Senate and WH Agree on Terms of Stimulus Package

[The Hippie Satan of Hyperbole]

I think by and large, this was a good piece of legislation given the competing political interests.  Hopefully it will work and my initial observation is correct.

[GooooMarquette]

So, as an employer I have to take a loan in the hopes that I remain in business until June 30?  Why would I take that risk when I can just layoff my people?  I'm not worried about retention because there is no one else that is hiring for their job skill set at the moment.  In this situation, I am taking all of the risk by grabbing these loans, that might turn into grants assuming I can remain in business while generating much lower revenue.

Please tell me if I have this wrong.  Just spit-balling here.

Maybe I'm being too optimistic here...but I think the employees' sense that you have their back in a crisis will make them more loyal and effective employees. Think about how you handled the choice from their perspective:

*you had a chance to take out a loan (that would become a grant) and you did, making it MUCH easier for them to weather the crisis. They see you as a "good" employer, who will remain loyal and take a chance on them when the chips are down.
or
*you had a chance to take out a loan (that would become a grant) but you didn't, so they had to scramble to get unemployment or other assistance. Maybe they cover their income; maybe they don't, but in either case they are FAR more stressed and uncertain. They see you as a "bad" employer, who just looks out for #1 when the chips are down.

Even assuming that you could just hire them back after the crisis, which would you prefer as the employer? The employees who view you as a good, stand-up employer who has their backs in times of crisis...or the employees who view you as selfish at the expense of their mental well-being in times of crisis?

So yes, there is some risk if your business isn't still around...but if you are still around, you will have MUCH happier and loyal employees when you get back to work.

[Hards Alumni]

Maybe I'm being too optimistic here...but I think the employees' sense that you have their back in a crisis will make them more loyal and effective employees. Think about how you handled the choice from their perspective:

*you had a chance to take out a loan (that would become a grant) and you did, making it MUCH easier for them to weather the crisis. They see you as a "good" employer, who will remain loyal and take a chance on them when the chips are down.
or
*you had a chance to take out a loan (that would become a grant) but you didn't, so they had to scramble to get unemployment or other assistance. Maybe they cover their income; maybe they don't, but in either case they are FAR more stressed and uncertain. They see you as a "bad" employer, who just looks out for #1 when the chips are down.

Even assuming that you could just hire them back after the crisis, which would you prefer as the employer? The employees who view you as a good, stand-up employer who has their backs in times of crisis...or the employees who view you as selfish at the expense of their mental well-being in times of crisis?

So yes, there is some risk if your business isn't still around...but if you are still around, you will have MUCH happier and loyal employees when you get back to work.

Maybe.  But they may also see this for what it is... risking their future for a couple months of current wages.  Messed up either way... Which is why I am thinking I am misunderstanding the proposal.

[cheebs09]

I think most are saying that in the sort term, worrying first about health is more important than worrying about the economy.  And that the economy would be worse in the long term if we "come back" to early.  Because it's just going to spike the disease up again and we may need to shut down again.

Agreed. My worry is that trying to “reopen” the economy too soon just keeps this problem going longer, which stagnates the economy. If we take some short term pain to get back to normal sooner, then the economy will bounce back quicker in the end than if we take half measures.

[MU82]

As someone who is a principal in a small/mid sized business that was hit EXTREMELY hard by the trade war and also had a number of people, including myself, who took substantial pay cuts in late 2019 to keep people employed and the lights on, we’ve had our global business screech to a halt, many customers flat out tell us they can’t/won’t pay until after lockdowns, and have no meaningful revenue come in while we’re shut down. I’m skeptical of how much we are truly going to be “assisted” and to add insult to injury, I and multiple others did “too well” in 2018 to meet the threshold for stimulus despite coming under in 2019 for various reasons. Corporate taxes hadn’t been finished so I and others couldn’t file personal yet.

I know I’m not alone, and I’m part of a segment of people that get shouted down with everyone that says we shouldn’t care about the stock market and that people caring about the economics are heartless and greedy. It’s getting pretty old how cut and dried people are making this out to be. JMHO

Wags, I appreciate you sharing all of this; it's valuable to get the perspective of somebody who actually faces a particular situation vs speculating about those who might or not be affected.

I hope that this all ends soon so that good, hard-working folks like you and your employees can be made whole again sooner than later.

[shoothoops]

It sounds like you do some really important and underappreciated work. So, thank you. You're a big part of why we can all be proud of the MU community. I think some of the frustration you're expressing here is valid, but in the current situation, no fix is perfect. And you can't let perfect get in the way of good.

Thinking through the current scenario where a very significant portion of the population has suddenly become vulnerable, speed has to be a huge priority. Working through all the potential scenarios to ensure 100% coverage would take time that I'm sure many people feel they don't have. For every person left out, there are probably 50 people who really needed to pay rent or buy medicine or groceries. There is a lot of good intent here. To use another colloquialism, we can't miss the forest for the trees in this situation.

And while I'm sure many people will be skeptical of the money going to certain sectors or big businesses, there are a ton of people that could be out of work if big businesses fail or are significantly set back by the current situation. It's easy to just look at big revenue numbers and assume large corporations don't need any help, but without the stimulus, there would probably be a lot of people out of work.

Many have suggested that getting money into the hands of the people that need it most in various categories without means testing would have been faster and better for the economy.

Previous corporate bailouts of Obama etc..were successful but didn’t include enough restrictions. And that is understandably a concern for many when it comes to big business.

[MU Fan in Connecticut]

As someone who is a principal in a small/mid sized business that was hit EXTREMELY hard by the trade war and also had a number of people, including myself, who took substantial pay cuts in late 2019 to keep people employed and the lights on, we’ve had our global business screech to a halt, many customers flat out tell us they can’t/won’t pay until after lockdowns, and have no meaningful revenue come in while we’re shut down. I’m skeptical of how much we are truly going to be “assisted” and to add insult to injury, I and multiple others did “too well” in 2018 to meet the threshold for stimulus despite coming under in 2019 for various reasons. Corporate taxes hadn’t been finished so I and others couldn’t file personal yet.

I know I’m not alone, and I’m part of a segment of people that get shouted down with everyone that says we shouldn’t care about the stock market and that people caring about the economics are heartless and greedy. It’s getting pretty old how cut and dried people are making this out to be. JMHO

I saw this graph this week.  And I just caught up on 4 months of my trade magazines about how much uncertainty tariffs created. 
They increased metal pricing in 2018 and then crated metal prices in 2019 while demand was merely lethargic.
All of this is before Coronavirus disruption.

We export to China and we were planning to expand here in Connecticut, but Trump tariffs made the powers that be decide to transfer the manufacturing for the Chinese market to China. 
From what I read we're not the only company experiencing.  Sounds somewhat like JWags situation.

[ZiggysFryBoy]

Bill still has to clear the house.   Though i saw pelosi say she expected to pass. But you never know what will get slipped in by either side that could deep six the whole deal.  Because Washington DC.

[The Hippie Satan of Hyperbole]

Bill still has to clear the house.   Though i saw pelosi say she expected to pass. But you never know what will get slipped in by either side that could deep six the whole deal.  Because Washington DC.

The key is that the House Rules are much more restrictive about bringing in amendments from the floor.  I think the biggest problem they are facing is how to approve this without bringing everyone back.

[Jockey]

Agreed. My worry is that trying to “reopen” the economy too soon just keeps this problem going longer, which stagnates the economy. If we take some short term pain to get back to normal sooner, then the economy will bounce back quicker in the end than if we take half measures.

I don’t know that this will be a problem. The president didn’t close the economy. Governors did. Most of them seem to be putting the health of their citizens over money. I trust their decisions.

[pbiflyer]

Ah yes.

Let's get hung up on the moral hazard of the working poor getting enhanced unemployment for four months, but bail out the same airline industry that was bailed out just over a decade ago with barely any strings attached.

[Lennys Tap]

I think most are saying that in the sort term, worrying first about health is more important than worrying about the economy.  And that the economy would be worse in the long term if we "come back" to early.  Because it's just going to spike the disease up again and we may need to shut down again.

Fluff

Very reasonable, nuanced POV. Also very different from some of the bumper sticker sloganeering engaged in here. No perfect solution, any attempt to thread this needle will be difficult. In the short term, I lean in your direction.

[MU Fan in Connecticut]

I just saw a report that California has 2 million unemployment claims since March 16 and Pennsylvania had 500,000 claims. 
Scary numbers.

[pbiflyer]

I just saw a report that California has 2 million unemployment claims since March 16 and Pennsylvania had 500,000 claims. 
Scary numbers.

The Texas system crashed on Tuesday. Florida won't release numbers yet, but estimates are at least 800k.

[MU82]

Now that so many more are eligible for unemployment benefits, it's gonna be interesting to see how various states' systems can handle the crush. I'm guessing there will be a bazillion problems, especially at first.

[Jockey]

Now that so many more are eligible for unemployment benefits, it's gonna be interesting to see how various states' systems can handle the crush. I'm guessing there will be a bazillion problems, especially at first.

You can guess who will be the first to be blamed if systems crash.

[jesmu84]

Final text of the bill has not been released, but according to a legislative draft, the new law would establish a $4.5 trillion corporate bailout fund overseen by Treasury Secretary Steve Mnuchin, with few substantive constraints. Some outlets are reporting this as a $500 billion fund, but $425 billion of that can be leveraged 10 times over by the Federal Reserve, resulting in a multi-trillion-dollar program.

The bill permits bailed out companies to lay off up to 10% of their workforce over the next six months, with no restrictions thereafter. Mnuchin would have authority to waive any upside for the public in its new investments, and the bill’s restrictions on stock buybacks at bailed-out firms are too temporary to be significant. Bailed out companies could even pay dividends to their shareholders.

 

Emphasis is mine

[jesmu84]

Backing up some of shoothoops' concerns:

The latest version of the Senate bill offers its full cash benefits — $1,200 per adult tax filer, $500 per child — to even the poorest Americans, correcting a big problem with the first GOP draft of the bill that left out low-income people entirely. But you need to have filed taxes for 2018 or 2019 to get the benefit, which leaves out millions of Americans who do not typically need to file.

Nonfilers typically either rely on mostly nontaxable income — like Social Security retirement or disability benefits or retirement income from a Roth account — or do not have enough money to owe taxes. Either way, they tend to be among the most economically vulnerable people in the country.

That could exclude up to 30 million individuals.

Also noted that if you don't have direct-deposit info on file with the IRS, it could delay individual payments by up to 4 months.

[jesmu84]

Didn't notice if this was posted..

Thankfully, workers - including gig and tipped workers - can receive 100% of their salary up to $75k through the expanded unemployment.

That's huge.

[The Hippie Satan of Hyperbole]

Does anyone know if you still get the stimulus payment if you have been declared a dependent on someone else's taxes?

[Hards Alumni]

Didn't notice if this was posted..

Thankfully, workers - including gig and tipped workers - can receive 100% of their salary up to $75k through the expanded unemployment.

That's huge.

Ha, so that should bite the average tipped worker right in the ass since the ones I know do not report anything close to the amount of tips they receive.

[warriorchick]

Ha, so that should bite the average tipped worker right in the ass since the ones I know do not report anything close to the amount of tips they receive.

Sucks to cheat on your taxes.

I had a co-worker whose husband was self-employed as a chemist (he developed flavors for food companies).  He died unexpectedly, leaving her with a very young child.  She went to collect Social Security survivor benefits and discovered that her late spouse seriously under-reported his taxable income - so much so that the monthly amount she and her daughter received was a fraction of what it would have been if he had declared his real income.  And it wasn't like he put that extra money in a savings account or anything.

[Eldon]

I saw this graph this week.  And I just caught up on 4 months of my trade magazines about how much uncertainty tariffs created. 
They increased metal pricing in 2018 and then crated metal prices in 2019 while demand was merely lethargic.
All of this is before Coronavirus disruption.

We export to China and we were planning to expand here in Connecticut, but Trump tariffs made the powers that be decide to transfer the manufacturing for the Chinese market to China. 
From what I read we're not the only company experiencing.  Sounds somewhat like JWags situation.

Check out the index put out by one of my favorite economists, Steven Davis at the University of Chicago



By this measure, the tariffs (and threat of them) created as much uncertainty as the Financial Crisis and 9/11!

I have some evil genius hypotheses about the tariffs that have nothing to do with nationalism, bringing jobs back, etc.  But I'll leave those in my head.

[Hards Alumni]

Sucks to cheat on your taxes.

I had a co-worker whose husband was self-employed as a chemist (he developed flavors for food companies).  He died unexpectedly, leaving her with a very young child.  She went to collect Social Security survivor benefits and discovered that her late spouse seriously under-reported his taxable income - so much so that the monthly amount she and her daughter received was a fraction of what it would have been if he had declared his real income.  And it wasn't like he put that extra money in a savings account or anything.

Well, that's terrible.

[skianth16]

Does anyone know if you still get the stimulus payment if you have been declared a dependent on someone else's taxes?

You do not. But I think your parents would be eligible for the $500 bump per dependent.

This NBC News Q&A was really helpful overall. It addressed the dependent question specifically. - https://www.yahoo.com/news/coronavirus-checks-direct-deposits-coming-105454070.html