On Saturday afternoon, March 6th, the Senate passed the COVID-19 relief plan, which contains $1.9 trillion in financial assistance and aid for American families. The plan, which has amendments from the bill previously passed by the House of Representatives, must go back to the House for a final vote. It is expected to be voted on and approved by the House Tuesday, and from there it will go to President Biden for approval. While there were some changes, it is largely the same as the original program proposed by President Biden in January.
- Up to $1,400 in additional stimulus checks for those qualifying, plus $1,400 per eligible dependent – payments are targeted to lower and middle-income households
- Extension of $300 a week unemployment benefits until September 6th
- Tax relief on first $10,200 in unemployment benefits for households earning up to $150,000, applicable for the 2020 tax year
- Child-care tax credit up to $3,000 per child ($3,600 for children under 6) for 2021
- Expansion of Earned Income Tax Credit (EITC)
- Federal moratorium on evictions and foreclosures until the end of September
- Health insurance subsidies and elimination of the maximum income cap on the Affordable Care Act for two years
- Allocation to aid those with food insecurity, extending a 15% increase in food stamp benefits through September and $880 million for Women, Infants, and Children (WIC)
- Assistance to facilitate children returning to in-person schooling
- Aid to childcare providers to help with overhead, provide assistance to families unable to pay and purchase personal protective equipment, etc.
- Additional aid to small businesses through the Paycheck Protection Program (PPP) and other programs
- Funding to support expansion of coronavirus response, including testing, vaccination, contact tracing, and mitigation
- Assistance to rural public health care workers
- Funding to allow states to continue to provide free- and reduced-price meals through the summer to children whose schools are closed
- Housing aid to assist low-income households with rent assistance and utility bills
- Aid to assist those who are homeless or at risk of homelessness
We will be watching the markets carefully and anticipate that the response will be positive, particularly when considered in concert with recent good news on downward trending COVID-19 cases plus increased vaccine supply. However, given that the plan has been in the works since January, it is likely that expectations for a stimulus program have been partly incorporated into the market already. The reaction, therefore, could be less than or more short-lived than expected. We will continue to monitor the changing situation but are optimistic regarding a resumption to normality during the latter half of 2021.