Congress Passes Car Loan Stimulus Package


Us Congress Passes Economic Relief Legislation

House passes bill for $2,000 stimulus checks, putting GOP senators in a tough position

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WASHINGTON, D.C. The U.S. Congress passed the $900 billion COVID-19 Economic Stimulus Relief Act today. This legislation, which passed along with the $1.4 trillion FY21 budget package, is the second largest stimulus package ever passed, behind the CARES Act, which was passed in March of this year. The bill now goes to the President for signature. President Trump is expected to sign the legislation.

The stimulus legislation includes $300 billion in funds to the Small Business Administration for the reauthorization of the Paycheck Protection Program providing a second round of loans to small businesses struggling due to the pandemic. Businesses with less than 300 employees that are able show demonstrated losses this year compared to 2019 are eligible for a second forgivable PPP loan. Additionally, loans of less than $150,000 will be evaluated for forgiveness through a simple, one-page loan forgiveness application document. To read more about the requirements for a PPP loan, click here to see the SBA website, or here to read the bill text.

In addition to relief funds for small businesses, this legislation also includes a second round of direct individual stimulus payments. Individuals with an income less than $75,000/year will be eligible for payments of a maximum of $600.

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Congress Passes Massive Stimulus Package As Virus Rages

Speaker Nancy Pelosi speaks during a press conference on Capitol Hill on Dec. 20, 2020 in Washington, D.C. | Tasos Katopodis/Getty Images

12/21/2020 11:57 PM EST

WASHINGTON Congress approved a $900 billion coronavirus relief package late Monday night after months of inaction and partisan bickering, sending desperately needed aid to Americans reeling from a global pandemic.

Last-minute drama over a series of provisions delayed final passage of the bill for days, but the major pillars remained the same: $600 direct payments to individuals and families, enhanced unemployment benefits, small business aid, and funding for distribution of the Covid-19 vaccine.

The long-delayed measure, which included $1.4 trillion to fund the government through next September, ultimately passed both chambers with overwhelming bipartisan majorities: 359-53 in the House and 91-7 in the Senate. President Donald Trump is expected to sign the mammoth bill into law, allowing at least some of the emergency aid to start flowing quickly.

Yes, there is more work to do and it will cost some money. But it will protect jobs and, most importantly, it will meet the needs of the American people, Speaker Nancy Pelosi said of the bill.

The measure marks Congress fifth delivery of relief money since the virus hit the U.S. earlier this year, killing more than 300,000 and shuttering much of the economy.

I think everybody is pretty much ready for Christmas, Sen. John Cornyn told reporters.

What Was The Biggest Expenditure In The Cares Act

The biggest single expenditure in the $2.2 trillion CARES Act was the $300 billion sent directly to American taxpayers. The payment was $1,200 for every adult and $500 more for each child in the household. Another $350 billion was paid out in forgivable loans to small businesses to subsidize their payrolls during the disruption of the pandemic.

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Developments Under The Act And Estimates Of The Act’s Effects

The Congressional Budget Office reported in October 2009 the reasons for the changes in the 2008 and 2009 deficits, which were approximately $460 billion and $1.41 trillion, respectively. The CBO estimated that ARRA increased the deficit by $200 billion for 2009, split evenly between tax cuts and additional spending, excluding any feedback effects on the economy.

On February 12, 2010, the Bureau of Labor Statistics, which regularly issues economic reports, published job-loss data on a month-by-month basis since 2000.Organizing for America, a community organizing project of the Democratic National Committee, prepared a chart presenting the BLS data for the period beginning in December 2007. OFA used the chart to argue, “As a result , job losses are a fraction of what they were a year ago, before the Recovery Act began.” Others argue that job losses always grow early in a recession and naturally slow down with or without government stimulus spending, and that the OFA chart was misleading.

The CBO also revised its assessment of the long-term impact of the bill. After 2014, the stimulus is estimated to decrease output by zero to 0.2%. The stimulus is not expected to have a negative impact on employment in any period of time.

In 2011, the Department of Commerce revised some of its previous estimates. Economist Dean Baker commented:

Understanding The Cares Act

EDGe Business Planning

At $2.2 trillion, the CARES Act stands as the largest financial rescue package in U.S. history. The 2009 Recovery Act was $831 billion, the Consolidated Appropriations Act was $910 billion, and the American Rescue Plan Act comes closest at $1.9 trillion.

The law allocated $150 billion to states and localities battling the pandemic and $130 billion more for the healthcare system.

Eligibility for some of the loans and small business assistance was left to the discretion of the Treasury or Small Business Administration, but they came with some strict conditions, and Congress appointed an inspector general and an oversight board to supervise and oversee their administration.

The CARES Act can be broken into seven major areas, including benefits for individuals, unemployment assistance, small business relief, big and medium-sized business relief, tax breaks and credits, hospital and healthcare assistance, and state and local government.

Some of the provisions of the CARE Act were extended for one year past March 27, 2021. All of the provisions of the act expired as of March 27, 2022.

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Whats In The Stimulus Package

The eligibility for the second stimulus package mostly remains the same however, individuals meeting the requirements will only receive $600 this time.Children will qualify for $600 checks and the second package will also include $300 per week for up to 10 weeks in supplemental unemployment benefits. K-12 schools and colleges will receive $82 billion in aid. The stimulus also entails aid that will speed up production and distribution of the vaccine.

Small businesses will also receive assistance, which includes $284 billion in Paycheck Protection Programs loans, meaning that small businesses can apply for a second loan. The bill also provides $15 billion for entertainment venues such as movie theaters. Twenty-five billion dollars will go to home rental assistance, and $45 billion will be allocated to transportation services such as airlines.

The stimulus bill also allocates $35.2 billion to energy initiatives including $1.5 billion for solar technology research and $500 million for stakeholders in industries looking to decarbonize, which includes the aluminum and steel industries. The stimulus package also includes $2.6 billion for so-called transportation technologies, but what exactly this means is yet to be determined.

In the first stimulus package earlier in the year, local and state governments received almost $400 billion in aid, but the package past this week does not include any, which has created some outrage from various senators and governors.

Economic Stimulus For Small Businesses

Although most of the media attention was on the money invested in large banks, the Treasury’s TARP program also invested $570 million in 84 institutions to strengthen community banks.

Second, the Economic Stimulus Package included tax write-offs for small businesses. Here are a few of them:

  • Deductions for machinery and equipment, such as computer and office equipment, signs, and vehicles, were raised to $250,000. The exceptions were SUVs, which were limited to $25,000. Property that didn’t qualify for the tax credit could be depreciated by 50%.
  • Investors in small, publicly-held businesses who held their stock for more than five years received a capital gains tax cut.
  • Small businesses could delay paying the 3% withholding tax on goods and services sold to governments.
  • The Small Business Administration 7 loan guarantee was raised from 75% to 90% of the loan value.
  • Fees were eliminated on the SBA’s 504 program, which guaranteed $4 million worth of economic development loans to small businesses.

The FY 2011 budget also allocated $64 billion, broken down as follows:

  • $33 billion in tax credits for small businesses that add new workers or give raises beyond a cost-of-living increase
  • Raise the limit on SBA loan guarantees
  • $30 billion from the TARP program for 8,000 community banks these banks own assets under $10 billion and do half of all small business lending
  • $700,000 to eliminate capital gains taxes for investors in small businesses

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Trump Administration Prepares $1 Trillion Infrastructure Package

Phillips said the bill was not written to expose members of Congress, because frankly I expected members of Congress to be forthright and transparent to begin with.

The four lawmakers told Politico that the loans were acquired through regular channels out of a desire to keep workers employed.

A spokesperson for Mucarsel Powell said her husband played no role in getting the loan and did not benefit financially from it.

Spokespeople for Williams and Hartzler declined to divulge the amounts of the loans.

Politico reported that Full House Resorts, which employs Lees husband, got $5.6 million, and the Fiesta Restaurant Group, Mucarsel Powells husbands employer, got $15 million but returned the entire amount.

Treasury Secretary Steven Mnuchin said he is talking with lawmakers about getting more information about the loans but so far hasnt disclosed the names of any recipients.

Among other steps, the Administration should release the names of all PPP borrowers, House Democrats wrote in a letter to Mnuchin on Monday.

Getting Stimulus Checks From Car Dealerships Nope

House votes to increase Covid-19 stimulus checks to $2,000

During these difficult economic times, scammers will do almost anything to try to get your money. Including, it turns out, making bogus claims about economic stimulus checks to lure customers to auto sales events.

In a complaint,the Federal Trade Commission says Traffic Jam Events, a direct mail marketing firm for car dealers, is falsely claiming in mailers that their Economic Automotive Stimulus Relief Program is affiliated with and approved by the government. Its not.

Theyre also claiming that people who come to designated sites will get stimulus relief checks. They wont.

Theyre even sending out checks that say COVID-19 Auto Stimulus with space to endorse the check on the back. But the checks are fake, theres no car-related relief in the CARES Act, and the government isnt using car dealerships to give out economic impact payments.

Here are three ways you can help protect yourself and others from these types of scams:

  • When you get promotional mailers, check out the company before you act. Search online for the company name plus the words scam, complaint, or review.
  • Dont click on links in emails or text messages. If you click, you could download malware onto your device and wind up on a site thats after your personal information. Instead, if youre worried about the message, look up whoever sent it. Then call or email using a number your research gave you not one from the message.

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Quantitative Easing And Repo Operations

On March 12, 2020, the Fed also expanded its repurchase agreementsâwhere the Fed buys assets and sells them back at a later dateâby $1.5 trillion, then added another $500 billion four days later to ensure enough liquidity in the money markets. Repo operations effectively allowed the Fed to loan money to banks.

One of the simplest asset-purchasing programs has been the QE program. The Fed directly buys assets like U.S. Treasuries and mortgage-backed securities to slowly increase the supply of money and influence inflation. The Fed, which originally created the program during the Great Recession, restarted it on March 15, 2020. The scale of the program was open-ended, with the Fed saying it would buy âin the amounts needed to support the smooth functioning of markets.â

In late 2021, the Fed started to reduce asset purchases in a process called tapering. Federal Reserve Board Chair Jerome Powell announced on Dec. 15, 2021, that the Federal Open Market Committee decided to accelerate its tapering of net new purchases of bonds, in response to a strengthening economy and rising inflation. These purchases had totaled $120 billion per month.

On Dec. 16, 2020, the Fed announced that its QE policy would continue âuntil substantial further progress has been madeâ toward inflation and employment goals. The Fed expects this progress to take years, based on projections it also released that day.

How Can A Stimulus Check Help Bad Credit

An influx of cash is normally a great thing for anyone, but it can be especially helpful to those struggling with credit issues. When a bad credit borrower applies for new credit, its very likely they need to meet a down payment requirement.

Car loans are no exception to this rule. Most bad credit auto lenders, also called subprime lenders, require at least $1,000 or 10% of the vehicles selling price as a down payment requirement.

If you qualify for any of the latest stimulus packages, either federal or through your state, these windfalls of cash could help you meet or exceed the down payment requirement of a lender. Once you qualify for financing, your on-time payments on the car loan can do wonders for your credit score.

Applying for a car loan isnt the only way cash can help you improve your credit score. Paying down your credit card balances to below 30% is a good move too.

Applying for other types of credit, such as a secured credit card, might work as well. Secured credit cards are backed by a deposit, and if you have extra cash on hand, you could meet that deposit requirement and get your hands on a secured credit card. These credit cards are reported as regular revolving credit, which could build up a nice credit history and increase your credit mix.

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What Are The Main Sticking Points For Democrats

The most notable disagreement, however, has been among Democrats about whether to include the permanent change to the minimum wage. The Senate parliamentarian, however, has determined that the wage hike would require a supermajority vote under budget rules more than Democrats can muster. All Democrats in the Senate must sign on to the bill for it to pass, however.

With the minimum wage stripped, the question then becomes whether House Democrats, like New York Rep. Alexandria Ocasio-Cortez, can support something that doesnt deliver on one of their major goals. Read more on that here.

Commercial Paper Funding Facility

EDGe Business Planning

On March 17, 2020, the Fed established the Commercial Paper Funding Facility , which purchased short-term debt known as commercial paper to ensure that those markets stayed liquid.

On March 23, 2020, the Fed broadened the variety of commercial paper that it would buy to lower the pricing of the debt. This was actually a relaunch of a program that ran during the Great Recession, when many businesses were hurt as liquidity in the commercial paper markets dried up.

While it had no set limit on the amount it purchased, the CPFF stopped purchasing debt on March 31, 2021, and the SPV continued to be funded until its assets matured. The Treasury Department made a $10 billion equity investment in the CPFF from its exchange stabilization fund .

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Congress Passes Bidens Stimulus Bill: 6 Takeaways For Student Loan Borrowers

WASHINGTON, DC – MARCH 04: US President Joe Biden gestures as he speaks during a virtual call to … congratulate the NASA JPL Perseverance team on the successful Mars Landing in the Roosevelt Room of the White House on March 4, 2021 in Washington, DC.

Getty Images

On Wednesday, the House gave final approval for President Bidens landmark $1.9 trillion stimulus legislation, called the American Rescue Plan. The legislation is one of the most sweeping economic recovery plans in the nations history.

The bill was first passed by the House last month, then amended and passed by the Senate last weekend. Todays House vote was the final step in the legislative process to approve the Senates version of the bill. Biden is expected to sign the bill into law on Friday.

The packages biggest provisions include $1,400 direct payments for taxpayers earnings less than $75,000 per year , extended federal unemployment benefits of $300 per week through September, $170 billion to reopen schools, $100 billion to expand vaccine distribution, and an expanded child tax credit that could provide up to $3,600 per child in financial support.

The bill will also benefit millions of student loan borrowers, although it falls short of what some student loan borrower advocates had hoped for. Heres a breakdown of what the stimulus bill does and doesnt do for student loan borrowers.

Financial Support For Schools Colleges And Students

The stimulus package also provides for $170 billion to K-12 schools and higher education institutions to cover reopening costs and student aid. Of that figure, $35 billion would be dedicated to public colleges and universities as well as Minority Serving Institutions and Historically Black Colleges and Universities. A portion of that could be dedicated to direct financial assistance to millions of struggling college students.

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Billion State And Local Government Relief

State and local governments received up to $150 billion in assistance through the new Coronavirus Relief Fund. Of that, $3 billion was reserved for federally administered territories and $8 billion for tribal governments.

Payments to states and local governments were divided proportionally according to population. These were large, open-ended block grants that were directed toward costs associated with controlling the pandemic and mitigating its economic damage.

Paycheck Protection Program Liquidity Facility

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To help small businesses, the Fed launched the Paycheck Protection Program Liquidity Facility on April 9, 2020, in concert with the CARES Act. This program lent money to banks so they could, in turn, lend money to small businesses through the Paycheck Protection Program . On April 30, 2020, the program expanded the types of lenders that could participate in the program. The program ended on July 30, 2021.

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