House Speaker Rep. Nancy Pelosi (D-Calif.) speaks with reporters at the Capitol in Washington, Friday morning, March 27, 2020. When members of the House return to Washington on Friday to approve a $2 trillion economic stimulus package in response to the coronavirus, and send it to President Trump, they will enter a Capitol where every facet of life has been altered by a pandemic. (Anna Moneymaker/The New York Times)
WASHINGTON — Tens of billions of dollars are on the way to Texas after President Donald Trump on Friday signed into law the largest stimulus package in the nation's history, $2 trillion aimed at curbing the spread of the coronavirus and stemming its economic damage.
While the full scope of the stimulus spending on Texas is still unknown, the state is on tap for at least $11.2 billion through a $150 billion coronavirus relief fund at the heart of the stimulus, which sends money directly to states and cities coping with the outbreak. But the state will get much more than that through the massive package that easily sailed through the U.S. House of Representatives on Friday.
The stimulus includes billions for hospitals, schools and transit systems — all stretched thin — as well as direct checks to many American taxpayers and forgivable loans for small businesses.
What does the stimulus package do?
The deal injects $2 trillion into the national economy, through hundreds of billions of dollars in business loans, $1,200 checks to individual Americans, and expanded unemployment benefits. The package also includes a $150 billion “coronavirus relief fund” for state and local governments expected to send $11.2 billion to Texas. And it offers up billions for hospitals and to make medical supplies.
Who is eligible for assistance checks?
All Americans who earn $75,000 or less would receive a one-time check of $1,200, as well as $500 per child. The benefit would be phased out for those earning more than $75,000 at a rate of $5 for every extra $100 they earn, with those earning more than $99,000 individually receiving no check at all.
Married couples earning $150,000 qualify for a $2,400 payment. Those without any income or whose earnings come from from programs like Social Security are qualified to receive payment.
When will those checks be in the mail?
Unclear. Texas U.S. Sen. John Cornyn, said earlier this week that they could be sent out within three weeks, though similar payments in the past have taken much longer.
What about people who have been laid off?
Unemployment insurance would be extended from six months to more than nine months. Those who lose their jobs due to the coronavirus will receive an additional $600 per week on their unemployment checks, more than doubling the current maximum benefit of $521 per week in Texas.
What about small businesses?
Businesses with fewer than 500 employees would be eligible for business interruption loans from the Small Business Administration. The loans would be forgiven if the business meets certain conditions, such as not laying off workers. Loans would be capped at $10 million and could be used to pay staff and make mortgage and utility payments.
What about hard hit industries like airlines and oil and gas?
The stimulus package provides $500 billion in secured loans to affected business. Airlines would receive at least $29 billion of that, and $17 billion would be set aside for companies deemed critical to national security. The remaining $454 billion would be available to affected industries across the board, presumably including oil and gas companies.
The bill will be a boon to Texas, expected to receive the second-most funding of any state, behind only California, from the coronavirus relief fund. And it comes as state lawmakers have warned of shortages of medical and protective gear and as 156,000 people filed unemployment insurance claims last week.
The stimulus provides $100 billion for hospitals, $30 billion for schools and more than $1 billion for transit systems.
For subscribers:Everything you need to know about unemployment benefits in Texas during the coronavirus crisis
- It will send $1,200 checks to taxpayers earning less than $75,000 — more than 75 percent of Texas workers, employment data show — and another $500 per child. It’s unclear how soon the payments will be made.
- Lawmakers from both parties have stressed the importance to get them to people quickly. U.S. Sen. John Cornyn, a Texas Republican, said earlier this week that they could besent out within two to three weeks, though similar payments in the past have taken much longer.
- The stimulus package also more than doubles the maximum unemployment benefit in Texas, offering an additional $600 per week to those who lose jobs during the outbreak on top of the current $521 per week maximum benefit.
- That includes gig workers like Christian Murray of Austin, who makes a living delivering food through apps like Uber Eats. While orders are up, restaurants operating with far smaller kitchen staffs are struggling to keep up, leaving drivers like Murray waiting for their orders for up to an hour and limiting how many deliveries they can make in a day.
- “You have 20 drivers showing up once, waiting for their orders,” he said. “My income for food delivery has already been cut in half, and I’m working ten hours a day, seven days a week.”
- The stimulus package provides $500 billion in secured loans to affected business. Airlines — including United, which employs nearly 14,000 in Houston alone, and Southwest, with thousands of employees in Texas — would receive at least $29 billion of that. The remaining $454 billion would be available to affected industries across the board, presumably including oil and gas companies.
- Businesses with fewer than 500 employees, meanwhile, would be eligible for $300 billion in business interruption loans from the Small Business Administration, forgiven if the business meets certain conditions, such as not laying off their workers.
- “The funds provided through the CARES Act are essential to ensure Houston businesses are able to meet payroll during this difficult time,” said Bob Harvey, President and CEO, Greater Houston Partnership, which says that more than 40 percent of its 850 small- to medium-sized member companies say they can only survive a shutdown or slowdown for one to four weeks. More than a third say they have already reduced employee headcount.
For subscribers:New Orleans is a hot spot. Will Houston be next?
- The legislation also includes language meant to make it easier for Congress to spend money on dredging projects, which could free up funding for the Houston ship channel and other local projects, said U.S. Rep. Al Green, a Houston Democrat.
- Still, it leaves out some relief for the oil and gas industry. The Trump administration had planned to fill the Strategic Petroleum Reserve, buying up to 77 million barrels of crude from U.S. oil and gas producers while prices are low and demand is slipping.
- But funding for the purchase was pulled out of the stimulus legislation, with Senate Majority Leader Chuck Schumer calling it a “$3 billion bailout for big oil.”
- The Department of Energy has since rescinded its order for an initial 30 million barrels of crude.
- “This is good legislation. It is not perfect legislation,” Green said.
- House Democrats now plan to work on at least two more coronavirus relief packages, though it remains unclear what they will include. U.S. Rep. Joaquin Castro, a San Antonio Democrat, on Friday said those next efforts need to include immigrants, “who work and pay taxes but will receive no check.”
- “There’s still much work to do to make sure that everyone in American society gets help,” Castro said.
Capital Markets Update
Covid-19 / Apr 08, 2020
Greetings. Again, I hope this finds you all healthy and safe as we continue on our path through the COVID-19 pandemic. As a follow up to what I put out last week, I wanted to touch again on what I am seeing and hearing in the marketplace.
Coronavirus (COVID-19) - Small Business Guidance & Loan Resources
Covid-19 / Apr 03, 2020
Health and government officials are working together to maintain the safety, security, and health of the American people. Small businesses are encouraged to do their part to keep their employees, customers, and themselves healthy.
Abbott Says COVID-19 Cases Are 'leveling Off' But Stay-at-home Order Stands
Covid-19 / Apr 23, 2020
Texas Gov. Greg Abbott painted a positive picture of the state’s battle against COVID-19 on Tuesday, but said it’s not yet time to fully reopen the economy.
Houston Seeks OK To Use Pandemic Aid To Close Budget Gap
Covid-19 / Apr 23, 2020
Mayor Sylvester Turner is asking the federal government to let Houston use $404 million in aid to help close its ballooning budget gap and reduce the number of expected furloughs.
Not A Lot Of Good Options To Help Collapsing Oil Prices
Covid-19 / Apr 23, 2020
Governments around the globe are scrambling to figure out what, if anything, they can do to arrest the collapse of oil prices, which fell below zero on Monday.
Texas Activists Say They Will Bail People Out Of Jail To Protect Them
Covid-19 / Apr 23, 2020
Local community activists said they would begin bailing defendants out of some of Texas’ largest county jails to protect them from the spread of the new coronavirus.