COVID 19 Stimulus and Relief

When the CARES Act passed in April, it was an historic step by our government to mitigate the effect of the COVID pandemic on our people and economy. The $2.2 billion provided by the act supported enhanced unemployment benefits, stimulus payments to individuals and families, the Payroll Protection Plan to allow businesses to keep employees on the payroll, funds for state and local governments to cover COVID-related costs and support for students and renters to suspend student loan repayments and many kinds of evictions.

While the CARES Act was successful in many ways, most of the benefits have either expired or are about to expire even though unemployment continues at very high levels, business bankruptcies are growing, economic activity remains depressed, state and local governments are suffering from increased costs and decreased revenue and the threat of further bankruptcies and more economic and health damage continues.

FILE – In this May 21, 2020 file photo, a man looks at signs of a closed store due to COVID-19 in Niles, Ill. U.S. businesses shed 2.76 million jobs in May, as the economic damage from the historically unrivaled coronavirus outbreak stretched into a third month. The payroll company ADP reported Wednesday that businesses have let go of a combined 22.6 million jobs since March.AP Photo/Nam Y. Huh, File)

In light of this, the House of Representatives passed legislation two months ago to provide additional stimulus and relief totaling almost $4 billion for individuals, families, businesses, healthcare providers, state and local governments and others. the Republican-led Senate, however, has been unable to pass any corresponding legislation and the Senate leadership and the White House oppose most of the initiatives included in the House bill. This is creating a severe hardship for many Americans which can only get worse with further layoffs and business closings in the future and evictions and homelessness in the future for many of those whose unemployment benefits have been cut or the newly unemployed.

So I was heartened to see that a bipartisan group of representatives called ‘The Problem Solvers Caucus’ had proposed a framework for a COVID 19 relief package that might help move things along. I’m cautious because this group hasn’t really had much of an impact until now but perhaps this will go somewhere.

The package being proposed represents, of course, a compromise between the administration position and the legislation passed by the House. In my view it’s far from perfect but better than nothing. Here are the basic elements:

  • $100 billion for testing and healthcare, primarily for providers
  • $316 billion in support for families and individuals including increases in WIC/SNAP, direct stimulus payments as in the CARES Act, Rental assistance for the most needy and Student Loan forbearance through December.
  • $120 billion for unemployment assistance including $450 weekly supplement for 8 weeks followed by up to $600 but not to exceed previous salary for 13 weeks.
  • $290 billion for small businesses and nonprofits including a second PPP program with a focus on small and community banks and $50 billion for employee retention tax credits
  • $145 billion for schools and childcare including $15 billion for childcare providers, $100 billion for K-12 schools and $30 billion for higher education
  • $500.3 billion for state and local governments, most of it to make up for general revenue shortfalls.

I think in some of these categories there is not enough money but, as I said before – it’s better than nothing and nothing is what we will get if the current gridlock continues. I will keep my fingers crossed.

Posted by Tom