House Democrats released an updated Heroes Act proposal yesterday in a final attempt to break the negotiation logjam over the next coronavirus stimulus package. The scaled-back plan is estimated to cost $2.2 trillion, which is $1.2 trillion less than the original $3.4 trillion Heroes Act passed in May. “Democrats are making good on our promise to compromise with this updated bill, which is necessary to address the immediate health and economic crisis facing Americas working families right now,” Pelosi said in a letter to Democrats. “We have been able to make critical additions and reduce the cost of the bill by shortening the time covered for now,” she added.
The update Heroes Act proposal rejiggered many provisions, but also added some important spending clauses. Here are some of the biggest areas that Pelosi and House Democrats cut:
- State And Local Aid – $480 Billion Cut: The original Heroes Act called for $915 billion in aid to state and city governments. Specifically, it allocated $540 billion in general aid to states, territories, and tribes and an additional $375 billion in general aid to local governments. The aid has been one of the largest sources of friction in negotiations with Republicans railing against what they call a “blue state bailout” for governments that had been fiscally irresponsible prior to the coronavirus outbreak. The updated Heroes Act slashes the state and local aid funding more than 50 percent, to $436 billion. This is still roughly three times as high as Republicans believe is needed, but is a $480 billion cut from the $3.4 trillion Heroes Act
- Hazard Pay – $190 Billion Cut: The original Heroes Act included $190 billion in hazard pay for for front line health care workers and others in risky jobs. It would have provided an incremental $13 per hour in so-called hazard pay for essential workers, up to $10,000 per employee. The revised Democratic proposal scraps this provision, thereby reducing the overall cost of the bill by $190 billion.
- Hospitals And Housing Rental Assistance – $100 Billion Cut: The updated proposal by Democrats scales back aid to hospitals and front line workers as well as funding for housing rental assistance. Each of these provisions was pared down by roughly $50 billion from the original Heroes Act, for a total cut of $100 billion.
- Aid To Homeowners – $54 Billion Cut: The original Heroes Act would have established a $75 billion homeowner assistance fund. This would have provided homeowners with funds to cover mortgage payments, property taxes, utility payments to help individuals stay in their homes. The updated Heroes Act cuts this provision by $54 billion, proposing a $21 billion fund instead.
- U.S. Postal Service Aid – $10 Billion Cut: The Heroes Act passed in May included $25 billion in direct aid to the U.S. Postal Service. The revised proposal cuts this by $10 billion; however, as noted by Roll Call, the “same amount would also be made available through repeal of borrowing restrictions in the March coronavirus aid package.”
These cuts total $834 billion. The additional cuts come from changes in duration or reductions in potential benefits including:
- Economic Impact Payments For Dependents: The original Heroes Act expanded stimulus check payments for dependents, raising the amount from $500 to $1,200 for qualifying dependents. The updated proposal brings the amount back down to $500 per dependent, which is in line with what Republicans had proposed in the HEALS Act.
- Child Tax Credits: The original Heroes Act increased child tax credit benefits and refundability for 2020, at a cost of $119 billion. The scaled down proposal reduced the per-child benefit from $3,000 in the original Heroes Act to $2,000. The amount for children under six years old would be $3,600.
Notably, the updated Heroes Act also added provisions that had not been included in the original Heroes Act. These included $120 billion for the restaurant industry and $28 billion for the airline industry’s Payroll Support Program, which is set to expire on September 30 and is championed by President Trump. Additionally, the updated proposal beefs up education funding, both for K-12 as well as colleges and universities.
While the $1.2 trillion in cuts is significant, the $2.2 trillion updated Heroes Act still comes in significantly above proposals put forward by Republicans. That leaves a gap that Pelosi and Treasury Secretary Steve Mnuchin will need to bridge in the coming days if there is hope of another stimulus package passing. Pelosi and Mnuchin are scheduled to resume negotiations today. “I think we can find our common ground … but he has to come back with much more money to get the job done,” Pelosi told Andrea Mitchell on MSNBC, referring to Mnuchin. “So, I’m hopeful. I’m optimistic.”
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