House passes $2 trillion coronavirus stimulus bill, which includes direct payments to Americans and business loans

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Speaker of the House Nancy Pelosi

• The House passed the Coronavirus Aid, Relief, and Economic Security, or CARES, Act on Friday, sending the bill to the White House for President Donald Trump to unleash $2 trillion in stimulus for the coronavirus-hammered economy.
• The legislation passed just before 1:30 p.m. ET after more than three hours of debate.
• It includes direct payments of $1,200 for millions of Americans, emergency loans for businesses, hospital aid, and unemployment benefit expansions.
• The passage follows back-to-back blockages from Senate Democrats earlier in the week and days of negotiation before a deal was reached Wednesday morning. The Senate passed the bill unanimously late Wednesday night.
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The House of Representatives passed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, on Friday, moving the $2 trillion stimulus measure to the White House for President Donald Trump to sign.

The legislation passed just before 1:30 p.m. ET after more than three hours of debate. Relief set out in the measure includes direct payments of $1,200 to millions of Americans, strengthened unemployment benefits, and hundreds of billions of dollars in loans for struggling businesses.

About one quarter of the bill's sum is set aside for larger companies. Firms borrowing from the pool would be barred from paying dividends to shareholders or issuing stock buybacks until one year after they pay back their loans. The companies would also be forced to limit executive compensation.

The bill allocates $50 billion specifically for passenger air carriers. The industry was one of the first to face the coronavirus's economic toll as containment measures slowed domestic travel and limited international flights. Carriers have since called for aid from the federal government to avoid near-term defaults.

Small businesses - those with 500 employees or fewer - would receive $367 billion in emergency funding. Firms would be encouraged to maintain payroll, and operating costs may be forgiven if participating companies meet specific requirements.

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Roughly $100 billion is allocated to hospitals and healthcare facilities to better address the spreading coronavirus pandemic. Billions more would be set aside for testing supplies, equipment, and additional payroll.

The legislation also expands jobless benefits, offering an additional $600 a week to payments for four months. The aid would arrive as jobless claims spike to record levels. Claims for the week ended March 21 reached nearly 3.3 million, the Labor Department announced Thursday, trouncing the consensus estimate of 1.5 million.

The CARE Act was stuck in limbo at the start of the week as Senate Democrats demanded stronger worker protections and greater transparency around how corporations would receive loans. The chamber passed the bill unanimously late Wednesday night after days of negotiation between the White House and Senate leadership.

The Senate vote fueled US stocks' first back-to-back rally since mid-February as investors hoped for the stimulus package to cushion the economy amid a sudden shutdown. A three-day surge pushed the Dow Jones Industrial Average out of bearish territory by Thursday's close.

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While the legislation has slowly made its way to the White House, the Federal Reserve has worked to keep financial markets stable. The central bank slashed its interest rate close to zero on March 15 and initiated several trillion dollars worth of capital injections through its New York branch.

The Fed made its biggest policy move yet on Monday, lifting the limit for asset purchases to "support smooth market functioning and effective transmission of monetary policy," according to a statement. Three credit facilities will grant additional monetary relief to businesses, consumers and employers, the bank added. The Fed's balance sheet has since exceeded $5 trillion for the first time in history.

An additional Main Street Business Lending Program will be announced in the near future, according to the Monday announcement.

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Get the latest coronavirus analysis and research from Business Insider Intelligence on how COVID-19 is impacting businesses.

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