What's in the $3 Trillion HEROES Act?
Updated on 6/3/2020 to reflect CBO's estimate of the HEROES Act.
The House recently approved the HEROES Act designed to further address the public health and economic crisis brought on by the novel coronavirus (COVID-19) pandemic. At an estimated cost of $3.4 trillion, the HEROES Act is the largest COVID-19 relief package to pass either chamber of Congress so far. The table below breaks down the components of the HEROES Act.
This blog post is a product of the COVID Money Tracker, a new initiative of the Committee for a Responsible Federal Budget focused on identifying and tracking the disbursement of the trillions being poured into the economy to combat the crisis through legislative, administrative, and Federal Reserve actions.
The legislation would extend expanded unemployment insurance benefits through early next year, send most Americans another $1,200 per person, provide significant aid to states and localities, support small businesses and promote employee retention, provide individual income tax breaks, and boost spending for the health care, housing, and agriculture sectors.
The Congressional Budget Office (CBO) estimates the HEROES Act would cost $3.4 trillion through 2030, with the vast majority of the cost coming this year and next year.
| Policy | Ten-Year Cost/Savings (-) | |
|---|---|---|
| Provide Aid to State and Local Governments | $1.13 trillion | |
| Provide general aid to states, territories, and tribes | $540 billion | |
| Provide general aid to local governments | $375 billion | |
| Increase funding to states for K-12 and higher education | $90 billion | |
| Further increase Medicaid matching to states through June 2021 | $81 billion | |
| Provide funding for infrastructure and public transportation | $32 billion | |
| Increase Safety Net Spending | $485 billion | |
| Extend and expand unemployment benefits | $437 billion | |
| Increase SNAP benefits and funding | $35 billion | |
| Increase Social Services Block Grant funding | $10 billion | |
| Increase funding for low-income energy assistance, water assistance, and job training programs | $5 billion | |
| Increase aid to disabled veterans by 25% | $3 billion | |
| Provide Additional Rebates | $435 billion | |
| Provide additional $1,200 rebates per person to households (including $1,200 per dependent) | $413 billion | |
| Loosen certain rules for current and previous rebates | $23 billion | |
| Increase Health Care-Related Spending | $382 billion | |
| Reimburse health care providers for lost revenue and COVID-19 expenses | $100 billion | |
| Cover COBRA premiums for laid-off workers from March through January 2021 | $98 billion | |
| Eliminate cost-sharing for COVID-19 treatment and compensate private insurers for high-cost enrollees | $79 billion | |
| Increase funding for testing and contact tracing | $75 billion | |
| Eliminate cost-sharing for COVID-19 treatment in Medicare and expand generosity of advanced/accelerated payments | $11 billion | |
| Increase funding for health agencies and community health centers | $19 billion | |
| Support Small Businesses and Employee Retention | $290 billion | |
| Expand employee retention credit | $164 billion | |
| Provide credits for employer pandemic expenses and fixed costs for closed businesses | $73 billion | |
| Extend and expand paid leave credit | $32 billion | |
| Provide 90% of income credit for self-employed | $21 billion | |
| Reduce Individual Taxes | $290 billion | |
| Eliminate state and local tax deduction cap for 2020 and 2021 | $137 billion | |
| Increase child tax credit benefits and refundability for 2020 | $119 billion | |
| Expand Earned Income Tax Credit for 2020 | $24 billion | |
| Expand child care credit for 2020 | $6 billion | |
| Double teacher expense deduction and create deductions for first responders and frontline employees | $5 billion | |
| Other tax changes | <$1 billion | |
| Provide Student Loan Relief and Funding for Higher Education | $191 billion | |
| Forgive up to $10K in student loans for economically distressed borrowers (forgiveness excluded from income) | $22 billion | |
| Other higher education changes | $169 billion | |
| Increase Housing-Related Spending | $202 billion | |
| Establish emergency rental assistance fund | $100 billion | |
| Establish homeowner assistance fund | $75 billion | |
| Increase funding for homeless and housing assistance | $22 billion | |
| Increase Community Development Block Grant funding | $5 billion | |
| Establish Hazard Pay Fund for Essential Workers | $190 billion | |
| Provide $13/hour hazard pay for essential workers up to $10K per employee | $190 billion | |
| Increase Communications-Related Spending | $32 billion | |
| Provide additional funding for the postal service | $25 billion | |
| Increase funding for E-Rate program | $5 billion | |
| Other communications spending | $2 billion | |
| Provide Pension and Retirement Relief | $48 billion | |
| Provide relief for multiemployer pensions | $58 billion | |
| Increase amortization period for pension investment losses | -$17 billion | |
| Other retirement changes | $7 billion | |
| Increase Agriculture Spending | $31 billion | |
| Increase direct payments to agricultural producers | $17 billion | |
| Provide emergency assistance to livestock producers | $11 billion | |
| Provide relief for dairy industry | $2 billion | |
| Establish soil conservation pilot program | $1 billion | |
| Limit Business Loss Deductibility | -$254 billlion | |
| Reinstate and extend after 2025 $250K pass-through loss limit | -$246 billion | |
| Limit net operating loss carryback to 2018 or later | -$8 billion | |
| Total | $3.4 trillion | |
Sources: Congressional Budget Office, Joint Committee on Taxation
CBO's estimate is roughly $200-$400 billion higher than CRFB's prior estimate due to higher unemployment benefit costs and the inclusion of $90 billion of health care policies we did not estimate, among other things. We show the main reasons for the difference between CBO's estimate and ours below.
| Policy | Low-Cost Estimate | High-Cost Estimate |
|---|---|---|
| CRFB Estimate | $3 trillion | $3.2 trillion |
| Higher Medicaid Matching Cost | $21 billion | $1 billion |
| Higher Unemployment Benefit Cost | $187 billion | $37 billion |
| Higher Health Spending (Previously Scored as "Unknown") | $90 billion | $90 billion |
| Lower Education Spending | -$59 billion | -$59 billion |
| Other Differences | $172 billion | $153 billion |
| CBO Estimate | $3.4 trillion | $3.4 trillion |
