Will coronavirus stimulus checks cause inflation problem?
Lebenthal Global Advisors President Dominick Tavella and Walser Wealth Management President Rebecca Walser discuss how stimulus checks will impact the economy and markets.
President Biden on Thursday signed into law a massive coronavirus relief package that's intended to shore up the U.S. economy's recovery from the pandemic with billions in aid for American families and businesses.
The $1.9 trillion measure provides a third stimulus check for millions of Americans, extended unemployment benefits through Sept. 6, and a generous one-year expansion of the child tax credit. It also includes hundreds of billions of dollars in aid for state and local governments, vaccine distribution efforts and small businesses.
But tucked into the legislation — which passed without a single Republican vote — is a raft of unexpected provisions, some seemingly unrelated to the pandemic.
Here's a closer look at some components you may be surprised to discover were included in the relief bill:
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$500 million for museums and libraries:
Roughly $500 million will go toward doubling the budgets of the Institute of Museum and Library Services and the National Endowment of the Arts and Humanities.
About $200 million in the bill is set aside for The Institute of Museum and Library Services, an independent federal agency that provides grants to libraries and museums, and also helps to fund policy development and research. Its budget in fiscal year 2019 was about $240 million.
The relief measure also allocates $270 million for the National Endowment of the Arts and the Humanities, an institute that had a budget of $253 million in fiscal year 2019.
"The legislation would appropriate $480 million for grants to fund activities related to the arts, humanities, libraries and museums, and Native American language preservation and maintenance," the Congressional Budget Office said in its analysis of the proposed measure.
$28.6 billion for independent restaurants
Restaurants — one of the businesses hit hardest by the pandemic — are set to receive $28.6 billion from the American Rescue Plan. Independent restaurants with 20 or fewer locations will be eligible to receive debt-free aid through the new grant program, with amounts based on overall revenue lost.
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$5 billion for disadvantaged farmers
Introduced by Sen. Raphael Warnock, D-Ga., the $5 billion Emergency Relief for Farmers of Color Act, which is part of the stimulus bill, will provide direct payments to Black, Hispanic and Indigenous farmers.
It also includes $1 billion to address systemic racism at the U.S. Agriculture Department and provide legal assistance to farmers of color.
Affordable Care Act expansion
The legislation includes a major expansion of the Affordable Care Act that will boost premium subsidies already offered under the Obama-era health care law and increase their availability.
It will fully subsidize ObamaCare subsidies for people earning up to 150% of the federal poverty level and unemployed individuals. The measure also makes Americans earning more than 400% of the poverty level — about $51,000 for one person, and $106,000 for a family of four — eligible for subsidies for the first time and will cap their premium costs at 8.5%.
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The subsidy boosts, which Democrats have sought for years, will only last for two years, through 2022.
The measure will also have the federal government subsidize 85% of COBRA coverage, which allows individuals who lost their jobs to stay on their previous employer's health care, through Sept. 21.
"The increased ACA premium subsidies under the House COVID relief plan, along with a new outreach campaign, could supercharge the upcoming reopened enrollment period and help to reverse recent increases in the number of people uninsured," Larry Levitt, a health policy expert at the Kaiser Family Foundation, said in a tweet.
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