Last night, the House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act, or the HEROES Act, by a vote of 208-199. The sweeping $3 trillion legislation was dismissed by Senate Republicans with Majority Leader, Mitch McConnell, deriding it as a “big laundry list of pet priorities.” The “grab bag” bill included many provisions seemingly disconnected from stabilizing the economic effects of the coronavirus pandemic, such as ones related to cannabis banking. For a messaging bill meant to outline Democratic priorities, the HEROES Act is as notable for what it omits as for what it includes.

No Paycheck Guarantee Act

Spearheaded by Representative Pramila Jayapal and the Congressional Progressive Caucus, the Paycheck Guarantee Act would have guaranteed 100 percent coverage of workers’ wages up to $90,000 a year. The sponsors argued that given the economic carnage inflicted by coronavirus, Congress needed to “think bigger” and offer “workers as well as businesses, nonprofits and local governments of all sizes a better path forward in this uncertain environment.”

Interestingly, an analysis by Moody’s chief economist, Mark Zandi, estimated that the net costs of the program would be $654 billion over six months, which is actually less than the two rounds of small business loans approved by Congress as part of the Paycheck Protection Program. Another interesting feature of the proposal would have taken out banks as the intermediary to disburse payments, instead facilitating payments straight from the IRS to employers.

Exclusion of the Paycheck Guarantee Act led to a mini-rebellion with progressives initially threatening to vote against the HEROES Act. Most members eventually fell in line with Speaker Nancy Pelosi and voted in favor of the HEROES bill.

No Recurring $2,000 Monthly Stimulus Checks

The HEROES Act included a proposal for a second round of direct payments to Americans – $1,200 for an individual, $2,400 for joint filers, and $1,200 for up to three dependents. This one-time infusion of cash would provide relief to many Americans who exhausted their funds from the first round of stimulus payments, received a lower amount than anticipated, or are still waiting to receive it.

Pelosi and Democrats chose the single-payment route instead of a recurring stimulus payment that would have provided ongoing relief for up to 12 months. Representatives Ro Khanna and Tim Ryan had introduced The Emergency Money for the People Act, which had attracted increasing support from other House Democrats. Other similar proposals were introduced by Pramila Jayapal and Rashida Tlaib in the House as well as by counterparts in the Senate, including a proposal by Ed Markey, Kamala Harris, and Bernie Sanders that would provide a monthly $2,000 check to those struggling to make ends meet during the COVID-19 pandemic. “A single check is not sufficient for households that are struggling during this health and economic crisis.” said Senator Markey. “Americans need more than just one payment.”

No Automatic Stabilizers

As argued in a previous column, “there is a looming disconnect between the sluggish speed of recovery and the duration of unemployment benefits that were included in the $2 trillion CARES Act passed by Congress.” This problem could have been solved through the use of automatic stabilizers, which would have tied federal aid to economic conditions. Use of stabilizers would have removed the need to continuously pass additional legislation for more aid, instead, automatically extending aid, such as enhanced unemployment insurance, until the economy recovers.

The Worker Relief and Security Act, introduced by Senators Michael Bennet and Jack Reed, along with Representative Don Beyer, aimed to align relief with the span of the COVID-19 pandemic as opposed to allowing benefits to lapse after a fixed period of time. However, this proposal, along with automatic stabilizers of any kind, were left out of the HEROES Act passed by the House. Instead, the bill would simply extend the enhanced unemployment benefits through January, 2021.

No Improvements To Get Funds To Individuals Quicker and More Accurately

Problems with the CARES Act weren’t limited to eligibility or duration of funding, they also involved executional mistakes. The process of delivering funds to individuals and small businesses was riddled with friction and complexity. Many individuals have still not received their stimulus checks from the CARES Act. Others received checks, but for a lower amount than expected and are being told by the IRS that they won’t be able to receive the difference until 2021 when they file their taxes. Instead of spending over 1,800 pages on futile proposals, many not germane to the coronavirus pandemic, it would have behooved Democrats to develop proposals to deliver funds more quickly and more accurately to Americans.

Further Coronavirus-Related Reading:

Get My Payment: IRS Formally Addresses What To Do If Your Stimulus Check Amount Was Wrong

New Proposal Would Extend $600 Unemployment Benefit Indefinitely Until Coronavirus Crisis Ends

IRS Explains Why Your Stimulus Check Payment May Be Different Amount Than Anticipated

9 Potential Hacks To Escape IRS “Payment Status Not Available” Purgatory And Track Your Stimulus Check

Proposal: $5,000 Stimulus Check In Exchange For Slightly Delayed Social Security Benefits

The U.S. House of Representatives just passed the HEROES Act – a massive, $3 trillion stimulus bill. The bill is designed to provide broad financial relief to individuals, businesses, nonprofit organizations, and state and local governments who have been hit hard by the economic fallout from the COVID-19 pandemic. Senate leadership has already declared the bill “dead on arrival,” and the President has promised to veto it.

Student Loan Relief Provided by the HEROES Act

House progressives had originally pushed for $30,000 in across-the-board student loan forgiveness. The released version of the bill reduced the forgiveness, but still provided meaningful student loan student relief, including the following:

• $10,000 in federal student loan forgiveness;
• $10,000 in private student loan forgiveness;
• An extension of the CARES Act suspension of payments, interest, and collections on government-held federal student loans through September of 2021, and an expansion of those protections to include commercially-held FFEL-program federal student loans as well as Perkins loans.
• A fix to Public Service Loan Forgiveness that would allow payments made on previously-consolidated federal student loans to potentially count towards the 120 qualifying monthly payments required for the program.

Push to Limit Student Loan Forgiveness

Democratic House leaders, concerned about the ballooning cost of the bill, made a last-minute push to amend and limit the student loan forgiveness provisions of the Act. The amendment restricts eligibility for student loan forgiveness to those who are “economically distressed.” The Amendment defines this as someone who, as of March 12, 2020 (just prior to the national emergency declaration), met one of the following criteria:

• They were delinquent or in default on their student loan;
• They were in an economic hardship deferment or forbearance on their student loan;
• They were in an income-driven repayment plan with a monthly payment amount of $0/month.

Consumer advocates, concerned that many student loan borrowers may have difficulty recovering from the economic collapse, expressed disappointment at the reduced student loan forgiveness benefits. However, the bill still provides substantial relief to many student loan borrowers.

What Else Is In The Bill?

The HEROES Act also includes numerous other economic relief provisions, including the following:

• Additional direct cash payments to households, including $1,200 per individual earning up to $75,000 per year. Families with dependent children could receive up to $6,000.
• An extension of enhanced unemployment benefits (which is an additional $600 per week) to January 2021. 
• Hazard pay for essential workers.
• Housing assistance to help renters and homeowners with rent and mortgage payments.
• Debt collection relief.
• Direct financial relief to state, local, and tribal governments.
• Billions of dollars dedicated to Coronavirus testing and contact tracing initiatives.

What’s Next?

Now that the bill has passed the House, it will be sent to the Senate. In order for a bill to become law, it must pass both the House and the Senate, and then be signed by the President.

Senate leadership has already described the HEROES Act as “dead on arrival,” before the final version even passed. The Senate is not likely to return to Washington until sometime in June, so no quick action will be taken. The President has also indicated that he opposes the House bill. However, the Democratic House leadership views the passage of this bill as an important negotiating step in crafting a final stimulus bill that can win over sufficient votes in both chambers of Congress to become law.