Sunday afternoon, the House of Representatives passed The CARES Act (H.R. 748) following an earlier vote last week by the Senate. The bill is intended to provide the country with $2.3 trillion of aid to counter the physical and economic effects of the COVID-19 pandemic. This legislation is the third COVID-19 bill to be developed by Congress, following the
Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R. 6074) and the
Families First Coronavirus Response Act (H.R. 6201).
Below is a high-level summary of the financial support, including key-items highlighted for businesses:
Support for State and Local Government
- Coronavirus Relief Fund - $150 billion
- SNAP, Family Services, and Housing - $42 billion
- FEMA Disaster Assistance ~$45 billion
Support for Transportation
- Transportation (Aviation [excluding loans & loan guarantees]) - $42 billion
- Transportation (Ground) - $26 billion
Support for Individuals
- Unemployment Benefits - $260 billion
- Stimulus Checks - $290 billion
- Tax Reductions for Individuals - $20 billion
Support for Education
Support for Health Systems
- Health-Related Spending - $180 billion
Support for Business
- Small Business Loans & Grants - $377 billion
- Large Business Loans & Loan Guarantees - $510 billion
- Business Tax Reductions - $280 billion
Miscellaneous
- Miscellaneous Spending - $25 billion
Key Highlights for Business:
FEMA Disaster Relief Funding ($45 Billion) $45 billion is being provided in funding for FEMA with $25 billion going to areas with major disaster declarations. The remaining $15 billion will be used for all purposes allowed under the Stafford Act.
EDA Funding ($1.5 Billion) The bill allocates $1.5 billion to the Economic Development Administration through September 30, 2022. This will help regions mitigate the local economic crisis and rebuild impacted industries such as tourism or manufacturing supply chains.
USDA-Rural Development Programs ($145.5 million) The stimulus package provides an additional $20.5 million for the Rural Business Program under the Rural Business Cooperative Service to support loans for rural business development programs. It allocates $25 million for the Distance Learning and Telemedicine Program which helps provide broadband services to rural communities to support vital distance learning and telemedicine. The bill also provides $100 million in grants to the ReConnect pilot program to provide broadband services to rural areas to meet the Federal Communications Commission speed standards of 10 Mbps downstream and 1 Mbps upstream.
Dislocated Workers National Reserve ($345 million) The bill provides $345 million for dislocated workers (through September 30, 2022) to prepare for and respond to layoffs resulting from the COVID-19 pandemic.
Project-Based and Tenant-Based Rental Assistance ($2.25 billion) The package provides $1 billion for project-based rental assistance to make up for reduced tenant payments as a result of coronavirus. $1.25 billion for tenant-based rental assistance will be provided to preserve Section 8 vouchers for seniors, the disabled, and low-income working families.
Unemployment Benefits ($260 Billion) The Senate bill would change unemployment insurance benefits in several dramatic ways. The bill would provide unemployed workers with their basic state unemployment benefits (about $300 per week) plus a federal supplement of $600 per week for up to four months. The bill would also extend state benefits for 13 weeks. This would result in up to 39 weeks of benefits for many workers. In addition, the bill would provide incentives for states to waive their waiting periods, and would make unemployment compensation available to part-time, self-employed, and gig workers as well.
Hospitals and Health Care ($180 Billion) $100 billion of funding in the bill is being put toward hospitals responding to COVID-19. Other funding will go to drug access; CDC, FDA, NIH, IHS, & other health-related agencies; care for veterans; and the replenishing of the nation’s stockpile of medical supplies.
Small Business Support ($377 Billion) Small business funding will be provided in three ways:
$10 billion of funding is being provided for Economic Injury Disaster Loans (EIDL) for grants up to $10,000 to cover immediate operating costs for businesses.
$350 billion is allocated for the Small Business Administration (SBA) to provide loans of up to $10 million per business. Use of that money is flexible as long as businesses keep their workers employed through the end of June. Lastly, $17 billion will be for the SBA to cover 6 months of payments for small businesses with existing SBA loans.
Large Business Support ($510 Billion) A large portion of the bill will be used to provide loans and loan guarantees for large companies, particularly for those industries hardest hit by COVID-19 such as airlines.
Tax Reductions for Businesses ($280 Billion) The bill would loosen caps imposed by the Tax Cuts & Jobs Act on interest deductibility & operating losses, provide payroll tax credits for businesses who retain workers at a loss, and delay employer payroll tax payments from 2020 to 2021 & 2022 $12. The bill would also introduce a very COVID-19-specific provision allowing liquor distillers to make hand sanitizer tax-free.
