Wednesday, January 19, 2022

US Congress couldn't compromise on 2nd round of stimulus, halting unemployment insurance

August 14, 2020
<p>U.S. Congress fails to compromise on a second stimulus bill.</p>

U.S. Congress fails to compromise on a second stimulus bill.

Partisan gridlock and inaction on the part of the U.S. Congress will cause unemployment insurance to expire for millions of Americans out of work due to the COVID-19 pandemic.

With continued uncertainty, party leaders failed to compromise on two prominent relief proposals before the Senate adjourned on Aug. 7.

The Sen. Majority Leader Mitch McConnell-proposed Health, Economic Assistance, Liability Protection and Schools, or HEALS, Act is a Republican-backed $1 trillion economic stimulus bill in contrast to the $3 trillion relief proposal — the Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, Act — that passed the Democrat-led House of Representatives in May. 

While the proposals share some similarities, such as the continuance of unemployment benefits and another round of stimulus checks, they still differ on many issues. 

There are many services available to Michigan residents who may need assistance making ends meet during the pandemic.

Eligible persons in Clinton, Eaton and Ingham Counties may receive rent payment assistance. Those who need assistance must fill out an emergency relief fund application and show proof of rent.

Funds are also available for utility and other types of bills. To see if funds are still available and for a referral, call 211 or go to mi211.org.

Additionally, while the Lansing Board of Water & Light, or BWL, suspended utility shut-offs and collections for past due balances at the beginning of the pandemic, it is now offering services for customers to create flexible payment arrangements to pay their BWL bills.

The Lansing BWL's customer service department can be reached by calling 517-702-6006 or via email at customerservice@lbwl.com.

It is also possible to apply for state emergency relief through MI Bridges. Call 855-275-6424 or click here for bill payment assistance.

Additional Ingham County assistance services can be found here.

Unemployment insurance

Last week, President Donald Trump signed an executive order establishing the continuance of unemployment benefits at $400 per week to eligible claimants from the week ending Aug. 1.

According to the order, states have to contribute 25% of funds.

Both congressional proposals seek to extend payments to the tens of millions of Americans out of work, but payments under the Heals Act would be reduced from $600 to $200 per week. 

According to McConnell, Republicans want to continue a federal supplement to state unemployment insurance and will propose a weekly dollar amount eight times what was put in place during the Great Recession.

The Heroes Act, on the other hand, would extend unemployment benefits at the same $600 rate throughout Jan. 31, 2021. Those who are receiving Federal Pandemic Unemployment Compensation, or FPUC, would still be eligible to receive benefits until March 31, 2021. 

According to the Washington Post, Speaker of the House Nancy Pelosi said she would make the $600-per-week her starting point in negotiations with Republicans. 

“Let’s use our time to remove all doubt that we’re going to do the right thing by the American people, so they can meet the needs of their families,” Pelosi said at a press conference. “Everyone wants to talk about being family friendly — let’s not squawk about $600.” 

Stimulus checks

Both the Heals and Heroes Acts include provisions calling for another round of $1,200 stimulus checks for those who earned less than $75,000 in 2019. 

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College students and adult-age dependents were not eligible to receive money when the first round of stimulus checks were sent out in April. The Heals Act would provide $500 each for up to three dependents, according to debt.org

Those who make more than $75,000 but less than $99,000 would be entitled to a smaller portion of the rebate. 

The Heroes Act would pay $1,200 for each dependent, up to three dependents, and would additionally include adult dependents.

Education

Both proposals include provisions about education funding. 

The Heals Act includes $105 billion for education, with $70 billion being directed toward K-12 schools, $29 billion for higher education, $5 billion for governors to distribute to K-12 or higher education at their discretion and $1 billion to the Bureau of Indian Education, according to the Washington Post. 

“We are talking about more than $100 billion — more for an education fund than House Democrats put aside in a bill that spent multiple trillions,” McConnell said. “And there are policies to help childcare providers and schools have the flexibility they need to function.”

While the Heals Act would provide over $100 billion for schools, State Budget Director Chris Kolb said the proposal makes two-thirds of that funding for schools contingent on their reopening.

The Heroes Act also includes over $100 billion for education, but currently seeks to delegate less funding to schools: $58 billion for K-12 schools, $27 billion for higher education and $4 billion for governors to award. 

The House-passed proposal would also provide more than $10 billion in direct emergency funding for higher education institutions that have suffered severe financial losses due to COVID-19, with $1.7 billion for Historically Black Colleges and Universities, Tribal Colleges and Universities and Minority Serving Institutions.

According to Kolb, the Heroes Act would directly provide Michigan with $2.8 billion for education.

Student loans

According to CNBC, the GOP-proposed bill would include two student loan repayment options: a mortgage-style repayment plan with a fixed annual amount paid up to 10 years and an income-based plan where borrowers pay 10% of their discretionary income.

The Heals Act would also permit federal student loan borrowers to defer their payments past Oct. 1, when borrowers were expected to have to resume monthly loan payments. 

“If you are one of 43 million Americans with a student debt, you can continue to defer your monthly payment after October 1 if you have no income,” Senate Health and Education Committee Chairman Lamar Alexander said in a press release. “When you do begin earning income your monthly payment will never be more than 10% of your income AFTER deducting the necessities of life such as rent or mortgage and food.”

The Heroes Act would extend the period where borrowers do not have to pay on their loans as well, but the proposal seeks to extend the period an entire year until Sept. 30, 2021. During that time, no interest will accrue.

The legislation would also cancel up to $10,000 of student loans. 

State funding

The Heals Act does not provide any additional funding to states, despite pleas from Michigan officials for increased federal funding.  

“There is not a single new dollar in the McConnell package allocated to the needed economic relief that Michigan and the other 49 states need,” Kolb said. “Frankly, that’s pretty unbelievable.”

The Heroes Act’s primary form of aid for states is a relief fund that provides $540 billion to states, territories and tribal governments.

According to Kolb, the Heroes Act would provide Michigan with $13 billion in direct support over the next two years.

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