Stimulus checks, UI, and a $15 minimum wage: the state of the House’s stimulus bill so far.
We’re beginning to see what the $1.9 trillion Covid-19 stimulus package might actually look like.
The House of Representatives has been busy drafting its version of the budget reconciliation package, which includes $1,400 stimulus checks for those making up to $75,000, $400 expanded weekly unemployment insurance benefits through August 29, and, as it stands now, increasing the minimum wage to $15 by 2025. It also contains a restaurant rescue fund, money for reopening schools, and Democrats’ long-sought-after funding for state and local governments, among other items.
The biggest ticket items have been among the most contentious: Though there was some discussion of further targeting for stimulus checks, the House proposal winds up pretty close to Biden’s original plan. The $1,400 stimulus checks are for those making up to $75,000 a year, and the checks phase out at $100,000 yearly income (there has been quite a bit of back-and-forth over whether to aim them more precisely at lower-income people).
The expanded weekly unemployment benefits are currently set at $300 and expire on March 14; this bill expands them to $400 through August 29 and extends pandemic-related benefits for freelancers and contractors, along with extended state benefits, for the same period. That shaves one month off Biden’s proposal.
One big question mark in the House proposal is the federal minimum wage, which the bill would raise to $15 an hour by 2025. There are important questions as to whether a minimum wage hike can get through the reconciliation process and make it past the Senate parliamentarian, but for now, at least, Democrats are determined to fight for it. “Our strategy is to make an aggressive case with the parliamentarian,” one Democratic Senate aide said, noting Republicans were able to include work requirements for beneficiaries of social programs and open up Arctic wildlife refuges in past reconciliation bills. “These were some pretty outlandish policies that were able to pass muster.”
One thing this bill doesn’t include is automatic stabilizers, or tying unemployment benefits to the actual unemployment situation instead of picking a specific date for them to expire.
Several House committees have had a hand in crafting portions of the bill. The committees submitted their recommendations on what should be in it to the House Budget Committee, which on Monday completed its markup of the bill and packaged the whole thing together.
This is nowhere close to a done deal, and much still can change about what’s in the final bill, in both the House and in the Senate. A more bipartisan deal — which would look pretty different from this one — isn’t yet entirely off the table, though it looks unlikely at this point. And while the Senate looks likely to work from the House bill, since they were tied up with impeachment and Cabinet confirmations, they are likely to make amendments and changes to it, after which the legislation would then be bounced back to the House.
The Senate also has to keep in mind the rules governing what can be done through budget reconciliation. Aides say House and Senate committees have been in close communication on the legislation so that they don’t end up with a bunch of ping-ponging back and forth later, though some of that will likely be inevitable. The clock is ticking, and Democrats have every intention of getting more stimulus passed before the unemployment insurance cliff appears on March 14.
What’s in the House’s reconciliation bill, so far
From the Education and Labor Committee
- Money for school reopening and higher education: In line with Biden’s proposal, the bill calls for $130 billion toward school reopening, directing funds toward areas such as ventilation system upgrades, reduced class sizes, and personal protective equipment to help make schools safer, and ensures the money is directed toward public schools. Schools are required to put 20 percent of money toward learning loss, meaning efforts to make up for lost ground with students missing school. It also directs $40 billion in grants to higher education and requires institutions that receive funding to dedicate at least half of it to emergency financial aid grants for students. At for-profit higher education institutions, 100 percent of allocations have to go to student aid.
- Child care help: The proposal would put $39 billion toward a grant program for child care providers, ordering them to prioritize relief for families having a hard time covering tuition, as well as $1 billion for the Head Start program.
- Funds for health care access: The bill provides subsidies for COBRA (continued health coverage when people lose their jobs) with a premium reduction of 85 percent through September, and puts in place provisions to improve subsidies for health coverage through the Affordable Care Act marketplaces.
- Food assistance and resources for families and children: The House bill puts $5 billion more into an existing Pandemic-EBT program to help low-income families with food assistance during the school year and the summer as well as additional funds for WIC, which supports women and children. It also expands the age of eligibility for the Child and Adult Care Food Program at emergency homeless shelters for young adults, and puts millions of dollars toward programs meant to address child abuse and neglect and domestic violence. And it puts $4.5 billion into the Low Income Home Energy Assistance Program to help families cover the costs of heating and cooling their homes.
- Funds for older Americans: The bill invests $1.4 billion in programs for older adults under the Older Americans Act, including nutrition programs, support services, and disease prevention programs.
- A $15 minimum wage: The bill seeks to increase the federal minimum wage to $15 an hour, which the Congressional Budget Office estimates will increase wages for 27 million workers (some Democrats say it will raise wages for 32 million workers). There’s some debate as to whether this provision can be done through reconciliation. The bill also puts $150 million toward the Department of Labor for the implementation of Covid-19-related worker protection programs.
Transportation and Infrastructure
- Disaster relief: The bill has in it $50 billion for reimbursing state, local, tribal, and territorial governments for their Covid-19 response expenses, including vaccinations, PPE, National Guard deployment, and disinfecting public facilities.
- Public transit and transportation: The bill directs $30 billion to public transit, which nationally has seen a huge drop in ridership during the pandemic: $8 billion to airports, $3 billion to aerospace manufacturing for temporary payroll support, and $1.5 billion to Amtrak for payrolls and restoring daily long-distance service. It also puts $3 billion toward the Economic Development Administration, which provides grants to economically distressed communities, meant to help respond to economic harm done by the pandemic.
Ways and Means
- Unemployment insurance: The bill provides an additional $400 in weekly unemployment benefits from the federal government through August 29, 2021. (The supplement is currently set at $300 and is set to expire on March 14.) It also extends the Pandemic Unemployment Assistance (PUA) program for the self-employed and contractors, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which tacks on extra weeks of state benefits, through August 29. This is one to watch — Biden proposed extending pandemic-related unemployment benefits through September. The bill also directs $2 billion to the Department of Labor to shore up unemployment systems.
- Stimulus checks: After much debate about who will receive stimulus checks, the House bill would distribute a $1,400 benefit for those earning up to $75,000 and phasing out at $100,000 yearly income for individuals and $200,000 for couples. It also includes $1,400 for child and adult dependents, including college students and disabled adults (adult dependents have been excluded from previous stimulus payments).
- Tax credits: The bill expands the child tax credit to $3,000 per child up to age 17 and $3,600 for children under age 6 for 2021, and it modifies the child and dependent care tax credit so that families can claim up to half of their related care expenses. It also enhances the earned income tax credit for people without children, reducing the minimum age to claim the credit from 25 to 19 and nearly tripling the maximum credit from $543 to $1,402.
- Child care assistance programs: The bill increases funding for the Child Care Entitlement to States, which gives states funding for child care for low-income families, to over $3.5 billion per year and suspends the required state match on new funds for fiscal years 2021 and 2022.
- Pensions: A top priority of Ways and Means Chair Richard Neal (D-MA), this portion of the bill would bail out multi-employer pension plans, which are pensions created through an agreement between at least two employers and a union. Neal estimates that about 10 million Americans are participants in multi-employer pension plans, and more than 1 million of them are participating in plans that are running out of money.
- Obamacare premium subsidies. The bill increases the Affordable Care Act premium subsidies for two years for low- and middle-income Americans, or those making up to 400 percent of the federal poverty level. That would make health care through the ACA marketplace more affordable in 2021 and 2022. The bill also adjust subsidies for people who make more than 400 percent of the poverty level to make sure that nobody pays more than 8.5 percent of their income for coverage.
Small Business
- Amendments to the Paycheck Protection Program: The bill expands eligibility for the PPP for small businesses to include nonprofits (with certain restrictions) and to online-only news publishers (also with certain restrictions — they can have more than one physical location but can’t have more than 500 employees per location). It also puts an additional $7.25 billion toward the PPP, increasing the program level to $813.7 billion from $806.4 billion.
- Funds for economic disaster loans: The bill directs $15 billion toward the Economic Injury Disaster Loan program for businesses impacted by the pandemic. It also puts $1.25 billion toward the SBA’s program for shuttered venue operators that was established in the December stimulus.
- A restaurant revitalization fund: House Democrats are seeking to put $25 billion toward a new program at the Small Business Administration that would support restaurants, $5 billion of which will be set aside for businesses with under $500,000 in revenue in 2019. The restaurant industry has been particularly hard hit in the pandemic — the National Restaurant Association estimates industry losses in 2020 to be $240 billion.
Energy and Commerce
- Vaccines, testing, and tracing: The bill directs $46 billion to the Department of Health and Human Services to detect, diagnose, trace, and monitor Covid-19. It also provides $7.5 billion in funding for the CDC to promote, monitor, and track Covid-19 vaccines, $1 billion for the CDC to strengthen confidence in the vaccine, and $5.2 billion to HHS to support more vaccine research and manufacturing. And it puts $500 million toward helping the CDC track Covid-19 hot spots and $750 million toward its efforts to combat Covid-19 around the world.
- Money for the public health workforce: The bill allots $7.6 billion to HHS to shore up the public health workforce and an additional $100 million for the Medical Reserve Corps, a network of volunteers to support emergency response efforts.
- Other public health investments: The proposal puts $7.6 billion into community health centers for coronavirus-related activities and $1.8 billion toward HHS for coronavirus tests, PPE, and vaccines for staff and people living in congregate settings. All in all, it puts $25 billion toward vulnerable populations and disparities in health care and access.
- Tribal health programs: The bill puts $6 billion toward tribal health programs, including funds to support the Indian Health Service.
- Mental health and substance abuse: The bill puts $3.5 billion toward block grant programs for mental health and substance abuse prevention and treatment as well as millions of dollars more toward other programs related to mental health and substance abuse.
- Energy assistance: The bill directs $4.5 billion to HHS to help low-income people pay their energy and water bills.
- Internet connectivity: The bill establishes a $7.6 billion Emergency Connectivity Fund to be enacted by the FCC to expand internet connectivity to students and teachers during the pandemic.
Financial Services
- Defense Production Act spending: The bill puts $10 billion toward spending under the Defense Production Act, which lets the federal government make requests to private industries in times of emergency. The funds would help the president increase production of certain materials — namely, those needed to respond to the Covid-19 crisis, including PPE, vaccines, and tests.
- Rental assistance: Democrats are aiming to put $25 billion toward emergency assistance to renters. Namely, they would put $19 billion toward the Treasury Department for rental and utility assistance to be allocated to states, territories, counties, and cities, and an additional $5 billion toward emergency housing choice vouchers for people at risk of homelessness, domestic violence survivors, and human trafficking victims to help them get stable housing. The bill also aims to put money toward people living on USDA-subsidized properties and toward programs helping Native Americans, Native Hawaiians, and Alaska Natives with housing.
- Homelessness funding: The bill puts $5 billion in assistance to help communities provide shelter to the homeless.
- Homeowner assistance: The bill would direct nearly $10 billion toward states, territories, and tribes to provide assistance to homeowners on fronts such as mortgage payments and property taxes.
- Small business credits: The bill puts $10 billion toward the State Small Business Credit Initiative, which lawmakers say would support up to $100 billion in financing for small businesses through state, territorial, and tribal programs. Some funds will be directed specifically toward minority-owned businesses, businesses owned by those who are economically disadvantaged, and tribal government programs.
- Support for the airline industry: The bill directs $15 billion toward a payroll support program established under the CARES Act that was supposed to help airline workers. This was not in Biden’s plan.
Agriculture
- Food supply chains and agriculture: The bill puts an additional $3.6 billion toward the USDA for buying and distributing food and agricultural commodities and making grants and loans to farmers. It also provides $500 million in grants for rural health care and farm loan assistance for disadvantaged farmers and ranchers, including those who have historically been discriminated against by the USDA. And, it puts money toward US-led humanitarian food aid.
- Increased SNAP benefits: The bill continues the 15 percent increase in Supplemental Nutrition Assistance Program (SNAP) benefits through September 30, 2021. It also directs funds toward technological improvements for the program.
Veterans Affairs
- Claims and appeals funding: The bill directs $272 million to the Department of Veterans Affairs to try to reduce the effects of Covid-19 on benefits claims and appeals backlogs for vets.
- Veteran medical care and health needs: The bill puts $13.5 billion toward the VA for providing health care services and support to veterans, including those whose care has been delayed, become more expensive, or been otherwise affected by the pandemic.
- Funding for state veterans homes: State veterans homes are facilities that provide care for veterans, whether nursing homes, at-home help, or adult day care. The bill puts funding toward them in two ways: $500 million for the VA to send money to states to upgrade and enhance homes, and $250 million in one-time emergency payments to support facilities.
- Other VA funding: The bill directs $100 million toward the VA’s supply chain modernization efforts, $10 million for the VA’s inspector general’s office to conduct oversight, and almost $400 million for retraining assistance for veterans who lost their jobs because of Covid-19. It also allows the VA to waive copays for veterans, which is already in place, through September 30.
Oversight
- State, local, tribal, and territorial funding: The bill directs $350 billion total toward state, local, tribal, and territorial funding, split into 60 percent for states and 40 percent for localities. Nearly $200 billion would go to states and Washington, DC, with $25.5 billion equally divided and then an additional $169 billion divvied up according to the state’s share of unemployed workers. On the local government front, $130 billion would be divided between cities and counties. Of that amount, $65 billion would go to cities using a community development block grant formula, so that $45 billion would go to municipalities with populations of over 50,000 and nearly $10 billion would go to municipalities with populations of under 50,000. Then, $65 billion would go to counties based on populations. The bill directs $4.5 billion to territories and $20 billion to tribal governments.
State and local government funding has been a major sticking point for Republicans, and if Democrats are able to pass this through reconciliation, they can bypass GOP opposition.
- Emergency leave for federal and postal workers: The bill directs $570 million in emergency paid leave for federal employees and postal workers.
- Oversight money: The bill puts $117 million toward oversight entities — namely, the Government Accountability Office and the Pandemic Response and Accountability Committee — to oversee pandemic relief funds.
Democrats are trying to go fast and go big
Democrats have a deadline for passing the bill in mind, because they don’t want expanded unemployment insurance to dry up in mid-March. President Donald Trump waited until the very last minute to sign the $900 billion stimulus package into law in December, and that threw a wrench in benefits for many workers and screwed up the inner workings of unemployment administration in many states.
This time around, Democrats appear determined to get legislation done on time. In the Senate, that has entailed simultaneously dealing with Trump’s impeachment trial, which ended in acquittal on February 13, and getting Biden’s Cabinet nominees confirmed. In a press conference with Senate Democrats on February 9, Majority Leader Chuck Schumer insisted they could get it all done. “The bottom line is simple: the Senate is moving full steam ahead on a bold plan to get this country out of the crisis, to speed vaccination distribution, provide a lifeline to small businesses, help schools reopen safely, save the jobs of teachers, firefighters, and other public employees and so much more,” he said.
How this will eventually shake out is unclear. While it appears the White House at least initially wanted to try to get a bipartisan bill passed through regular order, it seems increasingly unlikely that the needed 10 Senate Republicans will go along, and the reconciliation process is moving ahead. What’s more, Democrats and Biden, well aware that the federal response to the Great Recession in 2009 was insufficient, appear determined to act aggressively on the economy this time around — whether or not many Republicans are along for the ride.
The trick, especially in the Senate, will be ensuring Democrats can stick together going forward, whatever the path.
Correction, February 19: A previous version of this story misstated Democrats’ estimate for how many workers would have their earnings increased with a $15 minimum wage.
The service is paying big money to big stars. But people who aren’t famous — maybe even you, the person reading this — might want to upload some stuff, too.
Spotify started out as a legal way to stream popular music. Then it flirted, unsuccessfully, with becoming a video company, too. Now it is trying out a new identity: It wants normal people, not just people you’ve heard of, to start uploading songs and podcasts — and then it wants to make money getting those songs and podcasts out to many, many more people.
Spotify still wants the biggest stars in the world on its service. That’s why it spends most of its money on licensing deals with the big music labels, and why it paid a ton of money to sign podcast king Joe Rogan last summer. And it’s also why it is working with Barack Obama; the service just announced that Bruce Springsteen and the former president have a new Spotify podcast where they discuss “modern manhood.”
But the main message behind a promotional event Spotify held Monday, where the company announced a slew of new products and several new podcasts, was aimed at a much larger group of musicians and podcasters who will never be Obama-level famous, or even a little bit famous: Spotify wants all of them uploading their content to Spotify.
Spotify thinks it can make money by distributing that stuff to hundreds of millions of people through a combination of advertising and subscription dollars. In theory, some of that may come back to the people who made the stuff in the first place.
After the event, I spoke with Spotify’s content boss Dawn Ostroff, a veteran of the magazine and TV business, about Spotify’s big-picture ambitions and how it is navigating the change from being a content distributor to a content owner. And, specifically, how it’s responding to the challenges that come with being Joe Rogan’s employer.
Here’s an edited transcript of our conversation:
Peter Kafka
Who is this event aimed at? It seemed reminiscent of all the streaming video launch events companies like Apple and HBO and Disney have done over the last year or so — kind of aimed at investors, but also for consumers.
Dawn Ostroff
Actually, we’re trying to reach creators. For us, it was about being able to show where we’ve come from and where we’re planning on going for creators.
When you think back to what Daniel [Ek]’s mission and vision was early on for Spotify, it was how do we connect millions of artists and creators with billions of users. This was explaining that we’ve come a long way, we still have a long way to go, and where we are in the journey. And also being able to communicate to creators the different tools, the different products that we have, to help and support them in our journey in terms of not only creation, but monetization, and of course reach.
Peter Kafka
There has been a long-running discussion with Spotify and creators/artists, back to its earliest days, where artists were complaining that they weren’t getting value out of Spotify but Spotify was getting value out of them. How much of that discussion informed what you’re doing today — both the way you talk to artists and what you’re doing for them?
Dawn Ostroff
Well, we have deals with the labels. That’s been pretty transparent: People know what we pay out, out of our revenue, to the artists and their labels. But I think really part of what Spotify is about is democratizing a form of distribution for artists in order for them to be able to experiment, create, and hopefully grow. Because there’s a lot of room for artists who aren’t necessarily the top artists in the world. And similarly for podcasters, there’s a lot of room for people who are interested in having podcasts, that aren’t the top podcasters in the world.
And the idea that you’re able to globalize the platform in a way that music is crossing over all boundaries and borders, and similarly, we’re seeing that with podcasts — it’s really unifying the world.
You don’t have to look any further than the performance of all the major record labels. The music catalogs are going for record amounts. There are hundreds of artists now earning millions of dollars from Spotify alone. And that’s part of what we wanted to be able to illustrate today.
Peter Kafka
One thing that’s changed since Spotify’s start is the way that consumers and certainly regulators view big tech platforms. They generally had favorable feelings about them, and now there’s a lot more suspicion of them. You have your own complaint about Apple — you say it has too much power. But it strikes me that in audio, Spotify has so much power that there is likely to be even more suspicion about its motives, and what happens when you give Spotify your data or your livelihood.
Dawn Ostroff
To start off with, compared to Google, Amazon, or Apple, we’re still very small. We’re not in that league. But we’re incredibly focused on audio. And there should be competition for the tech giants. And that’s what we are. We’re competition for them in this one area.
Peter Kafka
Since we’re talking about the giants: For years, Apple didn’t seem interested in making a business out of podcasting. It seems to have woken up — I guess because of Spotify — and now seems to have some plans to invest in podcasting and to offer a paid podcast service. What do you think of Apple starting to compete with you in podcasting?
Dawn Ostroff
I can’t comment on their plans. And quite honestly, I have no sense of what their plans are. But we think any company that’s spending money on the audio space is smart. We think the audio industry is still growing — we’ve seen an explosion, but we don’t think we’re anywhere near plateauing yet.
Peter Kafka
You’ve spent nearly $1 billion on podcast startups and content. When Spotify first started buying podcast assets, you said you might spend $500 million in your first year. Do you think you’re going to continue spending at this clip?
Dawn Ostroff
Our goal is to continue to grow. I can’t comment on the exact figure. But we’re pursuing it because it’s working.
Peter Kafka
When Spotify signed Joe Rogan, people like me wondered what would happen when Joe Rogan offends someone, and that has happened. And it turns out some of the people work at Spotify.
What kind of discussions did you have about whatever kind of blowback Rogan was going to generate? And did those discussions include what would happen if your own employees are upset?
Dawn Ostroff
In terms of Joe: He’s been held to the same policies that everyone else at our platform has to adhere to. And for us, it’s about having a diverse voice of people, for a global audience — a wide and varied group of people who listen to Spotify. And he happens to remain wildly popular.
I can’t comment on our internal discussions, but debate is also a big part of Spotify’s internal corporate culture. And it happens not just with something like Joe Rogan but it happens with different areas of our business. It’s nothing new for us.
Global competition in the Arctic is heating up as the year-round sea ice retreats.
The Arctic is now open for business year-round after a large commercial ship sailed the Northern Sea Route from Jiangsu, China, to a Russian gas plant on the Arctic coast, for the first time ever during the month of February, when winter temperatures normally make the icy waterway impassable.
The tanker, owned by Russian maritime shipping company Sovcomflot, was able to make the trip through the Arctic sea ice because it is no longer frozen all winter due to human-induced global warming.
The ability to make this trip 365 days a year opens up vast new possibilities for the shipping industry, which carries 80 percent of the world’s cargo by volume and 70 percent of global trade by value. But it also raises concerns about how the scramble to capitalize on the new route could upend geopolitics.
To get a better understanding of what this new possibility in the Arctic means for the rest of the world, I spoke to Juliette Kayyem, Belfer senior lecturer in international security at Harvard’s Kennedy School.
Kayyem served in the Obama administration as assistant secretary for intergovernmental affairs at the Department of Homeland Security, where she played a key role in handling major operations, including the administration’s response to the 2010 BP oil spill in the Gulf of Mexico.
Kayyem reacted on Twitter to the news of the Arctic tanker’s historic trip, writing that the moment was “so consequential you can’t get your head around it.” To find out more about why she thinks this is so monumental, I gave her a call. Our discussion, edited for length and clarity, is below.
Jariel Arvin
What exactly has changed with this news?
Juliette Kayyem
In the past, trade had to work in a north-to-south way, just because the Arctic had never been navigational. Now ships can go from Europe to China on an east-west route. It’s going to put more competition on the north-south passages to retain their commercial activity.
Eighty percent of the world’s goods by volume are shipped by cargo, so this is no joke. For 100 years, cargo has essentially followed the same pathway through the Suez Canal. So, with days cut off transit time, as well as [not having to pay] all the taxes and fees that align with being a port city or canal like the Panama Canal and the Suez Canal — that’s all going to change.
Jariel Arvin
How does this change, for example, how a Chinese cargo ship would have traveled?
Juliette Kayyem
To do Europe alone, China would have gone from the Netherlands through the Suez Canal — south of India, up to China to Dalian, which is their main area. Now if you look at the route, it’s cut off by half. Now, you can go the northern route, east down. It’s mind-boggling.
Jariel Arvin
So, Russia and China are obviously going to be interested in moving goods up through that Northern Sea Route. Which other countries will be vying for a stake?
Juliette Kayyem
Japan, Vietnam, Russia, pretty much every country. Australia is going to want to go through there. I mean, why wouldn’t they, since it’s so much shorter? Now there’s going to be pressure and competition. Now you’ve just [opened up] a huge, huge competitive market.
Jariel Arvin
What about the US?
Juliette Kayyem
The United States, because we don’t really sign treaties anymore, is not signatory to the Law of the Sea. But we are a member of the Arctic Council, which is a sort of ad hoc [international] system to try to deal with everything in the Arctic, from who has access to what minerals to [how to manage] traffic.
Jariel Arvin
What do you think will be the impact of this new competition?
Juliette Kayyem
There are two pieces: the environmental piece and the geopolitical piece. For the environment, this is the equivalent of an ocean opening up. The waters are going to move in ways that they hadn’t moved before. The ice is melting in ways that mean that the water has to go somewhere, and that is going to cause sea level rise, impacting coastal cities throughout the world.
Absolutely true. The consequences will be shocking; I described it as imagining an ocean just appears on earth. Where does it go? The climate consequences are immeasurable. The security ones as well. This is what China wanted ⬇️ pic.twitter.com/K8NZMYr9Rv
— Juliette Kayyem (@juliettekayyem) February 22, 2021