Here's What New Yorkers Need To Know About The $2 Trillion Coronavirus Relief Bill

The COVID-19 pandemic has delivered an unfathomable blow to the economy, and tens of millions of Americans are struggling to figure out how they are going to survive without steady income. On Wednesday night, the U.S. Senate passed a $2 trillion stimulus package, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). It is the largest bill of its kind in modern history, though it is only intended to keep the economy afloat for a few months. The House is expected to pass the legislation on Friday [Update: It passed]. So how will the stimulus package help you make ends meet? What does the bill do for New York's struggling hospital and transit systems? And which corporations are getting bailed out in the process?

What this money means for You.

For most Americans, the economic package offers two primary means of relief: a one-time direct cash payment and a significant extension of unemployment insurance.

Assuming the bill passes the House as expected, single people with a social security number earning under $75,000 and married couples with a combined income up to $150,000 will soon receive a one-time check of $1,200. Parents who meet that standard will get an additional $500 per child up to 16 years old.

The value of the check tapers down as income increases, phasing out entirely for individuals earning more than $99,000 or joint taxpayers making over $198,000. The income guidelines are based on adjusted gross income — line 8b of your most recent federal tax return. (The Washington Post has a tool for you to find out how much you might be getting.)

Anyone with direct deposit set up through the IRS should expect their checks in the coming weeks, according to Secretary of Treasury Steve Mnuchin, although those who don't may be forced to wait significantly longer. But regardless of when the money does come through, some economic policy experts say the total is nowhere near sufficient, particularly for New Yorkers who are still expected to make rent in six days.

"It's really a miserly amount compared to what's being provided by European social democracies and what the actual need is among every day New Yorkers," said Mike Kink, an attorney with the Center for Popular Democracy and executive director of the Strong Economy For All Coalition. "In New York, rent is a life or death issue, and $1,200 doesn't even begin to cut it for most people."

Unlike the previous House legislation, the Senate version explicitly excludes undocumented immigrants and mixed status families, including those who pay taxes. The direct cash assistance also does not appear to apply to those who earned above the top salary last year, but now face a loss of income due to coronavirus.

The second prong of the massive economic package is more consequential. It will extend benefits to the staggering number of people left jobless by recent measures to stop the spread of the novel coronavirus. In New York alone, applications have surged more than 460 percent in the last week, not including the many who have been unable to file due to ongoing breakdowns with the state Department of Labor's system.

Under the Senate bill, those accessing unemployment will receive $600 on top of their weekly benefits for up to four months. The benefit will be broadened to include those who don’t typically qualify for unemployment, including part-time workers, gig workers, and freelancers experiencing financial hardship due to COVID-19.

Additional unemployment benefits will be available for 39 weeks, which should carry workers through the end of 2020.

The initial base pay depends on both previous income and state. In New York, weekly benefits are capped at $504 per week. By comparison, New Jersey maxes out at $681. The extra $600 benefit would come on top of that base pay figure, though states may elect to send out the portions separately.

According to Greg LeRoy, the executive director of Good Jobs First, a group that tracks and analyzes corporate subsidies and advocates for government accountability, the expansion will help workers in the many states that have narrowed their eligibility requirements for unemployment insurance in the years since the last financial meltdown.

“We're back to where we were in ‘07 and ‘08 of getting the states to re-reform their [unemployment insurance] rules,” he told Gothamist. “The good news is that the Democrats prevailed on getting lots of money on the social safety net system to expand coverage and benefits for unemployment insurance.”

“Obviously there's more to be done on it,” he added.

What about New York state? Don't we have a budget deficit already?

Between individual relief, the government, and corporations, New York has been allocated at least $40 billion of the $2 trillion stimulus bill. Senator Chuck Schumer said billions more would be allocated soon—but the first $40 billion is intended as immediate relief.

About $150 billion nationwide will go to city and state governments. Of the $7.5 billion that goes to New York, about 55 percent will go towards the state government, or about $4.1 billion. $1.4 billion goes to New York City, $159 million for Erie County, $235 million for Nassau County, and $257 million for Suffolk County. Monroe and Westchester Counties will receive $129 million and $168 million, respectively.

The bill also includes $4.3 billion for our state's transit systems—including about $3.8 billion for the MTA alone, which the transit agency had previously requested. The money would go towards making up lost revenue due to the ridership drops as well as costs for increased cleaning. The Port Authority will get $680 million. The National Guard gets $1.5 billion nationwide; New York has about 2,200 members that are already being used during the crisis.

But both Mayor Bill de Blasio and Governor Andrew Cuomo have criticized the bill for offering up far too little to our city and state governments, given that New York is at the epicenter of the COVID-19 pandemic in the United States.

“They gave us less than 1 percent of the money that they were giving out to cities and states, and we have a third of the cases in the nation—that is just immoral,” de Blasio said during a press conference on Wednesday, referencing the $1.4 billion allocated to city government. He largely blamed Senator Mitch McConnell for blocking “real aid” to the city and state.

Governor Cuomo called the bill “terrible.”

His spokesperson Dani Lever went further in a statement. “Literally 48 states get a higher percentage in funding than New York State," Lever said, calculating off initial reports the state would receive $3.1 billion. "It is just another case of politics over sound policy."

Senators Chuck Schumer and Kirsten Gillibrand defended the bill as a first step of immediate relief.

“It’s a very strong amount of money for New York,” Schumer said during a press call on Wednesday. “Obviously we have great needs. Obviously we could always use more...$40 billion is nothing to sneeze at.”

Gillibrand added, "This is essential to keep our hospitals running, families putting food on their table, and to allay fears and concerns, and to get this medical supplies pipeline up and running so our hospitals can get where they need."

Cuomo said on Wednesday the state is anticipating $9 billion to $15 billion in shortfalls due to COVID-19—already building on a $6 billion budget hole the governor faced before the crisis.

A chief economist with the Fiscal Policy Institute, Jonas Shaende, told Gothamist the $15 billion deficit estimate is no doubt a scary figure—but he said it represents the worst case scenario for the state.

“Incomes are not lost to the extent the most dire scenario [of $15 billion] suggests,” Shaende told Gothamist.

“The economic challenge we have in the state is, of course, a serious one,” he said, but added, “We need to seek new revenues to sustain the types of services we have and to take care of vulnerable populations.” The state should consider balancing the budget with a wealth tax on billionaires and multi-millionaires or the pied-a-terre tax on luxury, second homes, Shaende said.

What about our struggling hospitals?

Nationwide, $150 billion will go towards hospitals and medical facilities for purchasing equipment—from desperately needed ventilators to masks and gloves.

That cash is “flexible,” Schumer said, since it would also cover building new hospital beds or paying for nurses’ childcare, for example.

The funding would also increase Medicare payments to hospitals. According to the Greater New York Hospital Association, the bill also delays various Medicaid and Medicare cuts for much of the rest of the year.

Schumer's office said $25 billion will begin "flowing to New York right away" for hospital and medical facilities.

The association said in a letter to its members it was “pleased that Congress took action to ensure that health care providers receive the COVID-19 support they need,” but said the “scale of the crisis” would require hospital needs to be assessed again.

“Hospitals are already losing tens of billions of dollars from cancelled elective procedures, treating COVID-19 patients, purchasing massive amounts of personal protection equipment (PPE), and meeting elevated staffing needs,” the association wrote.

The bill increases how much equipment in the national stockpile is available to providers, according to the association and Gillibrand.

“We now have the resources through this emergency basis to get medical equipment streamlined from the federal government so the military can put forward the 8 million masks they have in reserve. They have several thousand ventilators in reserve,” Gillibrand said. “New York will get the lion’s share because we have the most cases right now. And then they can be moved from state to state to state.”

Does the bill help small businesses?

Some $375 billion in small business loans will be made available nationwide, according to Schumer’s office. 

The loans could be forgivable if a business is unable to pay it back. The money will be distributed through the existing Small Business Administration framework.

Non-profit organizations—which are typically excluded from such loan programs—can also apply, according to the bill. The bill says sole-proprietors and independent contractors are also eligible, so long as such owners have payroll tax filings.

Those with fewer than 500 employees are eligible for the loans, which could be used for payroll, healthcare and sick leave costs, salaries, rent, utilities, or debt obligations, according to the bill.

Businesses with existing loans through the SBA would have payments on them suspended as well–and instead pay the interest, fees, or principals for a 6-month period.

“A great deal of money being pumped into Wall Street right now.”

The stimulus legislation gives Steve Mnuchin’s Treasury Department $500,000,000,000 (that’s $500 BILLION) to loan out to various states and corporations as they see fit. A huge portion of that money is “for the purpose of providing liquidity to the financial system,”

“The Trump administration will now control a fund worth $500 billion that the Federal Reserve can leverage into $5 trillion in lending, a figure equal to a quarter of normal U.S. economic output,” Lisa Donner, the executive director for the nonpartisan Americans For Financial Reform, said in a statement. “The legislation includes few real restrictions on most of this fund, leaving the door open for this massive amount of money to inflate corporate bottom lines without benefiting ordinary people hurt by the pandemic.”

The stimulus bill comes days after the Federal Reserve announced that the government would be buying $200 billion worth of “BBB grade” risky corporate debt, the same kind of debt that banks and financial firms loaded up on before the great crash of 2007.

“It's clearly a great deal of money being pumped into Wall Street right now,” said Greg LeRoy, the executive director of Good Jobs First. “The predicted trigger, which is excessive corporate debt, is getting bailed out here.”

LeRoy said he was heartened by some of the strings attached to companies that take the money: they must have a 90 percent employee retention rate through the end of September 2020, they cannot violate collective bargaining agreements, they must remain neutral if their workers decide to form a union, they cannot offshore their workforce for the period of the loan and for two years after it’s paid off.

No stock dividends are to be paid during the term of the loan, and companies can’t buy back their own stock to inflate the price until a year after the loan is paid. The bill also prevents President Donald Trump and members of his administration from taking the assistance. Executive compensation is capped at $3 million plus 50 percent of whatever they were earning above that number. Medium-sized businesses, defined as those having between 500 and 10,000 employees, are also eligible for the loans.

“The carrots in the stimulus for worker retention are a pro-business, pro-labor device that every rational business should be celebrating,” LeRoy said.

While the bill creates an Inspector General and Congressional oversight committee to track the money, it doesn’t go as far as to pledge to publish where the money is going on the internet for the public to see, as President Barack Obama’s stimulus bill did.

“I dont view [Mnuchin] as a person I would want to oversee a tidy recovery,” LeRoy said.

The giant pot of money has two very specific beneficiaries.

The passenger airline industry is getting $50 billion—$25 billion in loans, and $25 billion that must be used to pay their employee’s wages. Cargo carriers are getting $8 billion, with $4 billion directly for wages, and airline contractors are getting $3 billion to pay their employees’ wages.

Tim Wu, a law professor at Columbia University, had recently argued in the Times that the airline industry’s long record of share buybacks to inflate stock prices and charging exorbitant fees for smaller and smaller seats meant that airline companies should be forced to reform if they take bailout money, but none of those provisions are found in the legislation.

Another $17 billion in loans are earmarked for “businesses critical to maintaining national security,” a phrase widely understood to reference Boeing.

Boeing employs 160,000 people as one of the country’s largest government contractors, and the company contributed $1 million to Trump’s inauguration fund. Earlier this month, the Federal Aviation Association recommended issuing the company a $20 million fine after a Congressional oversight committee concluded that Boeing overlooked safety concerns to rush out the production of a plane that was later involved in two crashes that killed 346 people.

“It was coming along well, and then all or a sudden this hits,” Trump said of Boeing at a press conference earlier this month. “So we’ll be helping Boeing.”