Republicans and Democrats finally stopped squabbling long enough to spend an estimated $2 trillion on what they claim is emergency coronavirus relief. Here’s the good, the bad, and the ugly of the bill.

The Good

1. Payroll Tax Deferral

Employer-side payroll tax payments are suspended through the end of the year, to be paid half by year-end 2021 and half by year-end 2022. This will increase business liquidity by about $700 billion.

While I would have preferred a cut to a deferral, this will significantly lessen the near-term tax burden on business payrolls, encouraging businesses to retain and restore jobs. (Treasury has already announced a deferral of corporate income taxes under existing authorities.)

2. More Federal Reserve Money

The Federal Reserve’s new lending facility is funded with up to $425 billion, which will be levered to provide up to $4 trillion in liquidity to distressed businesses.

3. Net Operating Losses

Five-year carryback for tax years 2018, 2019, and 2020, for corporations and pass-through businesses as well. This will allow this year large expected losses to be carried back for substantial refunds.

4. Qualified Investment Property Fix

Fixes the so-called “retail glitch” for qualified investment property (QIP), allowing investments in QIP improvement to commercial buildings—flooring, lighting, fixtures, etc.—to qualify for bonus depreciation. The glitch forced a 39-year recovery for such investments, and fixing it has been a top priority of restaurants and retailers.

5. Exemption for Distillers to Produce Hand Sanitizer

Distillers were made exempt from alcohol excise taxes for the alcohol used to produce hand sanitizer.

6. Sick Pay Tax Credits Made Advanceable

This solves the biggest flaw in last week’s Nancy Pelosi-Steven Mnuchin bill, which mandates paid sick leave and required businesses to pay the costs up front and be reimbursed months later, even though they are already in a severe cash crunch.

The Bad

1. Four Months of Full-Pay Unemployment Above Earnings

Four months of an additional $600 per week on top of standard state unemployment benefits. This repeats and worsens the principal policy error of the Obama recession: enhanced unemployment benefits that undercut work incentives, contract the active labor force, and undermine economic growth.

Four months exceeds any reasonable expectation of how long shutdown orders will be in place, and paying more for non-work than for work will discourage a significant portion of the workforce from returning to work before the extra benefits end.

2. Unrelated Spending Larded Into the Bill

Corporation for Public Broadcasting: $75 million

National Endowment for the Arts: $75 million

National Endowment for the Humanities: $75 million

Institute of Museum and Library Services: $50 million

The Kennedy Center: $25 million

National Oceanic and Atmospheric Administration (NOAA): $20 million

Legal Services Corporation: $50 million

Internal Revenue Service: $250 million

House of Representatives salaries and expenses: $25 million

3. Mandatory Neutrality in Union Organizing Drives

This is a huge giveaway to union bosses by the backdoor. Medium-sized businesses (500-10,000 employees) cannot oppose any union organizing campaign for the duration of a federal loan.

4. Even Bigger Student Loan Subsidies

Employer-paid student loan payments are made tax-exempt, creating a tax preference for student loan payments over ordinary income. This is a down payment on a Democratic political agenda item, rewarding principally upper-middle-class professionals who chose to take on the long-term obligation of student loans.

5. No Funds for Topping Up Petroleum Reserve

Senate Minority Leader Chuck Schumer stripped out the funding for Strategic Petroleum Reserve purchases. Hard to see why we wouldn’t want to top it up at 20 bucks a barrel. Probably just to spite the president.

The Ugly

The economy remains substantially shut down, and no matter how much stimulus money is pushed out, it is impossible to buy products and services that nobody is producing. The severity of the present policy-induced contraction will depend on how rapidly a significant portion of the workforce can return to work.

This article has been updated due to the fast-changing nature of the bill in question.