Explained: US Congress clears $900 bn Covid-19 package. How will it help Americans?

Following several months of wrangling, the US Congress cleared a $900 billion coronavirus aid package Monday night, with both the House of Representatives and the Senate clearing the aid bill. Outgoing President Donald Trump is now expected to sign the bill into law.

What does this Covid-19 package bill entail?

The cleared aid package entails direct jobless benefits for Americans below a threshold income level, alongside support for businesses and unemployment programmes. A number of Covid-19 relief programmes were set to expire at the end of the month and about 12 million Americans were at risk of losing access to benefits, if the legislation had not gone through.

At over 5,500 pages, the legislation was described by the Associated Press as “the longest bill in memory and probably ever”. The deal, which has been hanging fire for months, was announced on Sunday by Senate Majority Leader Mitch McConnell.

What are the key benefits in the Covid-19 package?

The stimulus includes $600 payments to most Americans, and will supplement unemployment payments by $300 per week. It also contains more than $300 billion in support for companies, alongside funds for vaccine distribution and rental aid. The payment is half the amount that the US Congress approved for direct payments during the first round of pandemic relief earlier this year.

Why is this important for the US, and even markets such as India?

Delays in clearing the package had led to concerns over whether the US government would shut down without a spending bill. Washington has been operating on temporary funding since October, the commencement of the US federal government’s financial year.

This is important as the $2.4 trillion economic relief package has been credited with cushioning the US economy from the impact of the pandemic. The impact of the legislative action could resonate beyond the US, in terms of assuaging market sentiments across geographies, especially coming a day after markets tanked following reports of the new coronavirus strain in Britain and South Africa.

Indian markets extended losses in the late afternoon session Monday, tracking sell-off in the European markets amid concern of fresh travelling lockdown restrictions across EU countries. The benchmark BSE Sensex opened in the red Tuesday morning.