Biden Signs $1.9 Trillion COVID-19 Relief Bill

Biden Signs $1.9 Trillion COVID-19 Relief Bill

ABI Bankruptcy Brief

March 11, 2021

ABI Bankruptcy Brief

Biden Signs $1.9 Trillion COVID-19 Relief Bill

President Joe Biden today signed the $1.9 trillion pandemic-relief bill into law, capping his first major legislative achievement and allowing aid to flow to tens of millions of individuals, businesses, and state and local governments, Bloomberg News reported. Biden signed the bill in an Oval Office ceremony alongside Vice President Kamala Harris, one day sooner than expected. Congress sent the measure to Biden’s desk on Wednesday after the House passed it on a 220-to-211 vote along party lines. No Republicans supported the bill in the Senate, either. Under the just-passed law, most Americans will begin receiving $1,400 direct payments, with disbursal starting within days. The measure provides additional child-tax credits and new health-insurance subsidies while extending a $300 per week supplemental unemployment benefit into September. State and local governments will get more than $360 billion, cash-strapped union pension funds get a rescue, schools are set to receive money to speed re-opening, and funds will go to ramp up vaccinations.

House Lawmakers Strike Bipartisan Deal to Extend Small Business Loan Program

The leaders of the House Small Business Committee reached a bipartisan agreement to extend the Paycheck Protection Program for two months amid growing concern that its March 31 expiration would deprive many employers of aid, POLITICO reported. The deal struck by House Small Business Chair Nydia Velázquez (D-N.Y.) and Rep. Blaine Luetkemeyer (R-Mo.), the committee's top Republican, would delay the PPP's loan application deadline to May 31. It would also give the Small Business Administration authority to continue processing pending applications for 30 days after that date. The PPP, the source of more than $687 billion in pandemic relief, offers government-backed small business loans that can be forgiven if employers agree to maintain payroll. The House will vote on the bill next week, a senior Democratic aide said, before members leave Washington until mid-April. The biggest hurdle in enacting the bill would be the Senate, where it would likely need unanimous agreement to expedite passage and avoid a lengthy floor debate. But in a sign of potentially broad bipartisan support, the House will take up the bill using an accelerated procedure requiring support from two-thirds of members. The delayed deadline would provide relief to businesses seeking PPP aid as well as lenders responsible for submitting loan applications to the SBA.

U.S. Weekly Jobless Claims Drop to Four-Month Low

The number of Americans filing new claims for jobless benefits dropped to a four-month low last week as an improving public health environment allows more segments of the economy to reopen, putting the labor market recovery back on track, Reuters reported. Still, a full recovery from the deep scars inflicted by the COVID-19 pandemic will probably take years, with the weekly unemployment claims report from the Labor Department today also showing a whopping 20.1 million Americans collecting unemployment checks in late February. Initial claims for state unemployment benefits decreased 42,000 to a seasonally adjusted 712,000 for the week ended March 6, the lowest level since early November. Data for the prior week was revised to show 9,000 more applications received than previously reported. Unadjusted claims dropped by 47,170 to 709,458 last week amid declines in Texas, New York and Mississippi, where claims had been boosted in the prior period by harsh weather. Claims rose in Ohio, which has been plagued by fraudulent applications.

Companies Are Holding Off on Firing Workers Right Now

Millions of workers have been laid off during the pandemic, but cutting ties with individual employees over performance issues has become vastly more complicated, several employers say, the Wall Street Journal reported. Companies had underperforming workers when virus-related lockdowns began, and they still do now. Yet as their workers contend with a year of pandemic stresses — from school closures to child-care crises to burnout from long homebound workdays — many businesses are reluctant to fire or even raise issues of underperformance for now, executives and corporate advisers say. Since the pandemic was declared nearly a year ago, the U.S. has shed 9.5 million jobs, according to the Labor Department, but the government doesn’t track performance-related firings. Some companies and human-resources advisers, though, say many employers are unofficially preaching forbearance. Termination means being cast into a fragile job market and, often, losing health insurance during a global health crisis. Without a clear line of sight into the daily challenges of remote teams, some business leaders say they often are unsure what is at the root of performance problems, especially if the worker has been a good employee in the past.  (Subscription required.)

In related news, two airline giants said that they would cancel tens of thousands of planned layoffs because of aid earmarked for them in the $1.9 trillion stimulus measure passed by Congress this week, an early sign of job losses averted by the landmark package, the Washington Post reported. Scott Kirby, CEO of United Airlines, which had warned employees about 14,000 layoffs last month, said in a social media post that Congress’s new funding for airlines would allow the workers to receive their paychecks and health care through September. American Airlines said that it planned to rescind notices it sent last month to 13,000 employees about coming layoffs. The $1.9 trillion stimulus package Congress passed yesterday, which was signed into law by President Biden today, delivers payments for middle- and lower-income households and expands unemployment benefits for workers. It also sets aside hundreds of billions of dollars for cities and states, school reopenings, vaccine distribution and testing, and other health care funding. Unlike previous stimulus efforts, Biden’s relief package includes far less for companies, but it does include $65 billion that is directed to a range of hurting industries, including restaurants, aviation, live entertainment and tourism.

U.S. Household Wealth Hits Record $130 Trillion Despite Pandemic

Combined household wealth in the U.S. hit a record $130.2 trillion in the last quarter of 2020 despite the devastating economic effects of the coronavirus, according to Federal Reserve data released today, The Hill reported. Household wealth jumped 10.1 percent last year compared with 2019, driven in large part by surging stock and home prices after interest rates were lowered to combat the financial fallout of the pandemic. The Fed data does not break down the distribution of wealth, meaning it could mask the effects of inequality. Wealthy households are far more likely to own stocks and real estate than households in other income brackets. In the fourth quarter alone, stock values rose $4.9 trillion, while real estate shot up $900 billion. Those two assets accounted for more than 80 percent of the overall increase in wealth during the final three months of 2020. Balances in cash, checking accounts and savings deposits rose by $642.7 billion, according to a calculation of the data from Reuters, reaching their own record of $14.1 trillion.

ASM Spotlight: Don't Miss "The State of the Industry: Perspectives, Opportunities and Predictions" Plenary

ABI’s Annual Spring Meeting returns April 12-22, bringing top bankruptcy practitioners, judges and academics together via an enhanced virtual platform to discuss the most important issues facing the profession. “The State of the Industry: Perspectives, Opportunities and Predictions,” the opening plenary session, sets the stage for the conference by discussing the economic, scientific and behavioral influences that will, at least in part, shape the restructuring landscape in the coming year. Led by a major international media organization, the panel discussion will include leaders in industry, economics, banking and finance, and will focus on macroeconomic predictions for 2021, industry expectations and risks, and how the pandemic and COVID-19 vaccine will impact the economy in 2021 and thereafter.

Evolve and grow your practice by registering for ABI's Annual Spring Meeting today!

Submissions for Asset Sales Committee’s “Asset Sale of the Year” Award Extended to April 5!

ABI’s Asset Sales Committee has extended the application period for its 3rd Annual Asset Sale of the Year Award. Submissions are now due by Monday, April 5, 2021. Criteria for submissions include:

• Completion of a sale that was strategic and provided stakeholders with value;
• A display of excellence across the full spectrum of the sale process, from the initial targeting through pursuit, structuring and financing to complete a transaction;
• A sale that reflects a high level of professional expertise in the design of the transaction, and that tested creativity and skill in completing the transaction; or
• A sale of strategic or legal significance and impact (winning entries might focus on overcoming challenges to complete the sale, innovative financial engineering, and motivating agreement across multiple stakeholders)

A bankruptcy sale (via either § 363 or a plan) that closed between January 1 and December 31, 2020.

At least one professional involved in the sale must be a member of the Asset Sales Committee as of the nomination deadline. Self-nominations are permitted.

Click here for more information.

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New on ABI’s Bankruptcy Blog Exchange: Chopra, Gensler Nominations Move Forward

Biden’s CFPB and SEC choices move to the full Senate following mostly party-line banking committee votes, according to a recent blog post.

To read more on this blog and all others on the ABI Blog Exchange, please click here.

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