Economy Apr 24

Congress backs $484 billion economic stimulus bill

Package will provide $320 bn for small businesses to pay workers, $75 bn for hospitals, $25 bn to expand virus testing

by Chris Stein
Congress backs $484 billion economic stimulus bill
US House Speaker Nancy Pelosi walks to the chamber of the US House of Representatives for a vote on the additional $483 billion relief package for small business and hospitals in Washington on April 23. Photo: Nicholas Kamm / AFP

The House of Representatives passed a new $484 billion economic stimulus bill on Thursday as US job losses due to the coronavirus soared and businesses clamoured for more support.

The House voted overwhelmingly for the bill, already passed by the Senate, and President Donald Trump indicated he would quickly sign it into law to pump more emergency funding into the world's largest economy. 

The bill came as another 4.4 million US workers filed new claims for jobless benefits, bringing the total to 26.4 million since mid-March.

Unemployment has rocketed as much of the nation shut down to stall the spread of the virus, which has taken about 48,000 lives across the country since February.

The House vote capped two weeks of wrangling by Democrats and Republicans over how to add to the massive $2.2 trillion CARES bill enacted in late March to support businesses and families hit hard by shutdowns and layoffs.

The unemployment claims figures released on Thursday show that layoffs have continued at a high rate for a fifth week, despite help from Congress.

The new package would provide another $320 billion for small businesses to keep their doors open and pay their workers, after the initial $349 billion in the Paycheck Protection Program was drained in just two weeks.

The new funding will also provide $75 billion for hospitals, $25 billion to expand virus testing and $60 billion in disaster recovery loans and grants. 

Lawmakers donned masks to enter the House in small groups to comment on the legislation and then to vote, with the chamber emptied out for a sweeping sterilization halfway through the session.

To open or not to open?

The fresh funding, which is driving up the US government's financial deficit, comes as individual states and communities mulled reopening businesses and allowing the public to return slowly to the streets.

Business owners and economists have said that without confident consumers willing to go out and spend, reopening shops and restaurants will have little effect.

In states where the outbreak has been less severe, governors are beginning the slow process of returning to normal, some in response to a spate of anti-lockdown protests.

But their measures are being called into question – and Trump specifically criticized a decision by Georgia's governor to open hair salons, tattoo parlours and gyms in the state from Friday.

A CBS News poll released on Thursday said 63% of Americans were more concerned about lifting the restrictions too soon and intensifying the outbreak than about the consequences to the economy of maintaining them for too long. 

Meanwhile, only 13% said they would return to public places if restrictions were lifted right now.

Double-digit unemployment

Calling the jobless figure "extraordinarily elevated," Nancy Vanden Houten of Oxford Economics predicted the US was on track for a spike in the unemployment rate to 24%.

That is a reversal of fortune that was unthinkable at the beginning of the year, when the rate was in the low single digits.

"While there is great uncertainty surrounding the magnitude of the job losses in April, we expect a total decline of around 24 million that will touch a wide range of jobs, but be concentrated in the accommodation and food services, recreation, retail and transportation sectors," she wrote in an analysis.

AFP