Committee for a Responsible Federal Budget

What's in the $3 Trillion HEROES Act?

May 27, 2020 | Other Spending

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