CARES Act: Economic Relief for Individuals & Families, Small Businesses, Distressed Sectors of the U.S. Economy, & Hospitals Amid the Coronavirus Crisis (H.R. 748)

What is H.R. 748?

(Updated July 31, 2021)

UPDATE - 3/25/2020: This legislation has been amended to serve as the legislative vehicle for the Coronavirus Aid, Relief, and Economic Security (CARES) Act, after its original provisions related to the repeal of an Obamacare tax were enacted as part of a December 2019 spending package. In its current form, the roughly $2 trillion bill would provide recovery checks to most Americans; expanded unemployment benefits to those unable to work; forgivable loans to small businesses to meet their expenses; assistance to distressed corporations with extra oversight of that aid; plus additional resources for healthcare providers and governments at the state & local level to deal with the coronavirus (COVID-19) pandemic. A breakdown of the 880-page current bill’s various provisions can be found below.

ASSISTANCE FOR AMERICAN WORKERS, FAMILIES, & BUSINESSES

Recovery Rebates: This section would provide recovery rebate checks totaling up to $1,200 for individual U.S. residents ($2,400 for married joint filers) who aren’t dependents and have a Social Security number. Those amounts would increase by $500 for each dependent child. There would be no phase-in, so Americans with no income and those whose income stems entirely from a non-taxable, means-tested benefits program (like Social Security) would be eligible for the full rebate check.

Recovery rebate checks would be reduced for higher income taxpayers and begin phasing out at $75,000 in adjusted gross income (AGI) for individual taxpayers & $150,000 AGI for married filers. The recovery rebate amount would be reduced by $5 for each $100 a taxpayer’s income exceeds the phase-out threshold; and it would phase out entirely for single taxpayers with incomes over $99,000 & married filers with AGI exceeding $198,000. The Internal Revenue Service (IRS) would base these AGI amounts on the taxpayer’s 2019 tax return if it’s been filed, or on their 2018 tax return if not.

The IRS would directly deposit the recovery rebate checks in the bank accounts of Americans who have set up Direct Deposit with the agency, and mail checks to those who haven’t. Recovery rebates via Direct Deposit would be available within about three weeks, while checks would be between six and eight weeks.

Unemployment Enhancements: A temporary Pandemic Unemployment Assistance program would be created through December 31, 2020 to provide payments to those who wouldn’t be traditionally eligible for unemployment benefits, including the self-employed, independent contractors, those with limited work history, and others who are unable to work as a direct result of the coronavirus public health emergency. An additional $600 per week payment would be made to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months.

The federal government would reimburse states for half of the unemployment relief costs incurred by nonprofits, government agencies, and Indian tribes they incur through December 31, 2020, to pay unemployment benefits. The federal government would also temporarily fund the first week of unemployment benefits for recipients in states that choose to pay recipients as soon as they become unemployed instead of requiring one waiting week through the end of 2020.

Through the end of 2020, the federal government would finance 100% of “short-time compensation” programs in states with existing short-time compensation programs; and 50% of the costs incurred by states that establish new short-time compensation programs. These programs would assist workers whose hours were reduced instead of being laid off, and the workers would receive a pro-rated unemployment benefit.

Individual & Family Tax Relief: Similar to special retirement rules used previously for disaster relief, the 10% early withdrawal penalty for distributions up to $100,000 from qualified retirement accounts would be waived for coronavirus-related purposes. Income from these distributions would be subject to tax over three years, and the taxpayer could recontribute the funds to an eligible retirement plan within three years without regard to that year’s contribution cap. Coronavirus-related distributions would include those: 

• Made to an individual diagnosed with COVID-19; 

• Whose spouse or dependent is diagnosed with COVID-19, 

• Who experience adverse financial consequences as a result of being quarantined, furloughed, laid off, have work hours reduced, are unable to work due to lack of child care, the closing or reduced hours of a business owned or operated by the individual, or other factors as determined by the Treasury Secretary.

To encourage Americans to contribute to churches & charitable organizations in 2020, they would be permitted to deduct up to $300 of cash contributions “above the line” (i.e. whether or not they itemize their deductions).

Employers would be able to provide a student loan repayment benefit to employees on a tax-free basis. They could contribute up to $5,250 annually toward an employee’s student loans and those payments would be excluded from the employee’s income for tax purposes. The $5,250 employer cap would apply to both the new student loan repayment benefit and other educational assistance (for tuition, fees, books) allowed under current law. This provision would apply to student loan payments made by an employer on behalf of an employee after the date of enactment and before January 1, 2021.

Businesses: Employers whose operations were fully or partially suspended due to a  coronavirus-related shutdown order, or whose gross receipts declined by more than 50% compared to the same quarter the prior year, would be eligible for an employee retention credit. It would be a refundable payroll tax credit for 50% of wages paid by employers to employees during the COVID-19 crisis and based upon qualified wages paid to the employee:

• For employers with over 100 full-time employees, qualified wages are wages paid to employees when they aren’t providing services due to the above-described COVID-19 circumstances.

• For employers with 100 or fewer full-time employees, all employee wages would qualify for the credit, whether the employer is open for business or subject to a shut-down order.

• The credit would be provided for the first $10,000 of compensation, including health benefits, paid to an eligible employee or incurred from March 13, 2020 through December 31, 2020.

Employers & self-employed individuals would be allowed to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government (employers are responsible for paying a 6.2% Social Security tax on employee wages). The deferred employment tax would be required to be paid over the following two years, with half to be paid by December 31, 2021, and the other half by December 31, 2022.

The limitations on the ability of companies to use net-operating losses (NOLs) from prior years in the current tax year would be relaxed. Currently, they’re subject to a taxable income limitation and they can’t be carried back to reduce income in a prior tax year. This provision would allow losses from 2018, 2019, or 2020 to be carried back five years, and would temporarily remove the taxable income limitation to allow an NOL to fully offset income. These changes would allow companies to utilize losses & amend prior years’ returns to free up cash flow & liquidity during the COVID-19 pandemic, and would also be available to pass-through businesses & sole-proprietors.

Additionally, this section would:

• Accelerate the ability of companies to recover AMT credits;

• Temporarily increase the amount of interest expense businesses can deduct from 30% to 50%;

• Enable businesses (especially those in the hospitality industry) to immediately write off costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building; and

• Waive the federal excise tax on any distilled spirits used for or contained in hand sanitizer that is produced or distributed in a manner consistent with guidance issued by the Food & Drug Administration and is effective for calendar year 2020.

KEEPING AMERICANS PAID & EMPLOYED

This section would provide $350 billion for a new Paycheck Protection Program under the Small Business Administration's (SBA) 7(a) program to make loans to small businesses with 500 employees or fewer or that otherwise meet the current SBA size standards; self-employed individuals & “gig economy” workers; and certain non-profits, including 501(c)(3) organizations, 501(c)(19) veteran organizations, and tribal businesses with under 500 employees.

Loans under the Paycheck Protection Program would equal 250% of an employer’s average monthly payroll, up to a maximum loan amount of $10 million, and would have a 100% federal guarantee (no collateral or personal guarantee required). Covered payroll costs include salary, wages, and payment of cash tips up to an annual pay rate of $100,000; employee group healthcare benefits, including insurance premiums; retirement contributions; and covered leave.

Borrowers would be eligible for loan forgiveness equal to the amount spent by the borrower on payroll costs during an 8-week period after the loan origination date (including additional wages to tipped workers), interest payment on any mortgage incurred prior to February 15, 2020, rent payment on a lease in force prior to that date, and utility payment for service which began prior to that date.

Loan forgiveness amounts couldn’t exceed the principal amount of the loan. Forgiveness amounts would be reduced proportionally by any reduction in employees retained compared to the prior year & reduced by the reduction in pay of any employee beyond 25% of their prior year compensation. Loan amounts not forgiven after one year would be carried forward as an ongoing loan with a maximum term of 10 years, at a maximum of 4% interest, while the 100% loan guarantee would remain intact. PPP loan payments could be completely deferred for at least six months but no more than one year.

To encourage employers to rehire employees who have already been laid off due to the COVID-19 crisis, borrowers that re-hire workers previously laid off wouldn’t be penalized for having a reduced payroll at the beginning of the loan period.

Loans would be available immediately through more than 800 existing SBA-certified lenders, including banks, credit unions, and other financial institutions. The SBA would be required to streamline the process to bring additional lenders into the program, and the Treasury Secretary would be authorized to expedite the addition of new lenders.

Additionally:

• Eligibility for the SBA’s Economic Injury Disaster Loan (EIDL) program would be expanded, and $10 billion would be provided to support the expanded EIDL program.

• Borrowers with an existing Economic Injury Disaster Loan (EIDL) could apply for PPP payroll assistance, but if it isn’t a COVID-19-related EIDL loan they wouldn’t be able to refinance into the PPP loan. The emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven under the PPP.
  

• SBA would be required to pay all principal, interest, and fees on all existing SBA loan products (excluding PPP loans) for six months to provide relief to small businesses negatively affected by COVID-19.

ASSISTANCE TO SEVERELY DISTRESSED SECTORS OF THE U.S. ECONOMY

This section would provide $500 billion to the Treasury’s Exchange Stabilization Fund to provide loans, loan guarantees, and other investments to eligible U.S. businesses. This would include $46 billion in direct lending:

• $25 billion in direct lending to passenger air carriers & eligible businesses that provide inspection, repair, replacement, or overhaul services, and ticket agents.

• $4 billion for cargo air carriers.

• $17 billion for businesses important to maintaining national security.

The remaining $454 billion would be used for loans, loan guarantees, and investments in support of the Federal Reserve’s lending facilities to eligible businesses, states, and municipalities. The Federal Reserve’s lending is a critical tool to mitigate extraordinary pressure in financial markets that would otherwise have severe adverse consequences for households, businesses, and the U.S. economy at large.

All direct lending would have to meet the following criteria:

• Alternative financing isn’t reasonably available to the business;

• The loan is sufficiently secured at an interest rate that reflects the risk of the loan and, if possible, is at least an interest rate based on market conditions for comparable obligations before the coronavirus outbreak;

• The duration of the loan should be as short as possible and couldn’t exceed 5 years;

• Borrowers & affiliates can’t engage in stock buybacks, unless contractually obligated, or pay dividends until the loan is no longer outstanding or one year after the date of the loan;

• Borrowers must, until September 30, 2020, maintain employment levels as of March 24, 2020, to the extent practicable, and retain at least 90% of its employees as of that date;

• A borrower would have to certify that it’s a U.S.-domiciled business & its employees are predominantly located in the U.S.;

• The loan cannot be forgiven; and

• In the case of borrowers critical to national security, their operations are jeopardized by losses related to the coronavirus pandemic.

Lending through the Federal Reserve under this section would have to be broad-based, with verification that each participant isn’t insolvent and is unable to find adequate financing elsewhere. No loan forgiveness would be permissible under a Federal Reserve lending facility.

Treasury would endeavor to implement a special Federal Reserve lending facility targeted at non-profit organizations & businesses between 500 & 10,000 employees, subject to additional loan criteria & obligations, such as:

• The funds must be used to retain at least 90% of the recipients workforce, with full compensation & benefits, through September 30, 2020;

• The recipient couldn’t outsource or offshore jobs for the term of the loan plus an additional two years;

• The recipient couldn’t abrogate existing collective bargaining agreements for the term of the loan plus an additional two years; and

• The recipient would have to remain neutral in any union organizing effort for the term of the loan.

All authority to make new loans, loan guarantees, or other investments would terminate on December 31, 2020, and the duration of all loans couldn’t exceed five years.

Limitations & Oversight: Recipients of any direct lending under this section would be prohibited from increasing the compensation of any officer or employee whose total compensation exceeds $425,000, or from offering such employees severance pay or other benefits upon termination of employment which exceeds twice their total annual compensation, until one year after the loan is no longer outstanding. Officers or employees making over $3 million last year would also be prohibited from earning more than $3 million plus 50% of the amount their compensation last year exceeded $3 million.

Air carriers receiving loans under this section would be required to maintain scheduled air transportation where deemed necessary by the Secretary of Transportation. Federal excise taxes in relation to commercial aviation would be repealed.

Any company in which the president, vice president, executive department head, member of Congress, or any such individual’s spouse, child, son-in-law, or daughter-in-law own over 20% of the outstanding voting stock wouldn’t be eligible for loans, loan guarantees, or other investments provided under this section.

A Special Inspector General for Pandemic Recovery would be established within the Treasury Dept. They would be appointed by the president to conduct, supervise, and coordinate audits and investigations of the making, purchase, management, and sale of loans, loan guarantees, and other investments made by the Treasury Secretary under this section. The Special Inspector General would keep Congress informed through quarterly reports.

A Congressional Oversight Commission would be established with oversight of the implementation of this section by the Treasury & the Federal Reserve. It would consist of five members: one appointed by the House Speaker; one by the House Minority Leader; one by the Senate Majority Leader; one by the Senate Minority Leader; and one appointed by the House Speaker & Senate Majority Leader after consulting with the Senate & House Minority Leaders. The panel could old hearings, take testimony, and secure information from federal agencies it deems necessary to carry out its responsibility, and would be required to submit reports to Congress every 30 days specifying:

• The impact of purchases made under this section on the financial well-being of the American people, financial markets, and financial institutions;

• The extent to which the information made available on transactions under this title has contributed to market transparency; and

• The effectiveness loans, loan guarantees, and investments made under this title of minimizing long-term costs to the taxpayer & maximizing the benefits for taxpayers.

The Oversight Commission would terminate on September 30, 2025.

A Pandemic Response Accountability Committee made up of Inspectors General would be established to conduct and coordinate audits and investigations to provide accountability and identify waste, fraud, and abuse.

Consumer Protections: Credit reporting agencies who agree to account forbearance or agree to modified payments with respect to an obligation or account of a consumer that has been impacted by COVID-19 would be required to report that obligation or account as either “current” or as the status reported prior to the accommodation (unless the consumer becomes current). This credit protection would be available beginning January 31, 2020, and end at the later of 120 days after enactment or 120 days after the termination of the coronavirus national emergency declaration.

Foreclosures on all federally-backed mortgage loans would be prohibited for a 60-day period beginning on March 18, 2020. Up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to the COVID-19 emergency. This would include mortgages purchased by Fannie Mae & Freddie Mac, insured by HUD, VA, or USDA, or directly made by USDA.

Up to 90 days of forbearance would be available for multifamily borrowers with a federally-backed multi-family mortgage loan who have experienced a financial hardship. Borrowers receiving forbearance couldn’t evict or charge late fees to tenants for the duration of the forbearance period.

For 120 days after the enactment of this legislation, landlords would be prohibited from initiating legal action to recover possession of a rental unit or to charge fees, penalties, or other charges to the tenant related to such nonpayment of rent where the landlord’s mortgage on that property is insured, guaranteed, supplemented, protected, or assisted in any way by HUD, Fannie Mae, Freddie Mac, the rural housing voucher program, or the Violence Against Women Act of 1994.

SUPPORTING THE HEALTHCARE SYSTEM IN THE CORONAVIRUS FIGHT

Addressing Supply Shortages: This section would clarify that the Strategic National Stockpile (SNS) can stockpile medical supplies, such as swabs needed for COVID-19 diagnostic tests. It would provide permanent liability protection for manufacturers of personal protective equipment (PPE), such as masks & ventilators, in the event of a public health emergency to incentivize production & distribution. Additionally, the National Academies would be directed to produce a report on the manufacturing supply chain and provide Congress with recommendations to strengthen the U.S. manufacturing supply chain.

The FDA would be required to prioritize & expedite the review of drug applications & inspections to prevent or mitigate a drug shortage. Drug manufacturers would be required to submit more information when there is a supply interruption, including about active pharmaceutical ingredients when they’re the cause of the interruption.

Manufacturers would be required to make contingency plans to ensure a backup supply of products. The FDA & Government Accountability Office (GAO) would be directed to review internal coordination at FDA on drug inspection & enforcement & drug shortages. Drug manufacturers would have a safe harbor to communicate truthful & non-misleading information regarding products with an emergency authorization from the FDA. During a public health emergency, a medical device manufacturer would be required to submit information about a device shortage or device component shortage upon request by the FDA. The GAO would examine FDA coordination, communication, and decision-making within FDA related to assessing device shortages & risks associated with the supply of devices.

Healthcare Access for COVID-19 Patients: This section would clarify that all diagnostic testing for COVID-19 is to be covered by private insurance plans without cost sharing. For tests covered with no cost to patients, insurers would be required to pay either the rate specified in a contract between the provider & the insurer, or if there isn’t a contract, a cash price posted by the provider.

Free coverage without cost sharing would be provided within 15 days for a COVID-19 vaccine that has in effect a rating of “A” or “B” in the recommendations of the U.S. Preventive Services Task Force or a recommendation from the Advisory Committee on Immunization Practices (ACIP).

Community Health Centers would receive $1.32 billion in supplemental funding for testing & treating patients for COVID-19. Health Resources & Services Administration (HRSA) grant programs that promote the use of telehealth technologies for healthcare delivery, education, and health information services would be reauthorized. Telehealth offers flexibility for patients with, or at risk of contracting, COVID-19 to access screening or monitoring care while avoiding exposure to others. HRSA grant programs to strengthen rural community health by focusing on quality improvement, increasing healthcare access, coordination of care, and integration of services would be reauthorized. Rural residents are more likely to be older & have a chronic disease, which could increase their risk for more severe illness if they contract COVID-19.

A Ready Reserve Corps would be established to ensure the U.S. has enough trained doctors & nurses to respond to COVID-19 & other public health emergencies. Doctors who provide volunteer medical services during the COVID-19 public health emergency would have liability protections.

Consumers would be able to use a health savings account (HSA) to cover telehealth services prior to reaching their deductible, thus increasing access for patients who may have COVID-19 & protecting other patients from potential exposure. Patients would also be allowed to use funds from HSAs & Flexible Spending Accounts for the purchase of over-the-counter medical products, including those needed in quarantine & social distancing, without a prescription from a physician.

Telehealth could be used for patients enrolled in Medicare from providers who they haven’t seen in the three previous years. Those patients could also go to Federally Qualified Health Centers & Rural Health Clinics to receive a telehealth consultation. The use of telehealth would also be expanded for Medicare patients receiving home dialysis or hospice care. Physician assistants, nurse practitioners, and other professionals beyond physicians would be allowed to order home health services for Medicare beneficiaries.

Hospitals providing in-patient care to a Medicare beneficiary with COVID-19 would receive a payment that’s increased 20% from what it would normally receive for the duration of the COVID-19 emergency. Acute care hospitals would have flexibility during the COVID-19 emergency period to transfer patients out of their facilities and into alternative care facilities to prioritize resources needed to treat COVID-19 cases.

Additionally:

• Hospitals would receive an existing Medicare accelerated payment program for the duration of the COVID-19 emergency.

• Medicare Part D plans would be required to provide up to a 90-day supply of a prescription medication if requested by a beneficiary during the COVID-19 emergency.

• The Families First Coronavirus Response Act would be clarified to ensure that states would receive the Medicaid 6.2% FMAP increase; and that uninsured individuals can receive a COVID-19 test & related service with no cost-sharing in any state Medicaid program that elects to offer such an enrollment option.

Innovation: The Biomedical Advanced Research & Development Authority (BARDA) would be allowed to more easily partner with the private sector on research & development by removing the cap on other transaction authority during a public health emergency.

Breakthrough Therapy designations would be provided for animal drugs that can prevent human diseases, and speed up the development of drugs to treat animals to help prevent animal-to-human transmission which is suspected to have occurred with the outbreak of novel coronavirus, leading to the COVID-19 pandemic.

Miscellaneous Provisions: Nutrition requirements under the Older Americans Act meal programs would be waived during the COVID-19 public health emergency to ensure seniors can get meals in case certain food options aren’t available.

HHS would be directed to carry out an initiative to improve awareness of the importance & safety of blood donation & the continued need for blood donations during the COVID-19 public health emergency.

The following programs would be extended through November 30, 2020 at current funding levels:

• The Temporary Assistance for Needy Families (TANF) program;

• Community Health Centers, the National Health Service Corps, and the Teaching Health Center Graduate Medical Education Program;

• The Special Diabetes Program for Type I Diabetes and the Special Diabetes Program for Indians; 

• The Sexual Risk Avoidance Education program, which provides funds to states to avoid sexual risk by refraining from sexual activity; and

• The Personal Responsibility Education program, which provides states & localities with funding to implement evidence-based strategies for teen pregnancy & HIV/AIDS prevention;

Education Provisions: This section would waive the institutional matching requirement for campus-based aid programs, and allow institutions to transfer unused work-study funds for use as supplemental grants. Institutions could award additional Supplemental Educational Opportunity Grants for Emergency Aid to students impacted by COVID-19, and could issue work-study payments to students unable to work due to workplace closures as a lump sum or in payments similar to paychecks.

Students who dropped out of school because of COVID-19 would have this term excluded from counting toward lifetime subsidized loan eligibility. They would also be excluded from counting toward lifetime Pell grant eligibility, and wouldn’t be required to return Pell grants from this term. For students who dropped out of school as a result of COVID-19, their grades wouldn’t affect their federal academic requirements to continue to receive Pell Grants or student loans in the future.

Historically Black Colleges & Universities (HBCUs) would be able to defer payments on current Capital Financing loans during the national emergency period so they can devote funding to COVID-19 efforts.

The Secretary of Education would be able to defer student loan payments, principal, and interest for 3 months without penalty to the student, and could defer for an additional 3 months if necessary under the public health emergency declaration.

Labor Provisions: This section would create a limitation that an employer shouldn’t be required to pay more than $200 per day and $10,000 in the aggregate for each employee in paid family & medical leave. Additionally, employers wouldn’t be required to pay more than $511 per day and $5,110 in the aggregate for sick leave; or more than $200 per day and $2,000 in the aggregate to care for a quarantined individual or child for each employee in paid leave.

Additionally:

• The Office of Management & Budget (OMB) would be allowed to exclude certain executive branch employees from the paid family leave mandate.

• Applications for unemployment compensation & assistance with the application would have to be accessible in person, by phone, or online.

• Employees laid off by an employer on March 1, 2020, or later would be allowed to access paid family & medical leave in certain instances if they’re rehired if they worked for the employer for at least 30 days prior.

RELIEF FOR STATES, TERRITORIES, & TRIBES

This section would establish a $150 billion coronavirus relief fund that would be available to states, territories, and tribal governments to use for expenditures incurred due to the COVID-19 public health emergency in the face of revenue declines. It would be allocated by population proportions, with a minimum of $1.25 billion for states with relatively small populations.

ADDITIONAL EMERGENCY FUNDING

This section would provide $339.855 billion in coronavirus emergency funding, with roughly 80% of that total ($274.231 billion) going to states, local governments, and communities, including:

Of the total, $140.4 billion would go to the Dept. of Health & Human Services (HHS). That would include a $127 billion Public Health & Social Services Emergency Fund to:

• Reimburse hospitals and healthcare providers ($100 billion); 

• Procure personal protective equipment (PPE), ventilators, and other medical supplies for federal & state response efforts for the Strategic National Stockpile (SNS) ($16 billion);

• Advance construction, manufacturing, and purchase of vaccines & therapeutic treatments of coronavirus ($3.5 billion);

• Improve the capacity of healthcare facilities to respond to medical events (at least $250 million); and 

• Expand services & capacity for rural hospitals, telehealth, poison control centers, and the Ryan White HIV/AIDS program ($275 million).

Additionally, the Centers for Disease Control & Prevention (CDC) would receive a total of $4.3 billion. Of that total, $1.5 billion would go to state & local preparedness & response activities; $500 million for global health security efforts; $500 million to invest in better COVID-19 tools & build state & local public health infrastructure; and $300 million to an infectious disease fund to allow HHS flexibility in responding to pandemic threats.

The National Institutes of Health would receive $945.5 million for vaccine, therapeutic, and diagnostic research to increase our understanding of COVID-19, including its underlying risks to cardiovascular & pulmonary conditions.

The U.S. Dept. of Agriculture (USDA) would receive $9.5 billion to support agricultural producers impacted by COVID-19, including producers of specialty crops, producers that supply local food systems, and livestock producers. USDA would receive an additional $25.06 billion to support food & nutrition programs, including:

• $15.51 billion for the Supplemental Nutrition Assistance Program (SNAP) to cover waiver authorities granted in the “phase 2” coronavirus relief bill.

• $8.8 billion for food purchases & demonstration projects to increase flexibility for schools.

The Dept. of Homeland Security (DHS) would receive a total of $45.9 billion in funding, of which $45.4 billion would go to the Federal Emergency Management Administration (FEMA) to support its response & recovery activities, and reimbursements of states & localities nationwide through the Disaster Relief Fund. Of the total, $400 million in grants would be provided for firefighters, emergency managers, and providers of emergency food & shelter. Additionally:

• $178 million would provide PPE for DHS personnel.

• $141 million would support Coast Guard Reserve deployments for medical response & port security operations.

• $100 million for increased cleaning & sanitization of Transportation Security Administration (TSA) operations at airports & other facilities.

The Dept. of Transportation would receive $31.1 billion, including:

• $25 billion for operating & capital expenses of transit providers, distributed using existing Federal Transit Administration formulas.

• $10 billion for the Federal Aviation Administration & Airport Improvement Program to maintain operations at airports, distributed by formula.

• $1.018 billion for Amtrak to cover revenue losses due to coronavirus.

The Dept. of Education would receive a total of $30.9 billion in funding, including:

• $14.25 billion in formula funding to institutions of higher education to directly support students facing coronavirus-related needs, and to support institutions as they cope with the immediate effects of coronavirus & closures; as well as funding for Historically Black College & Universities (HBCUs) and other minority serving institutions.

• $13.5 billion in formula funding to states to help schools respond to coronavirus & related school closures, meet the needs of students & teachers, improve the use of education technology, support distance education, and make up for lost learning time.

• $3 billion in flexible formula funding to be allocated based on the needs of their elementary & secondary schools and their institutions of higher education.

• $13 million in support for Howard University, a federally-chartered HBCU, and $7 million in support for Gallaudet University, a federally chartered university for deaf & hearing impaired students.

The Dept. of Veterans Affairs would receive a total of $19.6 billion in funding, including $14.4 billion to support increased demand for healthcare services at VA facilities, telehealth, the purchase of medical equipment (including PPE), and testing kits. The total would also include $2.1 billion to the Community Care program to support increased demand for care in the community, particularly emergency room & urgent care.

The Dept. of Housing & Urban Development (HUD) would receive $17.4 billion, including:

• $5 billion in Community Development Block Grants to provide communities with funding to provide a wide range of resources related to COVID-19, including services for senior citizens, the homeless, and public health services.

• $4 billion in homeless assistance grants to enable state & local governments to address coronavirus among homeless populations.

• $1.25 billion in Section 8 voucher rental assistance for seniors, the disabled, and low-income working families who will experience loss of income from coronavirus.

• $1 billion in project-based rental assistance to make up for reduced tenant payments as a result of coronavirus.

The Dept. of Defense (DOD) would receive a total of $10.5 billion in funding, including:

• Roughly $1.8 billion to address healthcare cases for eligible military members, dependents, and retirees; procure additional medical equipment, including PPE.

• $1.6 billion to ensure maximum capacity of military treatment facilities’ direct care system.

• $1.5 billion in National Guard support for emergency deployments by states & territories.

• $1.45 billion to mitigate the impact of COVID-19 on production lines, supply chain, military depots, and labs.

• $1.1 billion for additional shortfalls in defense private sector care.

• $1 billion for the Defense Production Act to increase access to materials necessary for national security & pandemic recovery.

• $713.6 million for medical supplies & PPE on military bases & ships, and for the deployments of the USNS Comfort & USNS Mercy hospital ships.

The Commerce Dept. would receive $1.886 billion, including $1.5 billion to support economic development grants for states & communities suffering economic injury because of the coronavirus; and $300 million to provide direct financial assistance to fishers, fishery participants, and communities affected by coronavirus.

The State Dept. would receive $1.115 billion, including:

• $353 million for the U.S. Agency for International Development (USAID), including $258 million to address humanitarian & health needs in coronavirus-affected areas abroad & $95 million for operating expenses.

• $350 million for migration & refugee assistance to respond to coronavirus among vulnerable refugee populations abroad.

• $324 million to bolster diplomatic programs & their coronavirus response domestically & abroad.

• $88 million to support the evacuation of more than 6,000 Peace Corps volunteers

The Indian Health Service would receive $1.032 billion to address critical response needs in Indian Country, such as medical & equipment needs, mobile triage units, medicines, and increased capacity for telehealth.

The Dept. of Justice (DOJ) would receive $1 billion, including $850 million in Byrne JAG grants to assist state & local governments to support criminal justice needs related to coronavirus — such as overtime, PPE, and medical needs for prisons, jails, and detention centers — with no match required. The Bureau of Prisons would receive $100 million for correctional officer overtime, PPE, clean work & living environments, and inmate medical needs.

OTHER EMERGENCY FUNDING PROVISIONS

• The Election Assistance Commission would receive $400 million to provide federal grants to states for the purpose of modifying their election systems to respond to the coronavirus.

• The borrowing authority of the U.S. Postal Service would be increased by $10 billion to respond to effects of coronavirus, while preserving the authority of the Treasury to set the terms of the loan. Treasury would also have the authority to only provide the loan as-needed in the event that costs or revenues continue to suffer because of coronavirus.

• The Social Security Administration would receive $300 million to help it keep up with key workloads, make up for lost productivity, and otherwise improve its ability to serve the public.

• The National Endowments for the Arts & Humanities would receive a total of $150 million in grants, evenly divided between the Endowment for the Arts & Endowment for the Humanities, to help local, state, and regional communities provide continued access to cultural organizations & institutions of learning.

• The Kennedy Center would receive $25 million for deep cleaning, increased teleworking capabilities, and operating & administrative expenses to ensure it resumes normal operations upon reopening.

• The Smithsonian Institution would receive $7.5 million for increased teleworking capabilities, deep cleaning of facilities, and overtime for security, medical staff, and zookeepers.

• $75 million in stabilization grants to the Corporation for Public Broadcasting to maintain programming services & to preserve small & rural public telecommunication stations.

Argument in favor

No compromise legislation is perfect, but this bill provides Americans with timely relief from the coronavirus crisis by providing individuals & families with recovery rebate checks, expanding unemployment benefits, and extending forgivable loans to small businesses so that they cover payroll & retain employees. It also extends loans to larger businesses in sectors of the economy hit hard by COVID-19 shutdowns that must be repaid & have stringent oversight, bolsters the healthcare response to the crisis, and gives states resources to address the crisis.

Argument opposed

This bill goes too far in extending financial aid to small businesses and large corporations that have been harmed by the coronavirus crisis. It doesn’t do enough to help low-income individuals & families deal with the financial costs of the ongoing national struggle against the coronavirus. Alternatively, recovery checks for Americans shouldn’t be means-tested as people’s income from 2019 or 2018 may not reflect their income this year. This bill has too many pet projects from both sides of the aisle tucked into it.

Impact

Individuals & families; small businesses; economically distressed sectors of the U.S. economy; healthcare providers & manufacturers of medical products; and relevant agencies, particularly the Treasury Dept. & HHS.

Cost of H.R. 748

A CBO cost estimate is unavailable.

Additional Info

In-Depth: On the Senate floor, Majority Leader Mitch McConnell (R-KY) offered the following remarks after a deal was reached on the “phase 3” coronavirus relief bill in the early hours of Wednesday morning:

“I will leave it to others to compare the bipartisan Sunday bill to the final version we will pass today and determine whether the last few changes really required or merited these three days of delay, the face of this worsening crisis. But that Washington drama does not matter anymore. The Senate is going to stand together, act together, and pass this historic relief package. Struggling Americans are going to go to their mailboxes and find four-figure checks to help with their bills because the Senate stepped up. Many American families who have poured everything into a restaurant, or a shop, or a small manufacturer are going to keep making payroll and keep their businesses alive because the Senate stepped up. Hundreds of thousands of workers in key sectors who might well have been laid off through no fault of their own will instead get to keep their jobs and continue their career because the Senate stepped up. And for the healthcare heroes who leave their own sleeping children and drive to the hospital for an all-night shift, who spend hour after hour healing the sick, comforting strangers, and literally battling this disease there will be more masks in the supply closets, more funding for their hospitals, and soon, more new treatments to administer to their patients because the Senate stepped up.” 

After McConnell’s remarks, Minority Leader Chuck Schumer (D-NY) added:

“Like all compromises, this bill is far from perfect. But we believe the legislation has improved sufficiently to warrant its quick consideration and passage. Because many Democrats and Republicans were willing to do the serious and hard work, the bill is much better than where it started--and starting yesterday morning we all came together to get this bill done. We worked in a bipartisan way as this body should have worked and should work, and here we are.”

Of Note: This bill is considered to be “phase 3” of the federal legislative response to the coronavirus outbreak. Here’s a look back at “phase 1” and “phase 2”:

• "Phase 1" was the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (H.R 6074), which provided $8.3 billion to fund acquisition of medical supplies and develop treatments and vaccines. It passed Congress with bipartisan support in both chambers and was signed into law.

• "Phase 2" was the Families First Coronavirus Response Act (H.R. 6201), which ensured the availability of free coronavirus testing, in addition to providing for paid leave under certain circumstances, and expanding food aid & unemployment insurance benefits during the outbreak.

Media:

• Senate Appropriations Committee Press Release

• Senate Banking Committee Press Release

• Senate Finance Committee Press Release

• Senate Health, Education, Labor, and Pensions Committee Press Release

• Senate Small Business Committee Press Release

• Senate Appropriations Committee Section-by-Section

• Senate Finance Committee Section-by-Section (Tax & Unemployment)

• Senate Finance Committee Section-by-Section (Health)

• Senate Health, Education, Labor, and Pensions Section-by-Section

• Senate Small Business Committee Section-by-Section

• Senate Majority Leader Mitch McConnell (R-KY) Remarks

• Senate Minority Leader Chuck Schumer (D-NY) Remarks

• Countable