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Phase Three coronavirus stimulus bill to include stimulus checks and more

Peter Miller
The Mortgage Reports contributor

What’s in the Phase Three coronavirus stimulus bill?

The Phase Three coronavirus stimulus package is nearly here. The bipartisan measure will benefit millions of U.S. households nationwide in the fight against coronavirus.

The so-called “Phase Three” package is the largest yet. It has an estimated cost of $2 trillion, and builds on two earlier programs.

  1. The Phase One package provided $8.5 billion for coronavirus research, equipment, and vaccine development
  2. The $1.3 trillion Phase Two package made coronavirus tests free. It also extended emergency paid leave, bulked up food assistance, and lengthened unemployment insurance coverage
  3. The Phase Three package will likely provide direct help to Americans through stimulus checks, small business payroll assistance, and unemployment benefits

A final vote has not yet been taken on the Phase Three stimulus package. So we can’t say what exactly will be included.

But it seems clear that the legislation (if passed) will include more direct help for U.S. households then the previous two packages. Here’s what to expect.

>> Related: Current coronavirus relief packages that can help you right now

Stimulus checks could be coming soon

With millions of people downsized or out-of-work, a key proposal has been to assist individuals throughout the country with direct payments.

Yes, the government is actually planning to send every American adult a stimulus check.

There will be uniform payments of $1,200 per person and $500 per child, subject to income caps.

Initial proposals to have a range of payments from $600 to $1,200 per person have been replaced. Instead, there will be uniform payments of $1,200 per person and $500 per child.

How big will my coronavirus stimulus check be?

Not everyone will receive the full $1,200 stimulus check. Full payments will go to individuals with an adjusted gross income of $75,000 or less per person, and $150,000 or less per married couple.

Above those levels, payments will gradually be reduced. There will be no payments to singles earning $99,000 or more or for married couples with incomes above $198,000.

For instance, a family of four will have a maximum one-time payment of $3,400.

The total cost to the government is estimated at $350 billion.

Full payments will go to individuals with an adjusted gross income of $75,000 or less per person, and $150,000 or less per married couple. Above those levels, payments will gradually be reduced.

Households will have instant cash to make mortgage payments as well as other costs. It’s expected that this money will largely flow from individual households into local economies.

The reason for the income limitations is that the government wants the money quickly spent and re-spent.

Spending $350 billion creates a “multiplier effect” as local merchants and landlords take the money they receive and spend it locally.

Alternatively, those with higher incomes might save the money or pay down debts, uses which offer limited benefits for local communities.

>> Related: How to pause mortgage payments if you lost your job due to coronavirus

Small business payroll help

Small businesses across the country have been reducing hours and shutting down.

As one example, the National Restaurant Association estimates that “the industry will sustain at least a $225 billion loss and be forced to eliminate between 5 to 7 million jobs over the next three months.”

The enormity of these shutdowns may create unemployment levels unseen since the Great Depression, when a quarter of the workforce was jobless.

Treasury Secretary Steven Mnuchin has said that unemployment might reach 20%, while James Bullard, president of the Federal Reserve Bank of St. Louis, estimates that unemployment levels could hit 30%.

To help combat closures and layoffs, the Phase Three legislation contains an estimated $387 billion in payroll assistance. The idea is to keep people employed even if they are not working.

To help combat closures and layoffs, the Phase Three legislation contains an estimated $387 billion in payroll assistance.

The idea is to keep people employed even if they are not working. The money will go to companies with fewer than 500 employees in the form of forgivable loans; that is, the loans need not be repaid if certain requirements are met.

The program will allow small business owners to keep staff together and to quickly re-build once the virus passes.

In effect, money for unemployment benefits and welfare will be redirected through small businesses. Workers will not have to file for unemployment if they can stay on the job.

Unemployment benefits enlarged

Under the Phase Three legislation, laid-off workers will get a flat $600 for up to 16 weeks in addition to such other benefits as they might receive.

Laid-off workers will get a flat $600 for up to 16 weeks in addition to such other benefits as they might receive.

The additional $600 a week means an extra $2,400 a month for beneficiaries. That’s a significant amount — especially for individuals and households with limited income.

The money will allow recipients to make mortgage and rental payments as well as other monthly costs.

Other Phase Three stimulus benefits

The Phase Three coronavirus bill also allocates:

  • $130 billion for over-extended local hospitals
  • $150 billion for state and local governments
  • $500 billion for distressed companies

The Phase Three package is the largest emergency program ever, and the one with the most direct benefits for individuals.

In a time of dire need, it will hopefully provide the money needed to keep people fed and to pay mortgages, rent, and bills.

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