The CARES Act: The Basics



This is what we know so far about the $2.2 trillion relief bill that passed the Senate unanimously last night.


The following information was sourced from the Wall Street Journal and the New York Times.

House Majority Leader Steny Hoyer says the House plans to vote on the package via a voice vote on Friday. This gives members who wish to debate the bill in person the option to do so, while also enabling those unable to return to Washington during coronavirus an option to stay in their home districts.

The Big Picture

Key elements of the proposal are $250 billion set aside for direct payments to individuals and families, $350 billion in small business loans, $250 billion in unemployment insurance benefits and $500 billion in loans for distressed companies.

Individuals and Families

Under the plan, individuals who earn $75,000 in adjusted gross income or less would get direct payments of $1,200 each, with married couples earning up to $150,000 receiving $2,400 and an additional $500 per each child. The payment would scale down by income, phasing out entirely at $99,000 for singles and $198,000 for couples without children.

Eligible U.S. residents must have a work-eligible Social Security number to receive such a check and must not be claimed as a dependent by another taxpayer, according to Senate documents.

The checks will be available to those who have no income as well as people who rely on income benefit programs, such as supplemental security income from the Social Security Administration.

Use of retirement funds: The bill waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes, retroactive to Jan. 1.

The bill also greatly expands unemployment insurance to cover freelance and gig workers. The agreement is set to increase current unemployment assistance by $600 a week for four months.

Hospitals and Healthcare

The bill would provide $130 billion of funding to hard-hit hospitals.

The legislation will also create a new grant program to send $100 billion to health-care providers, already straining to respond to the rising number of infections across the country.

Expanded tele-health, higher Medicare reimbursement for doctors and hospitals, and a delay in certain Medicaid cuts to hospitals are part of the coronavirus package focused on health-care needs during the crisis.

The package would ensure states can get a 6.2% increase in matching federal funds for Medicaid and delay scheduled reductions to hospitals that care for a large share of uninsured or low-income patients. Payments hospitals get for treating patients infected with the virus would also be increased by 20%.

$150 billion is to go directly to state and local governments saddled with costs related to the virus.

An additional $16 billion will go toward building a stockpile of medical equipment, including personal protective gear that has become scarce.

State and Local Governments

$150 billion will go to state and local governments that are cash-strapped due to their response to the Coronavirus.

New York Governor Cuomo has said this amount is not enough for big states like New York and California.

Small Businesses

Loan money that small businesses use to cover payroll expenses, rent, interest on mortgage obligations and utilities will be forgiven. The legislation would also provide billions in debt relief on existing loans.


The deal would increase the amount the Agriculture Department can spend on its bailout program from $30 billion to $50 billion

Corporate Aid (because corporations are people too)

A major challenge in the negotiations was $500 billion in corporate aid, much of which will go toward backstopping Federal Reserve loans. The Treasury secretary will have the authority to directly lend a slice of those funds. The agreement will create a new inspector general and oversight board to monitor the aid. This add-on of a new inspector general and an oversight board is questionable at best but this was the compromise made between the Democrats and the Republicans.

The corporate aid portion also includes $17 billion for assistance to companies deemed to be crucial to national security, which could include firms such as Boeing Co. and General Electric Company.

Note that Boeing already receives state and Federal tax subsidies so this is just a big cash grab for them.

The legislation also would give grants of $25 billion for passenger air carriers, $4 billion for air-cargo carriers and $3 billion for contractors. The money is on top of loans and loan guarantees available through the Treasury.

2020 Election

With the assumption that the Coronavirus will not have passed through the US by November, $400M has been allocated for funding of at-home voter ballots. The Brennan Center has stated that $2 billion will be necessary to ensure that everyone has an opportunity to vote.

And finally…

Democrats secured a provision that bans businesses controlled by Mr. Trump, the vice president, members of Congress and heads of executive departments from receiving loans or other funds from the stimulus bill. Children and spouses of those people are also banned.

-Dora Taylor

One thought on “The CARES Act: The Basics

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s