by Sean Slone, CSG senior policy analyst
The $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act approved by Congress and signed by the President last week is the largest and most far-reaching effort yet to get needed resources to states and to try to blunt the economic impact of the response to the pandemic for millions of individuals and businesses around the country. But even with the ink still drying on the bill, talk in Washington is already turning to the next round of relief, stimulus and recovery spending that may be needed.
What is in the CARES Act?
The package includes direct payments and jobless benefits for individuals, money for states and a fund for businesses battered by the crisis. Here are some of the topline numbers:
- $150 billion for a Coronavirus Relief Fund, which state, tribal and local governments can use to meet costs connected to the virus. Each state will receive at least $1.25 billion, based primarily on population, with California receiving the most at $15.3 billion.
- $30 billion in emergency education funding for colleges and universities, states and school districts. This amount includes $13.5 billion dedicated funding to shore up K-12 education budgets as part of the bill’s Education Stabilization Fund, $14.25 billion for higher education and $3 billion for a discretionary fund for governors to use to assist both K-12 and higher education as they deal with the impact of COVID-19.
- $30 billion added to the Federal Emergency Management Agency’s Disaster Relief Fund to help meet the immediate needs of state, local, tribal and territorial governments to protect citizens and to help them respond and recover from the effects of COVID-19. The bill also includes $1.5 billion for deployments of the National Guard.
- $290 billion for direct, one-time payments to individuals and families. Millions of Americans, including those earning up to $75,000 annually, will receive direct payments of $1,200 in the coming weeks. Married couples earning up to $150,000 will receive $2,400 and an additional $500 per child. The payments scale down by income and phase out entirely at $99,000 for individuals and $198,000 for couples without children.
- $250 billion in unemployment insurance benefits. Recipients would receive an additional 13 weeks in insurance and an additional $600 a week for four-months on top of what state unemployment programs pay them. For the first time, the payments will also be extended to freelancers and gig workers.
- $377 billion in federally guaranteed loans to small businesses. The loans will be available to small businesses that pledge not to lay off their workers during an emergency period ending June 30. If the employer continues to pay workers for the duration of the crisis, the loan would be forgiven.
- $500 billion for a government lending program for distressed companies and industries. Passenger air carriers will receive $25 billion in grants, cargo air carriers $4 billion and companies deemed important to national security get $17 billion. Airlines have to agree to not furlough employees through September to be eligible for the grants. The bill includes $10 billion for airport improvements as well.
- Public transit agencies also hit hard by reduced travel during the crisis will receive $25 billion, while Amtrak will get $1 billion.
- $100 billion to hospitals on the front lines of the pandemic.
In addition, the package includes an extensive list of other programs and funds to address a variety of issues related to the crisis. Among them:
- $48.9 billion to help the U.S. Department of Agriculture respond to the virus, including $14 billion to boost funding authority for the USDA’s Commodity Credit Corp., which provides direct aid to producers, and $9.5 billion to address the economic effects of the pandemic on livestock and dairy farmers and crop producers who have faced market volatility and shuttered restaurants and farmers markets during the crisis.
- $400 million to help states shore up elections during the pandemic, promote mail-in voting, expand early voting and online registration and increase the safety of voting in-person by providing additional polling facilities and workers. The amount is more than the $140 million a previous version of the bill but far short of the $4 billion requested by House Democrats.
- $100 million to continue a pilot project to boost rural broadband.
- $25 million for rural development programs including distance learning and telemedicine. There is also $200 million in new FCC funding to help expand telehealth efforts.
Reaction from States
Governors from two of the states hardest hit by the pandemic had somewhat different perspectives on how much the CARES Act can help.
New York Gov. Andrew Cuomo told reporters the congressional action “simply failed to address the governmental need.” In New York’s case, one of the state’s primary needs is for 30,000 ventilators, Cuomo said.
California Gov. Gavin Newsom on the other hand called the bill “critical support” and praised its “direct aid to state and local governments so that we can respond to this emergency and aid communities and families during this time.”
But Newsom also recognized the bill may just be a good first step.
“States and local governments are on the front lines of fighting this pandemic — scaling up the capacity of our health system, supporting first responders, providing food aid, and supporting workers as they seek to make ends meet amid massive job losses,” Newsom said, according to press reports. “State and local governments will need additional and flexible funding to ensure they can continue responding to this crisis and continue critical services. California businesses and residents will also need additional federal support to weather this economic storm.”
What’s Next?
Over the weekend, it was reported that Trump administration officials, members of Congress from both parties, think tanks and lobbyists have already begun to sketch out what a fourth emergency-spending package might look like. Among the items reportedly under consideration for the next iteration: green energy tax credits for wind and solar industries, funds to allow the U.S. Department of Energy to buy oil to store in the Strategic Petroleum Reserve, and an infrastructure package perhaps paid for with a gas tax increase, since gas prices are currently seeing record lows.
Some House Democrats are also calling for the inclusion of environmental justice measures as part of virus response efforts. These could include investments in drinking water services, energy efficiency and weatherization programs, pollution reduction and workforce development.
Others would like to see expanded eligibility for family and medical leave in the next bill.
Analysts also note that state and local governments will likely need additional funding not only as they seek to meet the challenges presented by the pandemic but as they face declining tax revenues, obsolete state budgets, increasing unemployment claims and the need for additional Medicaid matching funds in the months ahead.
It could be awhile before a fourth bill comes to fruition, however. The U.S. Senate has adjourned until April 20.