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Sen. Pat Toomey (R-Pa.) yesterday blocked legislation that would prevent private debt collectors from being able to seize stimulus checks sent out under the latest coronavirus relief bill, The Hill reported. Sens. Ron Wyden (D-Ore.) and Sherrod Brown (D-Ohio) attempted to pass legislation to shield the payments from being garnished by private debt collectors. Though a previous $600 payment passed in December included the protection, the rules of reconciliation — the process Democrats used to avoid the 60-vote filibuster on the most recent bill — precluded similar language from being included into the $1.9 trillion bill. "Now Senator Brown and I wanted to include these protections in the American Rescue Plan. We wanted to include them just like was done in the December relief bill. But the problem was Senate rules don't allow Senator Brown and I to include these protections in the American Rescue Plan," Wyden said from the Senate floor. Toomey, however, objected. Under the Senate's rule any one senator can try to set up a vote or pass a bill, but any one senator can similarly object. Toomey argued that Democrats' decision to go it alone and use the process of reconciliation on coronavirus relief was the reason they couldn't get the language protecting the payments into the bill. Toomey also argued that the legislative fix supported by Wyden and Brown would prevent the money from going to individuals that a court has already determined should see the payment.

The federal government has distributed more than half of the $410 billion in stimulus payments to individuals approved in the pandemic-relief bill signed by President Joe Biden this month, in a cash injection set to boost the U.S. economy, Bloomberg News reported. The $242 billion disbursed so far have gone to approximately 90 million households, according to a statement from the Treasury Department on Wednesday. The first payments were mostly sent by direct deposit, which some started receiving this past weekend, the Treasury said. The $1,400-per-person payments, which most Americans qualified for, are arriving amid a widening reopening of businesses across the country as vaccinations rise and coronavirus infections slow. The Treasury said that payments appeared for some people starting last Friday, but with the official payment date set at March 17, the funds might not have been accessible up to that day. The average payment so far is $2,689, the Treasury data indicate. Individuals earning up to $75,000 or couples making less than $150,000 qualify for $1,400 payments for themselves and each adult or child dependent. The payments phase out as income rises, with singles making $80,000 or couples earning $160,000 not qualifying for any aid.

Twenty-one Republican attorneys general pressed the Biden administration yesterday to clarify a provision in the $1.9 trillion economic aid package that the president signed into law last week, warning that its restrictions on state efforts to cut taxes could be “the greatest attempted invasion of state sovereignty by Congress in the history of our Republic,” the New York Times reported. The seven-page letter was signed by a host of Republican officials, including the attorneys general of Texas, Arizona, Georgia and Utah. They take issue with a restriction that lawmakers included in a $350 billion relief effort for state, local and tribal governments that prevents them from using the federal funds “to either directly or indirectly offset a reduction in the net tax revenue” as a result of tax cuts. These governments have suffered revenue hits and laid off more than a million public employees during the coronavirus pandemic. The law requires repayment to the federal government of any money that violates those conditions. In their letter, the Republican officials asked Janet L. Yellen, the Treasury secretary, to clarify how expansively her department would interpret that portion of the law. Does it simply prohibit states from using the federal dollars to offset new tax cuts, or instead prohibit them from cutting taxes for any reason, even if those cuts were in the works before the law passed? The officials said the broader restriction would be damaging and most likely unconstitutional.

Enhanced unemployment benefits included in the $1.9 trillion pandemic-relief package signed yesterday by President Biden could keep billions of dollars a week in stimulus flowing into the economy through the summer, the Wall Street Journal reported. The plan extends two pandemic-related programs and lengthens supplemental $300 payments to all laid-off workers receiving unemployment benefits through early September — well after the effect of $1,400 checks to individuals likely fades. About 20 million people tapped unemployment benefits in mid-February, up from 2 million a year earlier, adding up to more than $10 billion in additional stimulus a week. Some economists say extending extra jobless benefits for nearly 18 months is a disincentive for some people to return to work, preventing industries such as logistics, construction and certain retailers from finding employees as the economy recovers. Other economists say the payments have provided a boost to many lower-income families, who have disproportionately lost jobs in the coronavirus pandemic, while in turn pushing money back into the broader economy. The U.S. had 9.5 million fewer jobs in February than a year earlier, according to the Labor Department. Read more. (Subscription required.) 

In related news, White House press secretary Jen Psaki said that direct deposits from the $1.9 trillion COVID-19 relief legislation signed into law by President Joe Biden on Thursday will come as early as this weekend, Reuters reported. With the signing of the stimulus bill, Biden commemorated the one-year anniversary of a U.S. lockdown over the coronavirus pandemic with a measure designed to bring relief to Americans and boost the economy. “People can expect to start seeing direct deposits hit their bank accounts as early as this weekend. This is, of course, just the first wave,” Psaki said. Payments to eligible Americans will continue throughout the course of the next several weeks, she added. Nearly 160 million households are expected to get payments, according to White House estimates. The bill includes an expanded child tax credit of up to $3,000 per child, or $3,600 for each child under age 6. The Internal Revenue Service will pay part of that in monthly installments of $250 or $300 from July through December, adding a benefits distributor role to the revenue collection agency’s responsibilities. Read more.

Additionally, the pandemic relief bill that President Biden signed yesterday afternoon will protect tens of thousands of aviation jobs, providing a lifeline to an industry that is likely to struggle for some time even as vaccinations accelerate, the New York Times reported. After Congress this week approved the legislation, which includes $14 billion for airlines and an additional $9 billion for airports and other businesses, American Airlines and United Airlines told 27,000 employees that they could ignore the furlough notices they had received in recent weeks. The airlines had issued the warnings, which are legally required in advance of sweeping cuts, as they prepared to carry out the furloughs at the end of this month when an earlier round of federal aid expired. The new bill extends that assistance through September. The relief package is the third to provide funding to keep airline workers employed since the pandemic began. Last March, Congress provided passenger airlines $25 billion in loans and another $25 billion in payroll grants. It renewed the payroll funding in December with a further $15 billion and again this week. The Biden relief bill also sets aside $1 billion for aviation contractors and $8 billion for airports to help them operate normally, limit the spread of the virus, and pay workers and service their debts. In exchange for the aid, airports, contractors and airlines are prohibited from large layoffs through September and were forced to make other concessions. Read more.

The House of Representatives yesterday approved President Biden's sweeping $1.9 trillion COVID-19 relief package in a starkly partisan 220-211 vote, The Hill reported. No Republican lawmakers backed the legislation, which will become law as much of the nation marks one year of lockdowns from the COVID-19 era. Just one Democrat, Rep. Jared Golden (Maine), opposed the measure. Biden has said that he will sign the measure as soon as it reaches his desk, with the White House saying he's expected to sign it on Friday. The president is set to address the nation tomorrow evening on the coronavirus pandemic. Senate centrists pushed a number of key changes to the House-passed bill to the frustration of progressives, including keeping the weekly unemployment insurance supplemental payments at the current $300 instead of increasing them to $400 as under the initial House bill. Unemployment insurance payments will run through Sept. 6, and up to $10,200 of the benefits will be exempt from taxes.

Small-business advocates are calling on the federal government to extend the March 31 deadline to apply for a loan from the Paycheck Protection Program, citing recent changes made to the program and delays in processing applications, the Wall Street Journal reported. “Time is not on our side. These businesses need a little more help, and they’re willing to do the work,” Hilda Kennedy, president of the PPP lender AmPac Business Capital, said yesterday during a House Small Business Committee hearing focused on the future of the program. Kennedy was speaking of the very smallest firms, such as those owned by sole proprietors. “We need more time to serve them,” she added. As of March 7, the Small Business Administration had approved 2.4 million loans totaling roughly $165 billion, or nearly 60% of available funds, for loans to first-time and returning borrowers under the reopened program, according to agency data. Lenders issue the loans, and the SBA guarantees them. Advocates say a deadline extension would give lenders more time to implement the administration’s recently announced changes and inform small businesses about how the revisions could benefit them. Read more. (Subscription required.) 

Click here for the replay, witness list and prepared testimony for the House Small Business Committee's hearing from yesterday titled "The Next Steps for the Paycheck Protection Program." 

The House Financial Services Subcommittee on Consumer Protection and Financial Institutions will hold a virtual hearing today at 10 a.m. EDT titled "Slipping Through the Cracks: Policy Options to Help America’s Consumer During the Pandemic." To obtain a link to the live webcast of the hearing, view the legislation to be examined and view the witness list, please click here.