The 'Heros' Act: Democrats new stimulus much more than stimulus

The House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act – the HEROES Act for short -- a $3 trillion follow-on relief package to the $2.2 trillion package signed into law in March.

The bill passed the House on a vote of 208 to 199. Lawmakers had less than three days to consider the 1,800 pages of legislation.

The math of House Speaker Nancy Pelosi’s latest bailout legislation, misleadingly called the Heroes Act, is mind-boggling.

There has already been roughly $3 trillion in coronavirus response spending approved. The Heroes Act contains another $3 trillion, for a total of $6 trillion. This $6 trillion is more than $18,000 for every person in the United States. Or more than $72,000 for a family of four.

Only a fraction of this is to pay for direct COVID-19 related health-care expenses. The bulk of it is to prop up the economy in one way or another.

For example, the act provides more than a trillion-dollar bailout for state and local governments. In combination with previous appropriations and other forms of financial relief, such as the federal government picking up a larger share of Medicaid expenses, state and local governments would receive around $1.6 trillion in federal assistance.

According to an analysis by the Tax Foundation, that equals 88% of everything state and local governments in the United States were projected to collect in local taxes, prior to the pandemic. That’s vastly in excess of even the most dire prognostication of what the pandemic hit to local revenues will be.

Pelosi could never have imaged that her new HEROES bill could have passed the Senate and/or been signed into law by President Trump. She's been around Washington long enough to know this, but I think her strategy is that when the bill fails to pass, she can blame the Republicans and Trump on not helping the American people.

Unlike the last four coronavirus relief measures, the HEROES Act isn't a product of bipartisan negotiations. House Speaker Nancy Pelosi has defended the ambitious package, arguing that "we must think big for the people now, because if we don't it will cost more in lives and livelihood later. Not acting is the most expensive course."

That's my theory, anyway. Pelosi has always been about power politics; she doesn't care who she helps.

While the has the following provisions that could be considered relief measures, the bill also many provisions that have nothing to do with Covid-19.

The Heroes Act also includes numerous economic relief provisions, including the following:

• Additional direct cash payments to households, including $1,200 per individual earning up to $75,000 per year. Families with dependent children could receive up to $6,000.
• An extension of enhanced unemployment benefits (which is an additional $600 per week) to January 2021.
• Hazard pay for essential workers.
• Housing assistance to help renters and homeowners with rent and mortgage payments.
• Debt collection relief.
• Direct financial relief to state, local, and tribal governments.
• Billions of dollars dedicated to Coronavirus testing and contact tracing initiatives.
• Provides FY2020 emergency supplemental appropriations to federal agencies.
• Expands paid sick days, family and medical leave, unemployment compensation, nutrition and food assistance programs, housing assistance, and payments to farmers;

Checks for illegal immigrants

The Heroes Act would provide $1200 stimulus payments to illegal aliens by letting people who filed taxes using an Individual Taxpayer Identification Number (ITIN) receive stimulus checks, Forbes reported Friday.

According to the Institute on Taxation and Economic Policy, the Heroes Act also includes a retroactive change to the CARES Act, which included the first round of stimulus checks. The change allows illegal immigrants who file taxes using an ITIN to receive money from initial payments.

Money to study diversity in cannabis

For example, the word "cananbis" appears more in the bill than the word "job," some 68 times. The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, includes a provision that would protect banks that service marijuana businesses from being penalized by federal regulators. The measure includes language requiring research on minority-owned and women-owned marijuana companies.

Representative Jodey Arrington (R-Texas) said it's "suspicious" when more language is devoted to marijuana than jobs.

"You know something is suspicious when the word 'cannabis' is used 68 times—more than 'job' or 'jobs' combined—in an economic stimulus bill. I'm not sure what they were smoking, but whatever socialist euphoria they're feeling will fade fast when it arrives in the Senate," he tweeted.

What else? Something for everyone

Five million dollars for new laptops and other tech equipment for members of Congress.

Ten million for the National Endowment for the Arts and another $10 million for the National Endowment for the Humanities—that's on top of the $75 million for the humanities endowment in an earlier stimulus package this year.

A provision to allow Food and Drug Administration to consider new over-the-counter sunscreen ingredients.

Aside from items intended to directly aid the nation's COVID-19 recovery like rental assistance, student loan bailouts, cash payments to Americans and money for state and local governments whose budgets have been wrecked by the pandemic, some of the priorities that Democrats tucked into the latest 1,800-page proposal include $50 million in "environmental justice" grants to study how communities with disproportionate environmental issues for poor and minority residents were impacted by COVID-19.

Another $40 million would go the U.S. Geological Survey for research related to wildlife-borne disease. The novel coronavirus is believed to have begun with animals before humans were infected.

At least $5 million in the bill would go to museums and libraries, while $250 million would be set aside for grants to help formerly incarcerated people and prevent recidivism.

Everybody gets something, it seems

Money for the U.S. Department of Agriculture to study soil health.

$50 million for the Legal Services Corporation.

$15 billion for state transportation departments.

$100 million for fisheries.

Big spending states get rewarded

Pelosi and her fellow House Democrats are seeking a more than $1 trillion federal bailout for state and local governments. This is in addition to the unprecedented aid Congress already has sent.

Instead of waiting on a handout from Washington, states should clear the way for a more robust economic recovery by addressing their unsustainable finances.

States and local government spending has increased over the recent past, demonstrating room for targeted spending cuts.

After adjusting for inflation and increases in population, state and local spending (in constant 2019 dollars) has grown from $5,596 per person in 2000 to $7,268 per person in 2019.

But not all states spend equally. As of 2017, Florida, Georgia, and Arizona spent about $5,800 per person on state and local governments, but New York spent more than $11,700 per person.

See more detail discussion on state spending here: In charts, how big blue states outspend red states.

Student loan relief

House progressives had originally pushed for $30,000 in across-the-board student loan forgiveness. 

The released version of the bill reduced the forgiveness, but still provided meaningful student loan student relief, including the following:

• $10,000 in federal student loan forgiveness;
• $10,000 in private student loan forgiveness;
• An extension of the CARES Act suspension of payments, interest, and collections on government-held federal student loans through September of 2021, and an expansion of those protections to include commercially-held FFEL-program federal student loans as well as Perkins loans.
• A fix to Public Service Loan Forgiveness that would allow payments made on previously-consolidated federal student loans to potentially count towards the 120 qualifying monthly payments required for the program.

Senate leadership has already described the HEROES Act as “dead on arrival,” before the final version even passed. The Senate is not likely to return to Washington until sometime in June, so no quick action will be taken. The President has also indicated that he opposes the House bill. However, the Democratic House leadership views the passage of this bill as an important negotiating step in crafting a final stimulus bill that can win over sufficient votes in both chambers of Congress to become law.

The bill touches every aspect of Federal law and American life

The bill also modifies or expands a wide range of other programs and policies, including those regarding

• Medicare and Medicaid,
• health insurance,
• broadband service,
• medical product supplies,
• immigration,
• student loans and financial aid,
• the federal workforce,
• prisons,
• veterans benefits,
• consumer protection requirements,
• the U.S. Postal Service,
• federal elections,
• aviation and railroad workers, and
• pension and retirement plans.

However, being signed into law is not entirely the mission of the HEROES Act.

"Instead, its passage was meant for Democrats to demonstrate their priorities and signal what they will fight for in a later bipartisan bill that could pass in June," Business Insider's Kimberly Leonard reported.