toward a comprise using the components of each bill as a starting point for negotiations.

    So, what was left out of the HEALS Act?

    Plenty, if you’re a supporter of the $3 trillion HEROES Act that was passed by the Democratic-controlled House of Representatives two months ago. Their wish-list provides $2 trillion more in federal money to help with hazard pay; funding for cities and states; rental assistance and the always popular student loan forgiveness.

    Here’s a look at how each one of those provisions in the HEROES Act compares against the HEALS Act.

    Hazard Pay

    The issue of “Hazard Pay” for essential workers is another potential dealbreaker. Democrats put $200 billion into their HEROES Act to help companies offer “Hazard Pay.” Doctors, nurses, police officers, social workers, grocery clerks – and many other occupations – would qualify for bonus pay that could reach $10,000.

    The HEALS Act has no mention of Hazard Pay.

    Funding for Cities and States

    This is huge in every way for the Democrats and their HEROES Act. The HEROES Act provides $1 trillion to cities and states to help them make up for tax revenue lost because of the coronavirus. They say the money would shore up gaping holes in city and state budgets and would impact everything from paying the local police to keeping state parks open.

    The HEALS Act does not have a dollar budgeted for cities or states. Instead, it offers more flexibility for spending the $150 billion still there from the first relief bill back in March.

    Rental Assistance

    The HEROES Act asks for $100 billion in rental assistance for the estimated 44-million renters in the U.S. The money would be used to reimburse landlords, some of whom have been waiting four months for tenants to pay their rent

    Republicans aren’t as keen on continuing to provide protection for renters in danger of eviction. After saying Sunday that the HEALS Act would extend eviction protection for renters, the White House suddenly withdrew its support Monday and so did Senate Republicans.

    Student Loan Forgiveness

    The Heroes Act is a dream-come-true for student loan borrowers, who would not only get a 12-month suspension on payments and interest, but also would get $10,000 of loan forgiveness if they were experiencing economic distress because of COVID-19.

    The HEALS Act offers students the option of repaying student loans on the 10-year plan or signing up for Income Based Repayment that could mean $0 monthly payments, if you’re not working.

    Where Will This End?

    It’s really hard to guess which side will cave in and allow provisions in a compromise bill that they said they would never allow in their original plan.  The Democrats seem to have the upper hand because they came out first and they took some mighty cuts.

    But Republicans can play the “fiscal responsibility” card and moan about the impact on the deficit and how this will cripple future generations and … well, moaning goes a long way in any argument.

    The guess here is that the two sides will be “extremely close” when the Aug. 7 deadline arrives, needing only the Democrats to come off their fantasy dream of $1 trillion to cities and states in return for the Republicans agreeing to a weekly unemployment supplement of $400 a week.

    They’ll all go home for town meetings in their district/state and come back on Sept. 8 with a clear direction from the voters: DO SOMETHING!

    We’ll have to wait and see what “something” is.

    Author

    Bill Fay
    Staff Writer

    Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at bfay@debt.org.

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