The Senate passed a record $2 trillion stimulus package late Wednesday aimed at jumpstarting the U.S. economy, which has seen mass layoffs, business closures, imperiled industries and volatile financial markets since the beginning of March due to the rapid spread of the coronavirus.
Government leaders and health officials across the U.S. and in Pennsylvania have issued mandates ordering the suspension of non-life-sustaining business operations and social distancing guidelines to inhibit the spread of the coronavirus pandemic. This has caused many industries — travel, restaurants and hospitality among them — to see their incomes disappear almost overnight.
Lawmakers say the goal of the relief package is to provide financial solvency for U.S. households and businesses as social distancing practices help contain the spread of COVID-19 and the economy can rebound.
The “Coronavirus Aid, Relief, and Economic Security (CARE) Act” includes provisions that attempt to address economic hardships across industries while investing in medical research to support health systems treating a growing number of infected patients. Here’s what it includes:
- $1,200 in checks to Americans making $75,000 or less, $2,400 married couples earning up to $150,000 and an additional $500 per child in a family.
- $350 billion in loans for small businesses with less than 500 employees. Borrowers can receive loans equal to two-and-a-half times their monthly payroll, rent and debt payment expense, up to $10 million.
- A $500 billion lending fund for beleaguered industries, cities and states.
- $150 billion for state and local stimulus funds to be allocated proportionally based on population size.
- $130 billion for hospitals hit hard by the pandemic.
- Eligibility for unemployment benefits would be expanded to part time and contract workers. Employees would receive $600 per week for four months on top of what they receive from their state’s program.
The CARES Act was proposed last Wednesday by Senate Majority Leader Mitch McConnell, R-KY, who called the measure a “wartime level of investment in the nation,” in the hopes of a speedy passage through both houses of Congress and onto President Trump’s desk.
“For weeks now, the American people have been contending with the coronavirus pandemic that is spreading across our country and the massive disruptions to daily life it is creating,” McConnell, one of the bill’s sponsors, said Tuesday on the Senate floor, scolding Democratic colleagues for impeding the passage of the bill. “They’re grappling with small business closures, mass layoffs and uncertainty for their families.”
The CARES Act allows small businesses to keep their workforce in furlough status, that way they can compensate their employees while the business’ operations are suspended until the economy can recover when people are no longer bound by social distancing measures. This so-called “unemployment insurance on steroids,” as Democratic Leader Chuck Schumer coined it, provides four months of compensation to workers.
“This will allow companies to furlough employees so they can stay on as employees,” Schumer, D-NY, said Wednesday on the Senate floor. “We don’t want all workers to scatter to the wind. By keeping them on furlough, paying them, businesses can reassemble quickly.”
The record-setting aid package reflects compromises between the two parties, with Democrats countering what they saw as Republicans’ supply-side stimulus with protections for workers and checks on corporate control.
Senate Democrats and even some Republicans protested earlier versions of the bill as corporate giveaways that shorted relegated small businesses and laid off workers. Pennsylvania Senator Bob Casey called an earlier draft of the bill “a rigged, massive corporate giveaway that creates a half a trillion dollar slush fund for the Trump Administration to hand out money to its corporate allies without any accountability.”
Casey told reporters Wednesday afternoon the bill remains flawed, but it addresses the concerns of workers to a greater extent than the initial proposal from Republicans. He and fellow Democrats regret the bill doesn’t protect tenants from eviction, residents from foreclosure or former college students struggling to pay back loans.
Negotiations resulted in a bill that addressed many Democratic concerns when it comes to the federal government subsidizing private corporations — such as protecting collective bargaining rights, prohibiting stock buybacks and restrictions to CEO compensation.
With hospitality an imperiled industry earmarked in the legislation, Democratic revisions ensure that firms owned by President Trump or any member of Congress cannot receive loans backed by taxpayer money, with an inspector general and a Congressional oversight committee to be appointed to review lending decisions.
“These provisions would not be there if it were not for the Democrats,” Casey said. “Oversight isn’t just ensuring money is used efficiently and in compliance with the law. Oversight means dollars get to the people who will most benefit.”