Third Coronavirus Bill Includes Unprecedented Industry Relief and Promises of Swift Action

March 20, 2020

All but shut out of the negotiations on the second pandemic response bill, Senate Majority Leader Mitch McConnell (R-KY) made it clear—Senate Republicans would shape bill number 3.  Negotiations begin today with the Democrats, who will insist on strings attached for companies receiving assistance.

The Coronavirus Aid, Relief, and Economic Security Act (S. 3548) would, among other things:

  • Delay estimated corporate tax payments until October 15, 2020; and
  • Delay the employer share of the Social Security payroll tax (6.2%) on employee wages, to be paid over the following two years (2021 and 2022).

Funding for affected industries:  Treasury Secretary would have about $208 billion in collateralized loans and loan guarantees for the most affected industries, such as the airlines and the broader travel sector, including:

  • Up to $50 billion for passenger air carriers; 
  • Up to $8 billion for cargo air carriers; and 
  • Up to $150 billion for other eligible entities. 

Senate Appropriations Committee's press release on this section of the bill said, “The legislation also mandates that entities receiving assistance under the Act do not increase compensation for, or provide golden parachutes to, executives over a two-year period from the date of enactment.”

Democrats likely to push for certain conditions:  Democratic Leader Chuck Schumer (D-NY) has made it clear that worker protection is critical.  Senator Elizabeth Warren (D-MA), meanwhile, is looking for eight different conditions, including a $15 minimum wage, a permanent ban on stock buybacks, no dividends or executive bonuses, and a seat for workers on the boards of companies receiving assistance. 

Checks in the mail:  Most Americans with adjusted gross incomes of less than $75,000 would get a check for $1,200.  However, Senator Lindsay Graham (R-SC) is pushing back on the idea.  So is Senator Josh Hawley (R-MO), who charges it does not help the lowest wage earners sufficiently.  But President Trump and the Democrats like the concept.

Senate is motivated to act quickly.  Americans need the relief and the senators are hot to get out of town.  Crystal balls do not foretell bill #3 clearing the Senate this weekend, but it will pass as quickly as possible and go over to the House.  However, a quick House passage may be complicated by the virus itself, for which some members have already tested positive.  

The House could approve the bill by unanimous consent while only the most motivated members of Congress will come back to D.C. and stand up and object. 

Bottom line:  Bill #3 will be more expensive than almost anything else we can imagine—the financial crisis, Hurricane Katrina, et al.  But it is likely to be on the president’s desk by the middle of next week.