As of May 6, more than 259,000 people worldwide have died as a result of the novel coronavirus COVID-19. Many others are unable to earn a living wage as a result of strict social distancing guidelines and government-imposed lockdowns. The United States economy has particularly suffered, with more than 30 million Americans filing for unemployment in the period between March 15 and May 4. Similarly, the Bloomberg Consumer Comfort Index recently declined to 39.5 after reaching 67.3 during the last week of January, its steepest decline in more than 30 years.
To prop up the economy and support laid-off workers and others struggling to earn income, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27 after it was unanimously approved 96-0 by members of the US Senate. The following is a closer look at the largest stimulus bill is US history and how it affects individuals and businesses:
Stimulus Checks
Legal residents of the US who aren't eligible to be claimed as a dependent qualified to receive a one-time, $1,200 payment as part of the CARES Act. Similarly, married couples filing jointly could receive $2,400 in addition to $500 per qualifying child 16 years and under. However, individuals with an adjusted gross income of more than $75,000 and married couples with a combined adjusted gross income of more than $150,000 were deemed ineligible for the checks.
Unemployment and Sick Leave
In addition to the one-time payment, the CARES Act significantly expanded unemployment benefits to provide extended support to the millions of Americans whose jobs have been affected by COVID-19. Individuals filing for unemployment insurance (UI) can earn up to an additional $600 per week for as many as four months, which is in addition to state-sponsored benefits. Moreover, state UI eligibility was extended from 26 to 39 weeks. Gig economy workers and self-employed professionals can also qualify for UI, as can others who haven't been laid off but were forced out of work due to COVID-19-related reasons. This includes individuals diagnosed with COVID-19 or those awaiting a diagnosis as well as people whose head of household died from the virus.
Parents and those who need to stay home for reasons related to care-taking or illness will also benefit from the CARES Act. Those who are employed by companies with fewer than 500 employees can take up to three months of family leave, although the first two weeks are unpaid, whereas all full- and part-time employees receive 80 hours of paid sick leave, capped at $511 per day. People staying home to care for children or family members suspected of having COVID-19 also qualify for paid sick leave.
Big and Small Businesses
Individuals represent the largest benefactors of the $2 trillion CARES Act, with a total of $603.7 billion designated for one-time cash payments, unemployment benefits, and student loan assistance. Beyond that, large corporations will see $500 billion in economic support. Among all sectors, the aviation industry will benefit the most, with $58 billion earmarked for airline contractors as well as cargo and commercial airlines. An inspector general and special committee will oversee the recovery process, and all businesses receiving stimulus money will be ineligible to participate in stock buybacks for a full year following the term of the loan.
The Small Business Administration (SBA), meanwhile, was given $350 billion to support qualifying businesses needing to pay rent and employees. The maximum loan for businesses was set at $10 million.
Public Services
A total of $179.5 billion, or 9 percent of the total funds allocated through the CARES Act, was designated for public and health services. Healthcare providers will receive $100 billion in grants to make up for lost revenue due to prioritizing COVID-19 care over elective surgeries. Other benefactors include veterans' health care ($20 billion), Supplemental Nutrition Assistance Program ($15.5 billion), CDC programs ($4.3 billion), and food banks ($0.45 billion). In addition, $16 billion was set aside to increase the Strategic National Stockpile's supply of masks and ventilators.
Earlier Phases
The CARES Act was the third phase of a comprehensive stimulus package that was first signed into law on March 6. The original package included only $8.3 billion set aside for the CDC, FDA, SBA, and other government agencies as well as $4 billion to increase the availability of coronavirus tests. The second phase provided $100 billion in economic relief and included an increase in UI benefits in addition to two weeks of paid family and sick leave for workers. The third phase increased relief to $2 trillion and included support to affected industries such as hospitality and transportation.
While negotiations were underway for a fourth phase as of early May, White House economic adviser Kevin Hassett believed that additional coronavirus relief legislation may not be required: "I think right now, because there's been good news really, that the opening up is starting to happen faster than we expected, appears to be doing so safely, then there is a chance that we won't really need a phase four," he said during an interview on Fox News. He later told reporters that, if there is a fourth phase, it will be focused on economic growth as opposed to “building a bridge toward a recovery.”