On May 15, 2020, the U.S House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. This $3 trillion bill is designed as a follow-up to the CARES Act signed into law by President Trump on March 27, 2020.
The HEROES Act passed narrowly through the House with a vote of 208-199, and its fate in the Senate is less than certain. Here’s everything you should know about the contents of the bill and the obstacles it faces in Congress.
The HEROES Act Proposals
According to the sponsor of the HEROES Act, Representative Nita Lowey of New York, “This bill responds to the COVID-19 (i.e., coronavirus disease 2019) outbreak and its impacts on the economy, public health, state and local governments, individuals, and businesses.”
The 1,815-page bill would surpass the CARES Act as the most expensive piece of relief legislation in American history. These are just a few of the forms of relief the HEROES Act seeks to provide:
- $1 trillion to cover pay for first-line workers and teachers
- $200 billion to create a Heroes’ Fund to provide hazard pay for essential workers
- Unemployment benefit protections extended through January 2021
- $75 billion dedicated to COVID-19 supplies and contract tracing measures
- $175 billion to help families pay rent, mortgage, and utility payments
- Extension of employee retention tax credit
- Second round of direct stimulus payments to American citizens
How Much Is the Stimulus Payment Under the HEROES Act
Nothing is set in stone yet, but in the form of the HEROES Act passed by the House of Representatives, the bill would provide a stimulus payment of $1,200 per person, plus another $1,200 per dependent, up to three. That’s much more than the $500 per dependent paid out by the CARES Act.
Given the limit of three qualifying dependents per household, a married couple with three children would receive up to $6,000 under the HEROES Act.
There are other differences to note between the CARES Act and the HEROES Act as well. Namely, dependents do not have to be under the age of 17 to qualify for a payment, and all noncitizens can qualify for a stimulus payment as long as they have a valid taxpayer identification number.
What Obstacles Will the HEROES Act Face in the Senate?
The Senate has not indicated when it will review or respond to the HEROES Act, although some senators have individually rebuked the bill in its current form. Americans should expect the bill to undergo significant revisions before it has a chance to survive a senate vote.
First, Republicans and Democrats will likely debate the expanded unemployment benefits provided in the bill. Many Republicans fear that providing an additional $600 in unemployment benefits per week through January 2021 will trigger long-term negative economic consequences. Workers receiving unemployment benefits may be discouraged from returning to work, where they could ultimately earn less. Not only would this delay the restart of the U.S economy, it would hurt the Social Security program, which relies heavily on payroll tax revenue.
Additionally, Republicans are sure to disagree with Democrats on the clause allowing noncitizens to receive stimulus payments. It could prove a sticking point in negotiations due to the long-standing ideological differences between the two parties.
Finally, experts expect Republicans to hesitate on the HEROES Act due to its unprecedented cost. In April, the Congressional Budget Office estimated the annual federal deficit would reach $3.7 trillion by the fall of 2020. Adding an additional $3 trillion to that deficit in order to pass the HEROES Act may be out of the question for some Republicans. Senate Majority Leader Mitch McConnell, for example, has emphasized his desire to evaluate the effects of the CARES Act before approving another round of stimulus.
The bottom line? This is a game of “wait and see” for the American people.
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