Current State of Play
The third COVID-19 Supplemental Appropriations bill, titled the ‘Coronavirus Aid, Relief, and Economic Security (CARES) Act’, was signed into law on Friday, March 27, 2020. The $2 trillion legislation provides significant immediate support to businesses, governments, and individuals impacted by COVID-19. While billed as a ‘stimulus’, the legislation is more geared towards keeping businesses and individuals economically afloat for the duration of aggressive social distancing required to keep the virus from overwhelming the U.S. health care system. A few of the key provisions include:
- A series of two $1,200 per person rebates. Rebates phase out above $75,000 AGI
- $500 billion in emergency cash-flow loans to businesses and local governments
- $350 billion in SBA loans to help businesses retain employees, the principal of which is forgiven if businesses retain their employees
- $600 increase in unemployment benefits and an extension of unemployment benefit duration
- $150 billion grant fund for local governments and Native American tribes
- $400 billion in additional federal funding for existing programs and accounts.
Congress is now in recess until at least April 20, 2020. It is expected that after this break, either in late April or early May, Congress will reconvene to pass a fourth supplemental bill and address and critical needs. Discussions are ongoing already on what will be included, though it remains to be seen if the U.S. will be able to meaningfully relax social distancing practices by then. President Trump originally indicated a desire to end social distancing in parts of the country by April 12th, and has since revised that estimate to April 30th. In the meantime, the different federal agencies are working rapidly to digest the CARES Act and issue guidance on how funding will be distributed and how businesses may apply for assistance. Many have between 7 and 10 days to issue initial guidance, and up to 30 days to distribute funding.
Next COVID-19 Package
Speaker Pelosi has expressed a desire to move quickly on the next phase of COVID-19 economic relief, focusing on infrastructure and other generally Democratic priorities. Senate Majority Leader McConnell has disagreed with this approach, arguing that it is too soon to discuss the next package, especially with the height of health impacts likely being experienced around April 20. Furthermore, he has indicated that the next package should be focused on fixing aspects of the third COVID-19 package, along with a few targeted measures. As such, it is expected that the next COVID-19 package will start out partisan, and likely won’t be finalized until well into May - unless unexpected emergency measures are necessary before them.