In the last seven weeks, Congress has passed, and President Donald Trump has signed into law four separate pieces of legislation to counter the impact of the COVID-19 pandemic. The first (HR-6074, 3/06/20) sent $8.3 billion to the FDA and CDC. The second (HR-6201, 3/18/20) provided $3.5 billion to expand paid sick leave and increased federal funding for Medicaid. The third (HR-7 48, 3/27 /20) was the major legislative effort, the $2.3 trillion CARES Act that included money for families, states, hospitals, businesses (big and small) and a boost to unemployment benefits. The fourth bill, signed into law last Friday (4/24/20), allocated $484 billion to the areas identified in the CARES Act that needed more funds – small businesses, hospitals and testing kits (source: Congress).
These four bills, completed in less than two months, have identified $2.8 trillion of outlays, a total that may continue to grow in the coming weeks as more bills are introduced. Total spending by the U.S. government for fiscal year 2019, i.e., the 12 months ending 9/30/19, was $4.4 trillion (with no pandemic), resulting in a $984 billion deficit. The COVID-19 pandemic will push the United States to a record budget deficit for a single fiscal year, eclipsing 2009’s red ink of $1.41 trillion (source: Office of Management and Budget).
Social Security trustees announced last week that the trust fund backing the payment of Social Security retirement benefits would be zero in 2034. A zero “trust fund” does not mean the payment of Social Security benefits would also go to zero, but rather would drop to 7 6% of their originally promised levels through the year 209 5. When the trustees released this same report in 2010 (i.e., 10 years ago), the Social Security Trust Fund was projected to be depleted in 2040 (source: Social Security Trustees 2020 Report).
Notable Numbers for the Week:
- ONE MONTH – As of 9am ET on Tuesday 3/24/20, the United States reported 44,795 cases of COVID-19 patients and 550 deaths. As of 9am ET on Friday 4/24/20, the United States reported 878,248 cases of COVID-19 patients and 49,948 deaths (source: NBC News reports)
- JUST SITTING SOMEWHERE – 64% of the commercial aircrafts operated by airlines worldwide have been removed from daily usage and are currently in storage (source: https://upgradedpoints.com/coronavirusimpact.).
- STAY HOME – Wuhan, China, ground zero of the COVID-19 pandemic, was placed on a 76-day quarantine that ran from 1 /23/20 to 4/08/20. Wuhan has a population of 11 million, more than NY City (source: Financial Times)
- THEY PAY TAXES- The 10% of California’s workforce who are immigrants living in the state illegally paid an estimated $2.5 billion in state and local taxes in 2019 (source: https://time.com/5821770/california-cashimmigrants
Mark R. Reimet CFP
CERTIFIED FINANCIAL PLANNERJodie Booth