What's in the $2 trillion COVID-19 relief package?
Yesterday evening, the U.S. Senate voted to pass the CARES Act, a $2 trillion stimulus package that would be a third phase of the federal government’s response to the COVID-19 pandemic. The bill includes $500 billion in corporate liquidity from the Federal Reserve; $377 billion for small business loans and other assistance; $150 billion for hospitals, community health centers, and health care providers; and $150 billion for state and local governments and includes tax rebates, 13 weeks of expanded unemployment benefits, and business tax relief.
The $2 trillion relief package is the largest in American history, and has three main components:
Direct Payments: $1,200 to single Americans making less than $75,000; $2,400 to couples making up to $150,000 combined, plus $500 per child. The checks get smaller as incomes go up and cut off for singles making $99,000 and $198,000 for couples without children.
Unemployment Benefits: Key unemployment benefits for those filing have been expanded, including lengthening unemployment insurance by 13 weeks, plus up to $600 more in benefits to more accurately match missing wages. Altogether, those unemployed could earn 39 weeks of benefits. This also widens the pool of eligible filers, including freelancers, furloughed workers, and “gig workers.” You may recall, Governor Roy Cooper’s Executive Order 118 already loosened the restrictions on unemployment benefits in the state of North Carolina.
Business Financing: The stimulus package includes a framework for loans large and small to businesses of all sizes. The loans do include strings attached, such as keeping workers on payroll and covering benefits, plus limits of stock buybacks and bonuses. The very good news is the way the Federal Reserve structured the program means more private banks are able to help increase the capacity to process the loan requests. Banks like Live Oak Bank, Truist, First National Bank, and First Citizens Bank are already hard at work setting up the infrastructure necessary to help fund these loans.
As mentioned above, the CARES Act includes $150 billion for state and city government expenditures incurred due to the coronavirus public health emergency would be allocated by population proportions, with a minimum of $1.25 billion per state.
The stimulus package still needs to be passed by the House and signed by the President. The U.S. Chamber has organized a summary of the bill, which breaks down the final stimulus package and provides analysis for the business community. Links to the final bill text is included in the summary.
In North Carolina, House Speaker Tim Moore has formed a bipartisan House Select Committee on COVID-19 and divided it into four key working groups: Health Care, Economic Support, Education, and Continuity of State Operations.
North Carolina currently has a rainy-day fund of $2.2 billion dollars that could provide lawmakers with the funding engine needed to boost our state’s economy. There is an additional $3.9 billion in the Unemployment Trust Fund.
The North Carolina General Assembly is in recess until April 6th. Still, Governor Cooper has signaled that he intends to call a special session to address COVID-19 concerns in our state as soon as possible. The goal in the House and the State Senate seems to be to bring near finished legislative proposals to Raleigh to avoid as much time in the Legislature as possible to follow social distancing rules.
Locally, we continue to work with city, county, and statewide officials to review any “shelter in place” orders that may be under consideration in an effort to combat the spread of COVID-19.
The lack of uncertainty or consistency across our state in these orders could make it very difficult for some critical businesses to operate depending on the language that is used. If it is necessary to do so at all, our chamber is advocating for any Shelter in Place order to follow the Department of Homeland Security’s CISA guidelines.
At this point, the following cities and counties in North Carolina have issued “Shelter in Place” or “Stay at Home” orders, which are all different and include different industries as “essential business.”
· Mecklenburg County
· Wake County
· Orange County
· City of Durham
· Pitt County
· Town of Madison
· City of Winston-Salem
· City of Clemmons
· City of Beaufort
If you believe your business qualifies as an essential operator, start documenting how you are “essential” and what you are doing to protect your workforce while they are working. This includes identifying your customers and product applications, either directly or by supplying essential business with needed parts or services.