Coronavirus Fiscal Stimulus Update - 25 March 2020
Administration officials and top Democrats finalized an agreement early Wednesday morning that would result in the largest economic stimulus measure in modern history. Dubbed "The CARES Act" the legislation is called the Coronavirus Aid Relief and Economic Security Act. It will become law and go into effect if it is passed by the Congress and signed by the President.
The $2 Trillion rescue fund would authorize direct payments to taxpayers and loans to small businesses, and create a $500 billion corporate bailout fund. Here are the 5 Key components of the stimulus package:
1. $1,200 in direct payments to taxpayers
This would only be offered to individuals with incomes up to $75,000 per year before starting to phase out and ending altogether for those earning more than $99,000. That’s $1,200 per person and $2,400 per couple. Families would receive an additional $500 per child.
2. Unemployment benefits will grow substantially
The bill extends unemployment benefits by 13 weeks and includes a four-month enhancement of these benefits. The program will also be broadened to those in the “gig” economy including freelancers, furloughed employees and even Uber drivers to name a few.
3. Small businesses will receive emergency loans if they keep their workers
The bill provides federally guaranteed loans available at community banks to small businesses that pledge not to lay off their workers. The loans would be available during an emergency period ending June 30, and would be forgiven if the employer continued to pay workers for the duration of the crisis.
4. Distressed companies can receive government bailouts
Although there are many conditions, loans for distressed companies would come from a $425 billion fund controlled by the Federal Reserve, and an additional $75 billion would be available for industry-specific loans — including airlines and hotels.
5. Help for hospitals and healthcare providers
The agreement includes $100 billion for hospitals and health systems across the nation that have been burdened by the COVID-19 pandemic. The Aid can be used, for example, to purchase personal protective equipment, testing supplied and new construction to house patients. It also includes an increase in Medicare payment to all hospitals and providers.
For informational purposes only. Not to be construed as financial advice. Provided as a synopsis from sources deemed reliable.