The Historic $2 Trillion COVID-19 Emergency Bill: Analysis
- The Youth Activist Club
- Apr 1, 2020
- 4 min read
By Yash Permalla
The $2 trillion Coronavirus relief package, executed through the CARES Act, recently passed in the Senate 96-0, and has been all over the news recently. After all, it’s a substantial sum, equivalent to a little over half of our entire federal budget. What exactly does this package entail, and how effective is it for providing emergency relief to Americans across the country?
The package addressed a few key areas: aid to small businesses, individual citizens, public funding to state and local governments, healthcare initiatives, and of course, aid to corporations.
Small businesses:
Loan allocation and loan forgiveness constitute a large portion of relief to small businesses. The Small Business Administration has been allocated 350 billion dollars to provide loans to small businesses, and the loans are forgiven if they are used for worker salaries or covering mortgage debt. Additionally, if businesses are already receiving loans from the Small Business Administration, payments for the next few months will be covered by an additional allocated 17 billion dollars in this package. For context, the average small business loan granted by the SBA in 2018 was 107,000 dollars, accounting for loans from both national and smaller banks that were granted through the SBA. There are over 30 million small businesses in the country.
Grants are also being provided to businesses, up to 10,000 dollars per business, with the total grant pool consisting of 10 billion dollars. Overall, small businesses are receiving support via means to cover debts and payments for property and logistics, especially for those that have no reliable source of income at the moment.
In my opinion, much more support could be given that is being spent in other sectors, as will be addressed later down, but for immediate relief, this does the job.
Healthcare initiatives and local government:
About 150 billion dollars has been allocated for healthcare initiatives. This encompasses funding for hospitals, expanding healthcare coverage, and funding research.
100 billion dollars have been allocated for hospitals with the intention of covering supplies such as face masks, IV bags, and other essentials that hospitals are currently running low on.
16 billion dollars have been allocated to the Strategic National Stockpile to produce more ventilators, masks, etc.
20 billion dollars have been allocated for healthcare for veterans, as well as funding senior and community centers around the country.
The CDC has also received a 4 billion dollar increase in funding, and 11 billion dollars have been allocated for researching vaccines and treatments. All of this is to improve current response efforts.
About $340 billion has been allocated to support local governments with funding for initiatives to address COVID-19 at a community level. This money will go towards areas such as schools to organize online learning, and providing assistance to communities that don’t have easy access to necessities, such as groceries.
This funding is absolutely necessary to address a global pandemic that shows no sign of slowing down. However, some of the allocations are a little questionable. The funding for vaccine research isn’t well established as to who will be receiving it, or how it will be used. The funding for hospitals is equally vague, especially in terms of how it will be distributed to hospitals. More importantly, healthcare workers aren’t being supported nearly enough. They are working extremely demanding shifts to help thousands of Americans, and don’t have access to enough resources to manage. In general, this isn’t enough to meet the needs of this country. But it is still a vital first step.
Individuals:
Individuals earning less than $75,000 per year will receive a $1200 one time payment. This payment phases out up to a $99,000 salary, at which point no payment is received.
For couples filing jointly, the maximum shared salary to receive the total $2400 is $150,000. After that, it phases out up to $200,000 combined salary, at which point no money is received. These cash payments will cost roughly 300 billion dollars in all.
Unemployment benefits have been expanded and increased to allow more Americans to receive aid. Every individual already receiving unemployment payments will get a 600 dollar increase per week. 13 weeks of unemployment insurance is also being added, to provide more flexibility.
These are solid measures being put in place, giving people a needed buffer to make it through these times. Unexpected costs can spring up at any time, and now more than ever, there is almost no way to compensate for it. One in four families with total incomes of $150,000 a year or more live paycheck to paycheck already. Two in five Americans can’t handle an unexpected $400 dollar expense. Wealth disparity has been an issue for decades, and the issues that have been swept under the carpet for years are finally causing a noticeable impact. Again, this is not an easy solution, and much more needs to be done, but this is absolutely vital to humans across the country.
Corporations:
It wouldn’t be a U.S. law without corporate bailouts. About $500 billion dollars have been allocated for loans and tax credits to large companies, to incentivize them to keep their workers and maintain payroll. Health benefits are being covered as well.
There are some stipulations, such as barring these companies from stock buybacks, and all these loans must be paid back in full. Still, this seems excessive, given the capital already available to companies such as Amazon, who can easily cover all their workers’ needs. We have millions of small businesses in desperate need of aid that frankly aren’t receiving enough long term support from this package. So little money, in comparison, is being devoted to research and supplies. The economy is important, but priorities need to be set over who is in need of what.
Keep in mind the magnitude of this bill, over 2 trillion dollars. Just using the 500 billion dollars allocated to corporations, you could eliminate homelessness (20 billion dollars), solve hunger in the US (25 billion), end poverty in the US (175 billion), and replace all pipes in Flint, Michigan (60 million), with 280 billion dollars still remaining. Responsible, effective spending is important, especially when there are so many issues that exist that are completely manageable to fix with the US budget. It’s sad that it took a global pandemic for Congress to recognize what power they have, but now it’s clear that we are more than capable of allocating funds to solve these issues.
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