Virus Outbreak Congress

In this Tuesday, Dec. 15, 2020, file photo, Senate Majority Leader Mitch McConnell, of Kentucky, speaks during a news conference with other Senate Republicans on Capitol Hill in Washington, while Sen. John Barrasso, R-Wyoming, listens at left.

The $900 billion economic relief package that President Donald Trump signed Dec. 27 includes up to $13 billion in funding that directly benefits agriculture.

Nearly $1 billion will support a dairy donation program and supplemental Dairy Margin Coverage payments for small and medium-sized producers, according to an American Farm Bureau Federation news release. The Paycheck Protection Program will be expanded, allowing small farmers to continue operating and paying their employees, and more help will be made available to specialty and non-specialty crop growers.

Many farmers and ranchers who were previously left out of aid will now qualify for assistance, including growers who were forced to euthanize livestock during the initial wave of the pandemic.

“Farmers who were left out of previous aid packages or whose losses were far more devastating than recognized in initial aid are grateful that their families will be helped, too,” said AFBF President Zippy Duvall. “We recognize the need is great across our entire economy and farm families will join the rest of America in our determination to recover from the hardships caused by the COVID-19 pandemic.”

The bill provides $400 million to pay for milk to be processed into dairy products and donated to non-profit entities like food banks and other feeding programs. Under the framework of the program, the dairy processor and recipient nonprofit develop a plan for donation and distribution, and the U.S. Department of Agriculture reimburses the processor for the associated cost of milk. The bill allows the USDA to adjust the existing Milk Donation Program payments to match the level of payment provided by this new program.

“With difficult months of the pandemic still ahead, it was crucial for lawmakers to come to a bipartisan agreement that helps farmers do what they do best: feed families. To do this, they need financial stability and ways to connect to families in need,” said Jim Mulhern, National Milk Producers Federation president and CEO. “Importantly, this package includes nearly $1 billion in targeted support to help dairy producers continue to feed families throughout these difficult times.”

The package also includes $7 billion for broadband, including $300 million for rural broadband and $250 million for telehealth, which Wisconsin Farmers Union President Darin Von Ruden applauded.

“The shift to living in a virtual realm during the pandemic has shed even more light on how rural and low-income areas are at a disadvantage when it comes to broadband access,” Von Ruden said.

The overall $900 billion economic relief package will deliver vital aid to millions of struggling households and businesses. Yet Trump’s nearly one-week delay in signing the bill means that it will take that much longer for the financial support to arrive.

The package that Trump signed at his private club in Florida Dec. 27 will extend two unemployment benefit programs providing aid to 14 million people that expired Dec. 26. It will also provide small business loans and up to $600 in cash payments to most individuals. In addition, it extends a moratorium on evictions for one month. The measure does not include aid for states and localities that are being forced to turn to layoffs and service cuts as their tax revenue dries up — a potential long-run drag on the economy.

The legislation extends the two federal jobless aid programs until mid-March and adds a $300 supplemental weekly payment. But because Trump signed the bill on Dec. 27, a day after the two programs lapsed, that could cost the unemployed a week of benefits, with payments not restarting until mid-January.

“The date was really unfortunate,” said Michele Evermore, a senior policy analyst at the National Employment Law Project, a workers’ advocacy group. “Now there’s some question as to when this gets paid out.”

It is possible that the Labor Department will interpret the law to allow payments for the week ending Jan. 2, Evermore said. But if the bill had been signed Dec. 26, payments clearly could have restarted the next week.

And it will likely take two to three weeks for states to update their computer systems to resume the aid programs and pay out the extra $300, Evermore said, a process that could have started earlier, after Congress first approved the bill.

The delay will force those out of work to make hard decisions about paying for food, medicine or rent.

“These are people who have been living in poverty for months,” she said. “Any delay is an immense hardship.”

Months from now, economists say, the widespread distribution and use of vaccines could potentially unleash a robust economic rebound as the virus is quashed, businesses reopen, hiring picks up and consumers spend freely again. Yet the aid likely won’t last long enough to support struggling small businesses and the unemployed until the vaccine has been broadly distributed and a strong rebound has begun.

“Some aid is better than no aid,” said Gregory Daco, chief U.S. economist at Oxford Economics. “It’s positive. But it’s likely going to be insufficient to bridge the gap from today until late spring or early summer, when the health situation fully improves.”

President-elect Joe Biden has said he will seek another relief package soon after his inauguration next month, setting up another political brawl given that some Senate Republicans have said that with vaccines on the way, further government aid may be unnecessary.

The new aid package should boost the broader economy, according to Goldman Sachs. Economists at the investment bank said Dec. 27 that they are boosting their growth forecast for the first three months of next year to 5% at an annual rate, up from an earlier estimate of 3%.

Much of that upgrade is based on the inclusion of $600 stimulus checks, Goldman economists said.

Right now, however, the economy is in a renewed slump as a resurgent virus intensifies hardships for businesses. Consumers have cut back on shopping, traveling, dining out and attending sports and entertainment events. Key measures of the economy — retail sales, applications for jobless aid, travel spending — have weakened.

Roughly 14 million Americans faced a cutoff of their federal unemployment benefits if Congress hadn’t agreed to the new package after months of stalemate. Perhaps 2 million Americans would have been able to transfer to a state-run extended benefit program, but the rest would have had no income at all. More than 4 million have already used all the unemployment aid available to them, which lasts 26 weeks in most states; they will be able to reapply.

A program that provides unemployment aid for self-employed and contract workers will now pay benefits for 50 weeks, up from 39. A federal program that provides extended benefits, on top of the 26 provided by most states, will also last for another 11 weeks.

The much larger rescue package the government enacted in March was widely credited with averting a disaster. By injecting money quickly into the pockets of individual Americans, it served to reduce poverty. But as much of that aid expired over the summer, poverty grew. Many people ran through the $1,200 direct payment checks that had been distributed in April and May. And a supplemental $600 in jobless benefits expired over the summer.

According to research by Bruce Meyer at the University of Chicago and two colleagues, the U.S. poverty rate jumped from 9.3% in June to 11.7% in November — an increase of nearly 8 million people.

The new relief package restores the Paycheck Protection Program, which offers forgivable loans to many businesses. But many small businesses complain that the program in the past was too restrictive, requiring them to use most of the money on payroll and not enough for other expenses like rent, the cost of personal protective equipment or other supplies.

According to the data firm Womply, about one in five small businesses have closed since early spring. More than half of small businesses have just two months’ cash on hand or less, and one in six has two weeks or less of cash, according to a survey by the Census Bureau.

“It’s not stimulus — it’s a survival plan,’’ Michael Graetz, a Columbia University law professor who studies tax and social policies, said of the new relief package. “Will it allow people to survive for a little longer than they would have otherwise, given what was about to happen at the end of the year? The answer is yes. Not doing it would have been malpractice.’’

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