The $1.9 trillion stimulus bill passed by the U.S. Senate over the weekend and expected to be passed by the House Tuesday includes $55 billion in assistance to business as part of its effort to shore up the still-struggling pandemic-hit economy.
Although much of the news focus is on the $1,400 direct assistance payments to households and money for ramping up testing and vaccinations, assistance to hard-hit businesses is a small but significant part of the package.
More than in the previous stimulus packages, the bill singles out sectors hit hardest by the pandemic, including restaurants.
The bill includes $28.6 billion for grants, capped at $5 million each, for restaurants and bars to meet payroll and other expenses. Another $1.25 billion is included in shuttered venue operator grants, which go to live-event companies that had to shut down following in-person gathering restrictions.
The aviation industry also gets targeted help. The bill provides a dollar-for-dollar match, up to $3 billion total, to help carriers and manufacturers pay their employees as product and service demand dropped due to travel restrictions.
The bill also adds money to existing sources of help including $15 billion for emergency injury disaster loans (EIDLs) and $7.25 billion for paycheck protection program (PPP) loans, both of which are administered by the Small Business Administration.
Despite the additional PPP funds, the program is scheduled to expire at the end of March, although the House could include an extension, possibly to the end of June. That's the new deadline the Federal Reserve announced yesterday for its PPP liquidity facility, which suggests the agency is anticipating an extension of PPP loans to that date.
PPP has plenty of money available. As of last month, only about $73 billion in second-round loans have been made, about a quarter of the $284 billion in funds that were authorized when that round was enacted at the end of last year.
The additional EIDL funding includes several set-asides to help ensure small, hard-hit businesses in economically disadvantaged areas get priority access.
To help companies take advantage, the bill creates a community navigator program, in which $175 million will go to helping companies get the full picture of what they qualify for and how to get the money.
Employee retention credit
The bill also extends, until December, a tax credit, enacted in the first stimulus bill last year, to encourage companies to keep their employees on the payroll even though they aren't needed because of lost business.
The credit is refundable and for up to $7,000 per employee per quarter. That means companies would qualify for up to $28,000 per employee for 2019, and up to $33,000 per employee for 2020.
Companies are eligible for the 2019 credit if their business was at least partially shut down because of the pandemic or saw a drop of at least 20% in quarterly gross receipts, compared to the same quarter in 2019. For the 2020 credit, companies have to show a 50% drop in gross receipts.
Should the House pass the bill Tuesday, as expected, it goes to President Biden for his signature. He's expected to sign it no later than March 14, the date federal emergency unemployment benefits would expire if they're not renewed.
"Everything in this package is designed to ease the suffering," Biden said March 6 after Senate passage.
The vote was along party lines, 50-49.
"The Senate has never spent $2 trillion in a more haphazard or less rigorous way," Senate Minority Leader Mitch McConnell (R-Ky.) said. "Democrats inherited a tide that is already turning."