One of the centerpieces of the new economic aid package -- the Coronavirus Aid, Relief, and Economic Security (CARES) Act -- is direct payments to individuals. As we discussed the other day, these are $1,200 payments -- with an additional $500 per child under the age of 17 -- that will go to Americans with an annual income up to $75,000.
The value of payments will decrease from there -- subtract $5 for every $100 in income above $75,000 -- before capping out at $99,000. As NBC News' report added the phase-out range for married couples is $150,000 to $198,000.
These direct payments are not based on employment status: those who qualify will get the money, whether they're fully employed or not.
But it wasn't long before a hurdle emerged for a big chunk of the population: the Treasury Department said Social Security beneficiaries who ordinarily don't file tax returns would need to do extra paperwork to get their $1,200 check. It seemed like an odd policy, especially since these Americans are already in the system -- by virtue of the fact that they're already Social Security beneficiaries.
Yesterday, as NBC News reported, the administration reversed course.
The Trump administration backtracked Wednesday evening on new rules for getting stimulus checks, saying Social Security recipients won't have to file a tax return to receive a payment. The move is a response to pressure from elderly Americans and senators to rescind guidance issued Monday that said seniors needed to file a return to get the checks of up to $1,200, even if they weren't ordinarily required to file taxes.
By some estimates, we're talking about 15 million seniors who will now get direct payments. Since the point is to get money into Americans' hands quickly, Treasury's reversal on this is welcome news.
And speaking of welcome news related to economic aid, New York's Eric Levitz did a nice job summarizing the latest details on the implementation of the Paycheck Protection Program, which is poised to kick in this week.
If you are a company, nonprofit, veterans organization, or tribal concern with 500 or fewer employees -- or else, a self-employed individual or independent contractor -- the government will provide you with a loan equivalent to eight weeks of your prior average payroll (or, for the self-employed, earnings), plus an additional 25 percent of that sum (unless that grand total adds up to more than $10 million, which is the cap for any individual firm). You do not need to make any payments on that loan for six months. And if you maintain your workforce, then the government will entirely forgive the portion of the loan spent on payroll, benefits, utilities, rent, mortgage payments, or other debts. In other words, it will forgive more or less all of it.
So what's the bad news? The CARES Act set aside nearly $350 billion for this, and if small businesses are aggressive in taking full advantage of the program -- and I really hope that they are -- that pool of funding will probably dry up fairly quickly.
That said, the Paycheck Protection Program was wildly popular on Capitol Hill when the package was coming together, and Treasury Secretary Steven Mnuchin said on CNBC yesterday that he's ready to go back to Congress to secure more money for this if the pool is depleted.
There's no denying the scope and scale of the ongoing economic catastrophe, as we were reminded this morning with the absolutely brutal new report on initial unemployment filings. That said, between the direct payments, the enhanced unemployment benefits, and measures such as the Paycheck Protection Program, the CARES Act is poised to make a real difference for millions of people who need it.