In economics, stimulus refers to attempts to use monetary policy or fiscal policy (or stabilization policy in general) to stimulate the economy. Stimulus can also refer to monetary policies such as lowering interest rates and quantitative easing .
61-613: The Coronavirus Aid, Relief, and Economic Security Act , also known as the CARES Act , is a $ 2.2 trillion economic stimulus bill passed by the 116th U.S. Congress and signed into law by President Donald Trump on March 27, 2020, in response to the economic fallout of the COVID-19 pandemic in the United States . The spending primarily includes $ 300 billion in one-time cash payments to individual people who submit
122-724: A federal building in Washington, D.C. Eric Trump said he hoped the General Services Administration would treat the Trump Organization "the same" as its other tenants.) Political donors are eligible for loans under the Paycheck Protection Program. As of May 3, the largest beneficiary of relief loans under this program is the hotel group Ashford Hospitality Trust. The company is run by Monty Bennett, who donated over half
183-608: A $ 3 trillion relief bill called the HEROES Act , but the Republican-controlled Senate never brought it to a vote. There was no other significant economic relief bill until late December 2020 when Congress reached an agreement on a $ 900 billion stimulus. The Act includes the following provisions. The Act: The Act: Businesses owned by the president, senior government officials, and their immediate families are ineligible for funds distributed through
244-576: A $ 500 billion corporate bailout fund established by the legislation. A provision in the legislation empowers the special inspector general to audit the use of the fund; requires the Treasury Department and other executive-branch entities to provide information to the special inspector general; and directs the special inspector general to report to Congress "without delay" if an agency unreasonably withholds requested information. The Pandemic Response Accountability Committee will coordinate
305-456: A U.S. District Court issued an order certifying a nationwide class of incarcerated individuals. The court also granted a preliminary injunction requiring the IRS and Treasury Department to stop withholding checks solely on the basis of their incarceration status, resulting in payment of $ 100M (0.04% of the total value of all payments). Some citizens of other countries were accidentally given checks on
366-518: A government grant of nearly $ 27 million that it does not have to repay. In 2016, the company's founder, Clay Lacy , donated $ 47,000 to the Republican Party after it officially nominated Trump and also donated the maximum allowable $ 2,700 directly to the Trump campaign. Some individuals received checks in the mail, while others received direct deposits in their bank accounts. On May 18,
427-538: A large stimulus package that, at the time, was envisioned to be about $ 1 trillion, United States Secretary of the Treasury Steven Mnuchin told Republican Senators the United States unemployment rate could reach 20% if no government action was taken. Almost 3.3 million Americans filed for unemployment in the week ending March 21, "nearly five times more than the previous record of 695,000 set in 1982". On March 20, Goldman Sachs predicted
488-476: A lobbyist; received $ 10 million); Flotek Industries (employed ambassador to Germany Richard Grenell as a consultant; received $ 4.6 million); and MiMedx (their former chief executive Parker H. Petit was Trump's 2016 finance chairman in Georgia; received $ 10 million). Clay Lacy Aviation , a California-based private jet charter company that serves business executives and celebrities, received
549-487: A million dollars to Republicans in the current election cycle; Bennett received the loans after hiring lobbyist Jeffrey Miller, who fundraised over $ 1 million for Trump's reelection . The company had applied for $ 126 million in loans and had already received $ 76 million when, following criticism, it announced it would return these funds. Other recipients with ties to the Trump administration include Hallador Energy (employed EPA administrator Scott Pruitt as
610-522: A program that helps restaurants increase healthful options on kids' menus and makes it easy for parents to find those options when dining out. The association works closely with its state restaurant and hospitality association partners and provides its members with tools and solutions to improve their business. It also organizes conferences and networking events for its members. There are six membership categories: Restaurant, Allied, Faculty, Student, Nonprofit, and International. The association lobbies for
671-529: A result of bipartisan negotiations, the bill grew to $ 2 trillion in the version unanimously passed by the Senate on March 25, 2020. It was passed by the House via voice vote the next day, and was signed into law by President Donald Trump on March 27. It was originally introduced in the U.S. Congress on January 24, 2019, as H.R. 748 ( Middle Class Health Benefits Tax Repeal Act of 2019 ). To comply with
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#1732766024645732-399: A result of the social distancing measures meant to curb the virus. These measures included working from home, widespread cancellation of events, cancellation of classes (or moving in-person to online classes), reduction of travel , and the closure of businesses. In March, it was predicted that, without government intervention, most airlines around the world would go bankrupt. On March 16,
793-919: A tax return in America (with most single adults receiving $ 1,200 and families with children receiving more), $ 260 billion in increased unemployment benefits, the creation of the Paycheck Protection Program that provides forgivable loans to small businesses with an initial $ 350 billion in funding (later increased to $ 669 billion by subsequent legislation ), $ 500 billion in loans for corporations, and $ 339.8 billion to state and local governments. The original CARES Act proposal included $ 500 billion in direct payments to Americans, $ 208 billion in loans to major industry, and $ 300 billion in Small Business Administration loans. As
854-463: A third stimulus package, amounting to more than $ 1 trillion. It was suggested that $ 200–500 billion would fund tax rebate checks to Americans who made between $ 2,500 and $ 75,000 in 2018 to help cover short-term costs via one or two payments of $ 600–1,200 per adult and $ 500 per child. Democrats prepared a $ 750 billion package as a counter-offer , which focused on expanding unemployment benefits instead of tax rebates. A compromise plan
915-523: A time when public health officials have urged Americans to avoid nonessential travel and gathering in large groups". Massie's actions received bipartisan criticism. Former Secretary of State John Kerry , a Democrat, tweeted "Congressman Massie has tested positive for being an asshole. He must be quarantined to prevent the spread of his massive stupidity," a message which was shared by Donald Trump on Twitter. Republican Representative Peter T. King called Massie's actions "disgraceful" and "irresponsible". Despite
976-643: Is a restaurant industry business association in the United States , representing more than 380,000 restaurant locations. It also operates the National Restaurant Association Educational Foundation. The association was founded in 1919 and is headquartered in Washington, D.C. The National Restaurant Association is a powerful lobbying force in Washington, D.C. and in state capitals, where it
1037-585: Is a critical tool in alleviating hunger" because it "encourages donating the food to charity, by helping to offset the costs associated with preserving, storing and transporting the extra food." The NRA opposed the National Labor Relations Board 's joint employer standard, but was unable to affect a change in legislation repealing the standard. The National Restaurant Association develops food safety training and certification program for restaurant employees. ServSafe , administered by
1098-666: Is a wartime level of investment for our nation." McConnell continued the analogy to war by saying the CARES Act would provide "ammunition" to health care workers who are the "frontline heroes who put themselves at risk to care for patients" by providing them "the ammunition they need". Chuck Schumer stated on the Senate floor, "Like all compromises, this bill is far from perfect, but we believe the legislation has been improved significantly to warrant its quick consideration and passage, and because many Democrats and Republicans were willing to do
1159-510: Is widely referred to as "the other NRA" to distinguish itself from National Rifle Association of America , which shares the initialism . The association advocates to suppress the minimum wage in the United States as well as opposing laws requiring paid sick leave . In July 2013, it boasted that it had successfully lobbied against raises in the minimum wage , in part or in full, in 27 of 29 states and blocked paid sick leave legislation in 12 states. It also takes credit for halting any increase in
1220-569: The Origination Clause of the Constitution , the Senate then used H.R. 748 as a shell bill for the CARES Act, changing the content of the bill and renaming it before passing it. Unprecedented in size and scope, the legislation was the largest economic stimulus package in U.S. history, amounting to 10% of total U.S. gross domestic product. The bill is much larger than the $ 831 billion stimulus act passed in 2009 as part of
1281-494: The real bills doctrine as a causative factor in the Great Depression . It is often argued that fiscal stimulus typically increases inflation , and hence must be counteracted by a typical central bank. Hence only monetary stimulus could work. Counter-arguments say that if the output gap is high enough, the risk of inflation is low, or that in depressions inflation is too low but central banks are not able to achieve
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#17327660246451342-431: The $ 500 billion Economic Stabilization Fund. A business falls into this category if it is at least 20% owned or controlled by a person in the restricted group. Such businesses may nonetheless still be eligible for funds distributed through the $ 669 billion Paycheck Protection Program or through the $ 15 billion change to the tax code. Jared Kushner's businesses may generally be eligible for relief under
1403-399: The 2020–2030 period. The estimate includes: CBO reported that not all parts of the bill will increase deficits. "Although the act provides financial assistance totaling more than $ 2 trillion, the projected cost is less than that because some of that assistance is in the form of loan guarantees, which are not estimated to have a net effect on the budget. In particular, the act authorizes
1464-531: The Coronavirus Relief Fund (CRF) established by the CARES Act. The House initially passed a tax cut bill in mid-2019 and sent it to the Senate, which then used it as a shell bill and added an amendment in the nature of a substitute , fulfilling the constitutional requirement that all bills for raising revenue must originate in the House. After the new bill was released by the Senate, Speaker of
1525-677: The Economic Stabilization Fund because, according to The New York Times , he usually owns less than 20% of his family's real estate projects. On April 21, the Trump Organization said it would not seek a Small Business Administration federal loan. (It was, however, seeking relief from the General Services Administration to which it normally pays rent of about $ 268,000 per month to operate the Trump International Hotel in
1586-968: The Faces of Diversity, the American Dream Awards, and the Restaurant Neighbor Award. It runs an annual restaurant and hospitality industry trade show in the US, in Chicago , and conducts research about the country's restaurant industry. For instance, it states that the restaurant industry in the US in 2021 employs 14.5 million Americans (up from 12.5 million in 2012), with sales in 2021 at $ 799 billion (up from $ 632 billion in 2012). The National Restaurant Association also helps restaurant owners increase their environmental sustainability efforts. The National Restaurant Association teamed up with Healthy Dining to launch Kids LiveWell,
1647-715: The Federal Reserve return unused funds to the Treasury. After the enactment of the CARES Act, the Treasury Department and Internal Revenue Service (IRS) disbursed about 160.4 million payments totaling $ 269 billion by the end of April 2020, of which nearly 1.1 million payments, totaling almost $ 1.4 billion (0.5% of the total value of all payments), were sent to dead people. A Government Accountability Office report in June 2020 noted that, in
1708-473: The House Nancy Pelosi ( D - CA ) issued a statement that read in part: "We are beginning to review Senator McConnell's proposal and on first reading, it is not at all pro-worker and instead puts corporations way ahead of workers." Senate Minority Leader Chuck Schumer (D- NY ) criticized the fact that Democrats were not involved by Republicans in drafting the bill. Among Senate Republicans there
1769-490: The National Restaurant Association, and accredited by ANSI , provides training on foodborne illnesses and food allergens. It also offers scholarships to foodservice and hospitality management and culinary students through NRAEF. It also created and runs ProStart, a national culinary and restaurant management program for high school students . The NRA also presents a series of awards, including
1830-611: The Secretary of the Treasury to provide up to $ 454 billion to fund emergency lending facilities established by the Board of Governors of the Federal Reserve System. Because the income and costs stemming from that lending are expected to roughly offset each other, CBO estimates no deficit effect from that provision." On November 19, 2020, Treasury Secretary Mnuchin sent a letter to the Federal Reserve requesting that
1891-816: The Special Inspector General for Pandemic Recovery (SIGPR) insofar as his constitutional powers as president enabled him to block the SIGPR's reports to Congress. According to The New York Times , the statement was consistent with Trump's "history of trying to keep damaging information acquired by an inspector general from reaching Congress". Part of the CARES act set aside $ 8 billion to federally-recognized "tribal governments". The Treasury Department earmarked about $ 500 million of those funds to go towards Alaska Native corporations (ANCs), which provided similar governance as typical tribal leadership in
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1952-533: The Treasury Department said that future payments may be issued in the form of prepaid Visa debit cards rather than checks. The Act: Other pieces of legislation established an Emergency Rental Assistance (ERA) program. The Consolidated Appropriations Act, 2021 (Division N of P.L. 116-260) set aside $ 25 billion, while Section 3201 of the American Rescue Plan Act (P.L. 117-2) set aside an additional $ 21.5 billion. These were to be funded by
2013-444: The U.S. gross domestic product would "decline by 24% in the second quarter of 2020 because of the coronavirus pandemic". Deutsche Bank predicted the U.S. economy would shrink by 12.9% in the second quarter of 2020. Two relief bills were signed by President Trump early in 2020: $ 8 billion on March 6, and $ 192 billion on March 18. It was apparent to Congress that these would not be sufficient. A much larger third package, which
2074-531: The basis of having previously worked or lived in the U.S. Stimulus (economics) A stimulus is sometimes colloquially referred to as " priming the pump " or " pump priming ". During a recession , production and employment are far below their sustainable potential due to lack of demand . It is hoped that increasing demand will stimulate growth and that any adverse side effects from stimulus will be mild. Fiscal stimulus refers to increasing government consumption or transfers or lowering taxes, increasing
2135-443: The bill's strong unemployment provisions "encourage employees to be laid off instead of working". Senator Bernie Sanders then threatened to block the legislation and impose more stringent conditions for the $ 500 billion earmarked for corporate bailouts if the unemployment provision was removed by the proposed amendment of the four Republican Senators. To address these concerns, Senate leaders "agreed to allow an amendment vote on
2196-667: The committee. Michael E. Horowitz instead became the acting chair. By late April, there were at least four investigations into the government's response to the pandemic; on April 28, some inspectors general from the Pandemic Response Accountability Committee updated the House Oversight Committee about these investigations. The legislation also requires oversight by a separate Special Inspector General for Pandemic Recovery (SIGPR) who will monitor loans and investments from
2257-567: The crisis via an earned income tax credit . On March 16, Republican senators Mitt Romney and Tom Cotton stated their support for a $ 1,000 basic income, Romney saying it should be a one-time payment to help with short-term costs. On March 17, the Trump administration indicated that some payment would be given to non-millionaires as part of a stimulus package. With guidance from the White House, Senate Majority Leader Mitch McConnell proposed
2318-452: The crisis". Early in the morning of Wednesday March 25, Senate leaders announced they had come to an agreement on a modified version of the CARES Act, the full text of which exceeds 300 pages. Mitch McConnell "announced news of a breakthrough on the Senate floor shortly after 1:30 a.m. Wednesday". Senator McConnell said on the floor, "[we have] reached a bipartisan agreement on a historic relief package for this pandemic ... this
2379-412: The criticism Massie continued to defend his actions, claiming that the act was full of pork barrel spending and that very little of the total money would actually go to citizens. The House passed the bill on March 27 by a near-unanimous, unrecorded voice vote . A few hours after the House passed the bill, it was signed into law by President Trump. In a signing statement , Trump suggested he could gag
2440-647: The different implications of these two conflicting explanations. President of the Federal Reserve Bank of Richmond , Jeffrey M. Lacker , with Renee Haltom, has criticized Bernanke's solution because "it encourages excessive risk-taking and contributes to financial instability." Thomas M. Humphrey and Richard Timberlake concentrated in their book "Gold, the Real Bills Doctrine, and the Fed: Sources of Monetary Disorder 1922–1938" on
2501-418: The fact that five Republican Senators were in self-quarantine: Senator Rand Paul , who had tested positive for COVID-19 , as well as Senators Mike Lee , Mitt Romney, Cory Gardner , and Rick Scott . Nancy Pelosi indicated that the House would prepare its own bill, expected to exceed $ 2.5 trillion, as a counter-offer, which was criticized by Republicans as "a progressive wishlist seemingly unrelated to
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2562-529: The fact that the Federal Reserve did not counteract the sudden reduction of money stock and velocity. Ben Bernanke argued, instead, that the problem was lack of credit , not lack of money, and hence, during the Great Recession , the Federal Reserve led by Bernanke provided additional credit, not additional liquidity (money), to stimulate the economy back on course. Jeff Hummel has analyzed
2623-746: The federal minimum wage for tipped employees, which has remained at $ 2.13 per hour since 1991. (The federal "basic combined cash & tip minimum wage rate" is $ 7.25 per hour). The NRA supported the Fighting Hunger Incentive Act of 2014 (H.R. 4719; 113th Congress), a bill that would amend the Internal Revenue Code to make permanent extend and to expand certain expired provisions that provided an enhanced tax deduction for businesses that donated their food inventory to charitable organizations . The NRA argued that "the deduction for charitable donation of food inventory
2684-479: The floor". The Republican-led amendment to cap unemployment benefits failed in a 48–48 vote. Late in the night of March 25, 2020, the Senate passed the $ 2 trillion bill in a unanimous 96–0 vote. Four Republicans did not vote, namely John Thune , who was "feeling ill", Rand Paul (who had tested positive for COVID-19 ), and Mitt Romney and Mike Lee , who were both in isolation after having had contact with Senator Paul. On March 25, Pelosi said that "many of
2745-452: The hurry to distribute payments, the agencies had not followed post-2013 financial control safeguards to prevent payments to the dead or other ineligible persons. The report added that "agencies have made only limited progress so far in achieving transparency and accountability goals." The IRS put a notice on their website that incarcerated individuals did not qualify and withheld or retrieved payments from many prisoners. On September 24, 2020,
2806-642: The lower 48 states. Three native Indian tribes sued on the basis that under the Indian Self-Determination and Education Assistance Act of 1975 (ISDA), ANCs were not federally-recognized tribal governments and should not be eligible for CARES funds. The case was eventually heard by the United States Supreme Court , which ruled in June 2021 that ANCs did qualify as tribal governments under the ISDA, and thus eligible to receive
2867-437: The people who are working every day, just a blank check to everybody in America making up to $ 75,000." On the evening of Sunday, March 22, 2020, Senate Democrats blocked the bill in a key procedural vote; the vote was 47–47, while 60 votes were needed to proceed. Immediately thereafter, " Dow futures hit their 5% 'limit down' overnight, and were off 600 points at one stage Monday morning." In response, Mitch McConnell announced
2928-493: The provisions in there have been greatly improved because of negotiation," and hoped to pass the bill by unanimous consent. Representative Thomas Massie , a Republican from Kentucky, attempted to maneuver for a roll-call vote , but the quorum present did not support the idea. Massie's threat to demand a recorded vote nonetheless "compelled dozens, if not hundreds, of lawmakers to return to Capitol Hill from their home districts, navigating across interstates and through airports at
2989-410: The rate of growth of public debt . Supporters of Keynesian economics assume the stimulus will cause sufficient economic growth to fill that gap partially or completely via the multiplier effect. Monetary stimulus refers to lowering interest rates, quantitative easing , or other ways of increasing the amount of money or credit. Milton Friedman argued that the Great Depression was caused by
3050-855: The required inflation rate without fiscal stimulus by the government. Monetary stimulus is often considered more neutral: decreasing interest rates make additional investments profitable, but yet only the most additional investments, whereas fiscal stimulus where the government decides the investments may lead to populism via public choice theory , or corruption . However, the government can also take externalities into account, such as how new roads or railways benefit users who do not pay for them, and choose investments that are even more beneficial although not profitable. Supporters of Keynesian economics are typically strongly in favor of stimulus. Austrian economic school and Rational expectations economists are typically against stimulus. National Restaurant Association The National Restaurant Association
3111-617: The response to the Great Recession . The Congressional Budget Office estimates that it will add $ 1.7 trillion to the deficits over the 2020–2030 period, with nearly all the impact in 2020 and 2021. Lawmakers refer to the bill as "Phase 3" of Congress's coronavirus response. The first phase was the Coronavirus Preparedness and Response Supplemental Appropriations Act that provided for vaccine research and development. The Families First Coronavirus Response Act , which focused on unemployment and sick leave compensation,
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#17327660246453172-609: The restaurant and foodservice industry and represents the industry on Capitol Hill . It was the largest food and beverage political action committee contributor to both the U.S. Democratic and Republican Parties in the 2004 election cycle. The association is actively opposing the lowering of the federal blood alcohol content limit from 0.08% to 0.05% In May 2010 the Healthy Weight Commitment Foundation with 16 major food companies, including Mars Inc. , Coca-Cola , and General Mills , with
3233-414: The second key procedural vote on the CARES Act, a cloture vote to end debate, on Monday, March 23; 60 votes were needed, but it failed 49–46. Both procedural votes were on a "shell" bill framed to repeal an Obamacare tax which passed the House on July 17, 2019. For procedural reasons, the text was replaced by the new language passed by the Senate. Procedural votes for the bill were made more difficult by
3294-443: The serious and hard work, the bill is much better off than where it started." The result of the agreement between Senate leaders and the White House was a $ 2 trillion bill that "is the largest economic relief bill in U.S. history". The bill was criticized by Representative Alexandria Ocasio-Cortez and New York Governor Andrew Cuomo . Republican Senators Lindsey Graham , Tim Scott , Ben Sasse , and Rick Scott expressed concern
3355-445: The set-aside funds. The legislation required the creation of a Pandemic Response Accountability Committee. On March 30, the inspectors general selected Glenn Fine , who had been an inspector general in four presidential administrations and who was serving as acting Pentagon inspector general , to chair the committee. One week later, Trump removed Fine from his position as acting Pentagon inspector general, making him ineligible to chair
3416-685: The trade group representing the U.S. airline industry requested a $ 50 billion federal bailout. On March 18, the National Restaurant Association wrote the President and Congress with an estimate that "the industry's sales will decline by $ 225 billion during the next three months, which will prompt the loss of between five and seven million jobs," accompanied by a request of $ 145 billion of aid to restaurants. In an effort to gain Republican support for
3477-504: The work of the SIGPR. Amidst reports that Trump would nominate White House lawyer Brian Miller for this job, Montana Senator Jon Tester and Utah Senator Mitt Romney drafted a letter to the president requesting a different, independent Special Inspector General. Miller was confirmed by the Senate on June 2. The Congressional Budget Office provided a preliminary score for the CARES Act on April 16, 2020, estimating that it would increase federal deficits by about $ 1.7 trillion over
3538-501: Was "significant debate and disagreement" regarding " Donald Trump 's proposal to provide most Americans with $ 1,000-plus checks to boost spending and stimulate the economy". Senator Richard Shelby (R- AL ), the Republican chair of the Senate Appropriations Committee , stated "I personally think that if we're going to help people we should direct the cash payments maybe as a supplement to unemployment, not to
3599-491: Was made to set aside $ 250 billion for tax rebates and the same amount for unemployment. On April 21, 2020, the Senate approved the Paycheck Protection Program and Healthcare Enhancement Act , providing $ 484 billion in additional funding to the existing Paycheck Protection Program, and President Trump signed it into law three days later. On May 15, 2020, the Democratic-controlled House passed
3660-568: Was phase 2. All three phases were enacted the same month. An additional $ 900 billion in relief was attached to the Consolidated Appropriations Act, 2021 , which was passed by Congress on December 21, 2020, and signed by President Trump on December 27, after some CARES Act programs being renewed had already expired. In response to the COVID-19 pandemic, dramatic global reduction in economic activity occurred as
3721-467: Was to become the CARES Act, was negotiated. In mid-March 2020, Democratic politicians Andrew Yang , Alexandria Ocasio-Cortez , and Tulsi Gabbard advocated for universal basic income in response to the COVID-19 pandemic in the United States ; Gabbard suggested that it be a temporary measure until the crisis subsides. On March 13, Democratic representatives Ro Khanna and Tim Ryan introduced legislation to provide payments to low-income citizens during
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