March 27, 2020 -2:45 PM
** Alert updated to reflect developments
House and Senate lawmakers have passed “Phase 3” of the federal government’s efforts to address the coronavirus national emergency in the U.S. (additional information on Phase I and Phase II are available here).
H.R. 748, the “Coronavirus Aid, Relief, and Economic Security (CARES) Act,” was approved by the Senate by a vote of 96-0 just before midnight on March 25. The House passed the measure by voice vote Friday, March 27 afternoon, sending the bill to the President for his signature. The President signed the CARES Act into law hours later.
The CARES Act is the largest federal effort of its kind in history, designating $2 trillion to alleviating economic strife, providing assistance for medical workers and the nation’s healthcare system, and addressing other hardships caused by the coronavirus. The agreement was the result of days of contentious negotiations between Senate Republicans and Democrats, as well as Treasury Secretary Steven Mnuchin.
The legislation includes funding for emergency economic relief to many sectors of the economy. CARES allocates more than $350 billion for grants and low-interest loans for small businesses, expand unemployment insurance for the duration of the crisis, and direct cash payments to qualified individuals of up to $1,200 ($2,400 for qualified married couples) and $500 for each child under 17. In addition to economic relief, the CARES Act also covers the implications of coronavirus for the healthcare sector by expanding telemedicine, providing over $100 million to hospitals and healthcare centers, fast-tracking regulatory actions on treatments and vaccines, funding FEMA aid to assist states and localities with their medical response, and increasing Medicare payments for coronavirus patients. Despite efforts to include an extension of renewable energy tax credits and airline emission standards during negotiations, the package excludes nearly all renewable energy or climate initiatives proposed in alternative draft legislation released by House Democrats earlier in the week.
Senate Majority Leader Mitch McConnell (R-KY) emphasized that Congress must extend “a wartime level of investment” in effort, time, and federal money to alleviate the hardships the nation faces, while House Speaker Nancy Pelosi called for “urgent action . . . to address this threat to the lives and livelihood of the American people,” calling the coronavirus outbreak “the worst pandemic” the nation has faced “in over fifty years.”
Now that the CARES Act is enacted, Congress is expected to quickly develop of legislation to help maintain employment and bolster the economy. Future packages will likely promote efforts to spur economic growth, including sector-specific provisions focused on infrastructure, energy, and climate.
Below please find a section by section summary of the CARES Act.
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TABLE OF CONTENTS
Paycheck Protection. 1
Small Business Relief 1
Unemployment 1
Individual Aid. 4
Payroll Tax Credit 4
Supply Shortages. 4
Medical Product Supplies. 4
Coverage of Testing and Preventative Services. 4
Healthcare Workforce. 5
Education Provisions. 5
Finance and Medicare Provisions. 5
Labor Provisions. 5
Assistance for States, Municipalities, Businesses. 6
Protections for Homeowners and Renters. 6
Relief to Local, State and Tribal Governments. 6
U.S. Postal Services (USPS) 6
Department of Agriculture (USDA) 7
Departments of Commerce, Justice, Science, and Related Agencies. 7
Department of Defense (DOD) 7
Energy, Water Development, and Related Agencies. 7
Financial Services. 8
Department of Homeland Security (DHS) 8
Department of the Interior (DOI) 9
Departments of Labor (DOL), Health and Human Services (HHS), Education and Related Agencies 9
Legislative Branch. 9
Veterans Affairs (VA) and Related Agencies. 10
Department of State (State) 10
United States Agency of International Development (USAID) 10
Housing and Transportation. 10
Housing. 10
Transportation. 10
Community Development Block Grants. 11
Emergency Solutions Grants
CARES Act Summary
DIVISION A
The stimulus includes close to $350 billion in funding for the creation and oversight of a Paycheck Protection Program (PPP). The program will provide small businesses and other entities with up to $10 million of zero-fee loans. A business that retains its employees and their salary levels will be eligible for up to 8 weeks of forgiveness for average payroll and other costs. This benefit will be temporary emergency assistance through the U.S. Small Business Administration (SBA) and the Department of Treasury. The SBA Administrator must set a maximum on bank earnings for processing loan applications. The Administrator will prioritize rural communities, minorities, women, veterans, and other disproportionally underserved borrowers. Find more details on the PPP from the Senate Small Business and Entrepreneurship Committee here.
The package will deliver $265 million in grants for SBA resource partners for assistance in responding to the effects of coronavirus on small businesses. $10 billion will be provided to support expanded access to SBA’s Economic Injury Disaster Loans (EIDL) for entities suffering economic harms as a result of coronavirus in the form of emergency EIDL grants. $17 billion will be provided for SBA to pay principal, interest, and fees on all existing SBA loan products for six months on behalf of all small businesses hindered by the coronavirus. This Title also provides paid leave for employees working on small business contracts with the federal government. Find more details on small business relief and the full list of direct appropriations from the Senate Small Business and Entrepreneurship Committee here.
Under the authority of the Secretary of Labor, the bill will create a temporary Pandemic Unemployment Assistance program through December 31, 2020, for independent contractors, self-employed individuals, and others who are without work as a result of coronavirus. An additional $600 per week of payments will go to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to a third of a year. The bill will extend unemployment benefits to an additional 13 weeks through December 31, 2020, to assist individuals who remain unemployed after their state unemployment benefits lapse. Find details on unemployment measures from the Senate Finance Committee here.
The CARES Act will give U.S. residents with adjusted gross incomes of up to $75,000 an immediate cash rebate of $1,200. Married couples who fall below $150,000 will get a combined total of $2,400. People with children would receive an additional $500 per child. For those making more than $75,000 ($150,000 for a married couple), the rebate amount will reduce by $5 for each $100 of gross income that exceeds the $75,000 ($150,000 for a married couple) threshold.
Additionally, the bill will alter standing regulations allowing individuals to tap into their retirement funds up to $100,000, penalty-free, to address financial hardships associated with coronavirus. The CARES Act goes further by modifying charitable contribution deduction limits to encourage contributions in 2020. Also, the legislation will allow employers to provide student loan repayments for employees on a tax-free basis. Find details on aide from the Senate Finance Committee here.
Among other provisions, the CARES Act will provide a refundable payroll tax credit for half of the wages employers pay to employees through the duration of the coronavirus crisis. Eligible employers are those whose operations were wholly or in part suspended in relation to coronavirus or those employers whose gross receipts fall by more than 50 percent in comparison to the same quarter in 2019. The CARES Act will also allow employers and the self-employed to defer the payment of the employer share of the Social Security tax through December 31, 2020. Further, the CARES Act will accelerate the use of a company’s net operating losses (NOL) by allowing NOLs from 2018, 2019, and 2020 to be carried back five years and removing the taxable income limitations temporarily. Find more information on business provisions from the Senate Finance Committee here.
TITLE III —SUPPORTING AMERICA’S HEALTH CARE SYSTEM IN THE FIGHT AGAINST THE CORONAVIRUS
The CARES Act will direct the National Academies to provide Congress with study-based recommendations to strengthen the U.S. drug and medical device supply chain. It will also explicitly allow the Strategic National Stockpile to compile personal protection equipment and other medical supplies that address the coronavirus such as supplies for testing and administering drugs and vaccines. The CARES Act will afford liability protections for specific personal respiratory protective equipment in the event of a public health emergency. It will also require manufacturers of medical devices and pharmaceuticals to notify the Food and Drug Administration (FDA) in advance of any supply chain disruptions. Disruptions could include discontinuances or interruptions of manufacturing that would be likely to lead to a meaningful disruption in supply; the manufacturer will also have to provide a reason for the discontinuance or disruption. Further, the FDA will be required to prioritize and expedite inspections and reviews to prevent or mitigate drug and medical device shortages. Find details on supply shortages from the Health, Education, Labor, and Pensions (HELP) Committee summary here.
Medical Product Supplies
The CARES Act includes several provisions that address potential supply chain issues that could result in a shortage of therapies and supplies needed for the coronavirus crisis. It clarifies that personal protective equipment (PPE) and swabs can be added to the Strategic National Stockpile. Additionally, the proposal identifies respiratory protective devices as covered counter-measures and ensures that manufacturers of these products are not liable during the crisis. The package requires a report on the medical supply chain in the U.S., which should focus on drugs and equipment that is manufactured abroad. Find details on the medical supplies portion of the bill from the Senate HELP Committee summary here.
Coverage of Testing and Preventative Services
The CARES Act ensures that patients will have access to diagnostics and care related to the coronavirus. This access includes access to a future coronavirus vaccine being covered under Medicare Part B without cost-sharing and coverage for testing authorized by the FDA under an emergency use authorization (EUA), as well as state-approved tests. The package will require health insurers to cover coronavirus vaccines and other preventative treatments soon after they are recommended by the U.S. Preventive Services Task Force or the Centers for Disease Control and Prevention (CDC). Also, community health centers will receive $1.32 billion in funding to address the costs associated with testing and other diagnostic services and treatments. The Health Resources and Services Administration’s (HRSA) grant program will be reauthorized to support telemedicine services and rural healthcare. It also addresses the coronavirus crisis staffing needs by releasing volunteer healthcare workers from liability and allows National Health Service Corps workers to be reassigned to areas of need. Find details on coverage testing and preventative services from the Senate HELP Committee summary here.
Healthcare Workforce
The CARES Act will reauthorize and update Title VII of the Public Health Service Act (PHSA), which supports training programs for the education of practitioners in family medicine, general internal medicine, geriatrics, pediatrics, and other specialties. It also directs the Secretary of HHS to develop a plan for health workforce programs, which should identify gaps between existing programs and workforce needs. The CARES Act reauthorizes and updates Title VIII of the PHSA, which pertains to nurse workforce training programs. Find more information on the healthcare workforce from the Senate HELP Committee summary here.
Education Provisions
The CARES Act provides multiple forms of support for students and educational institutions. This support includes allowing unused work-study funds to roll over as supplemental grants, allowing institutions to provide additional funding to students impacted by the coronavirus, and allowing students who dropped out due to coronavirus -related circumstances to remain eligible for federal aid, including Pell grants. For Historically Black Colleges and Universities (HBCUs), the Secretary of Education may defer payments on HBCUs Capital Financing loans during the crisis period. For federal student loan account holders, payments and interest will be deferred for six months without penalty. Find details on the education provisions from the Senate HELP Committee Summary here.
The CARES Act includes telehealth expansion under Medicare, eliminating a provision requiring providers to have an existing relationship with a patient prior to beginning telehealth visits during the emergency period. Qualified health centers and rural healthcare providers will be permitted to provide telehealth services, and health savings accounts included in high-deductible plans can cover telehealth services before a deductible is reached. In addition, the CARES act waives certain regulatory requirements are waived for post-acute care providers, inpatient rehabilitation facilities, long-term care hospitals, and home health agencies. The CARES Act will also increase the amount paid for durable medical equipment furnished in rural areas. Find more information on finance and Medicare provisions from the Senate Finance Committee here.
Labor Provisions
This section of the CARES Act determines the limits on paid leave and paid sick leave payments for employers. For paid family and medical leave, the limit is $200 per day or $10,000 total. For paid sick leave, the limit is $511 per day or $5,100 in total. It also allows an employee who was laid off March 1, 2020, or later access to paid leave in certain instances. Additionally, employers can receive an advance tax credit instead of having to be reimbursed for paid leave expenses later. Find details on the labor provisions from the Senate HELP Committee summary here.
The CARES Act contains $504 billion in loan funding for airlines and other companies, and creates lending facilities for states, municipalities, tribes, and businesses. The Treasury Department will be able to issue $50 billion in direct loans with $25 billion allotted for passenger airlines, and $17 billion for businesses essential for national security. Such loans are conditioned on limits regarding executive compensation and stock purchases. $454 billion could be used to invest in Federal Reserve facilities to provide protection for banks lending to states, municipalities, and businesses in the form of liquidity. The CARES Act will create strict oversight and disclosure requirements for loan recipients, and mandates the Treasury Secretary and Chair of the Federal Reserve to testify each quarter before Congress with regards to the oversight of such loans. Find details about state, municipality, and business assistance and learn more about oversight from the Senate Banking Committee here.
Homeowners with federally-backed mortgages will have the ability to request a forbearance on payments for up to a year— void of penalties, fees, or additional interest. The bill will also allow a 90-day forbearance on loans for owners of multifamily rental properties, with the caveat that the owners may not evict nor charge any penalties on renters who do not pay their rent. Renters who rent from an owner of a federally-subsidized property or a property with a federally-backed mortgage will also be protected from eviction if the renter cannot pay rent for up to 120-days. Find more information about homeowner and renter protections from the Senate Banking Committee here.
The CARES Act allocates $150 billion to a “Coronavirus Relief Fund” for state, local and tribal governments, as well as entities of tribal governments. Eligible costs include any additional operating, administrative, or other expenses now being incurred because of the coronavirus. For territories and Washington, D.C., the package allocates $3 billion in emergency funding, and it allocates $8 billion for a Tribal relief fund, Indian Tribal governments, and the Tribally-owned entities of those governments. Those allocations leave $139 billion to be distributed between the various states, localities, and tribes that have been impacted. Each state will receive, at minimum, $1.25 billion, which must be paid within 30-days of the bill being signed into law. It is of note that some Governors, including Andrew Cuomo of New York, have indicated that this is not nearly enough relief funding.
The package will allow the USPS to borrow up to $10 billion from the Treasury if USPS decides it needs financial assistance for operating expenses as a result of coronavirus. The CARES Act would also alter existing USPS policy to allow it to prioritize medical supply deliveries during the coronavirus emergency and to establish alternate delivery points during the emergency if the USPS cannot reach all addresses as a result of the pandemic.
The CARES Act will provide $48.9 billion for UDSA, including the FDA. Those funds will go to supporting the Supplemental Nutrition Assistance Program (SNAP), child nutrition programs, food distribution programs on Indian reservations, the Emergency Food Assistance Program, rural development, and more. Find details on the USDA from the Senate Appropriations Committee here.
The CARES Act will provide $3.1 billion to support economic development, investments in science, and law enforcement and incarceration facilities on the federal, state, and local levels. Specifically, part of the funds will go to rebuilding impacted industries such as tourism and manufacturing supply chains through the leadership of the Economic Development Administration (EDA). Additionally, funding will go to assisting small- and medium-sized manufacturers; fishermen; civil legal aid needs for low-income Americans who experience civil or criminal crimes as a result of the coronavirus; and the National Institute of Standards and Technology (NIST) for research and development of coronavirus testing and treatment. Find details on these departments from the Senate Appropriations Committee here.
The package will fund $100 million to the Bureau of Prisons (BOP) to prevent and prepare for coronavirus internationally and domestically, including funding to the Department of Justice (DOJ). Funding will also go to state and local law enforcement to allow rapid access to personal protective equipment, medical resources, overtime payments, and facility cleanings.
The CARES Act provides $10.5 billion to the DOD for the National Guard, the Defense Production Act, military medical research programs developing vaccines and anti-viral pharmaceuticals, and military hospital expansion and expeditionary hospital packages to triple the number of beds available in military treatment facilities. Find more details on the DOD from the Senate Appropriations Committee here.
The CARES Act will provide $221 million to support the Department of Energy’s (DOE) research into the coronavirus and to agencies to respond to impeded operations that result from coronavirus, such as improving telework capabilities. Specifically, $28 million will go to the Department of Energy (DOE) to respond to coronavirus, $3.3 million to the Nuclear Regulatory Commission (NRC) to respond to coronavirus, and $99.5 million to DOE’s Office of Science to support research on coronavirus. Additionally, millions will go to the Army Corps of Engineers and Bureau of Reclamation to assist with equipment, licenses, and IT to support and improve teleworking capabilities and remote access. Find more information on DOE and other related agencies from the Senate Appropriations Committee here.
$1.82 billion will go to Financial Services and General Government agencies to address strains in small businesses. Money will also go to protecting U.S. elections, funding new IRS responsibilities, and overseeing federal spending. Relief for the Small Business Administration (SBA) would come in the form of $562 million, which would assist the SBA in funding Economic Injury Disaster Loans (EIDL) for distressed small businesses in need of financial support. $400 million will go to states to assist in preparing for the 2020 elections, ideally making voting safer for Americans across the country. This CARES Act also creates an oversight committee entitled the Pandemic Response Accountability Committee (PRAC) and will provide $200 million to the Federal Communications Commission (FCC) to support telehealth. Further, it will provide $250 million in additional funding to the Internal Revenue Code (IRS) to administer the new tax credits for paid leave. Find details on Financial Services and General Government agencies from the Senate Appropriations Committee here.
The package will also provide $7.5 million for emergency relief funding for the Supreme Court, the Courts of Appeals, and District Courts. It will also allow courts to limit in-person proceedings and authorizes courts to conduct certain criminal proceedings by videoconference or through the phone, with the defendant’s consent.
The CARES Act would provide $45.9 billion to DHS. $45 billion will go to the Disaster Relief Fund (DRF) to finance medical responses, acquisition of personal protective equipment, deployment of the National Guard, and other community services across the nation. Additional funds will ensure that money is available for state, local, and tribal governments as they increase field test sites, additional hospital capacity, and National Guard Resources. Find details on DHS appropriations from the Senate Appropriations Committee here.
Federal Emergency Management Agency (FEMA) will receive grant funds to support the critical needs of frontline personnel to total $400 million. $200 million of those funds will go to the Emergency Food and Shelter Program (EFSP), another $100 million will be for providing personal protective equipment and supplies to firefighters and first responders as they assist their communities. The last $100 million will be for Emergency Management Performance Grants that focus on emergency preparedness.
FEMA will also receive $45 million to expand information technology and communication capabilities to better facilitate response coordination efforts. The package includes $9 million to the Cybersecurity and Infrastructure Security Agency (CISA) for supply chain and information analysis. CISA could also use the funding for impacted critical infrastructure coordination. The bill will provide $100 million for enhanced sanitation at airport security checkpoints for the Transportation Security Administration (TSA).
Notably absent from delineated CARES Act funding are funds for Immigration & Customs Enforcement (ICE) to address and manage its coronavirus response for individuals held in detention centers across the country.
The CARES Act will provide $2 billion to assist Native communities and tribal governments as they respond to the coronavirus. $1 billion will go to the Indian Health Service (IHS) to support the tribal health system during the pandemic, including but not limited to increased access to care and medical supplies, and expanded telehealth services. The package will provide $453 million to the Bureau of Indian Affairs (BIA) to support welfare assistance and social service programs, expanded telework and emergency response capabilities, and more. The Bureau of Indian Education (BIE) will receive $69 million, and the Department of the Interior’s Office of the Secretary will get $158.4 million in centralized, flexible resources for the Secretary of the Interior to use to address coronavirus response needs for national parks, wildlife refuges, and other public lands and bureaus.
The Environmental Protection Agency (EPA) will be awarded $7.2 million to support coronavirus-related research efforts, telework infrastructure, cleaning facilities, and other actions related to addressing coronavirus. The Forest Service (FS) will be allocated $70 million across all programs so that the FS may assist in prevention, mitigation, recovery programs, and other costs related to coronavirus. $12.5 million for critical research funding would go to the Agency for Toxic Substance and Disease Registry (ATSDR). Finally, the Smithsonian Institution will receive $7.5 million, the John F. Kennedy Center for the Performing Arts would receive $25 million, and the National Endowment for the Art and Humanities will receive $150 million. Find details on the funding allocated to the DOI from the Senate Appropriations Committee here.
The CARES Act will provide $172.1 billion for additional investments in healthcare, vaccine development, state and local coronavirus response efforts, the procurement of essential medical supplies, education, social service programs, and child care. $900 million will go to the Low Income Home Energy Assistance Program (LIHEAP) to help lower-income households heat and cool their homes. $4.3 billion will go to the Centers for Disease Control and Prevention (CDC), $945 million to the National Institutes of Health (NIH), $275 million to the Health Resources and Services Administration (HRSA), and $200 million to the Centers for Medicare and Medicaid Services (CMS). The Department of Labor will receive $360 million to invest in programs that provide training and supportive services for Americans out of work and ensuring the swift implementation of new Paid Leave and UI benefit programs. Find more on DOL, HHS, and other related agencies from the Senate Appropriations Committee here.
The CARES Act will give $93.1 million to critical funding for the Legislative Branch to go to health, safety, and remote work capabilities. Find details on Legislative Branch treatment from the Senate Appropriations Committee here.
The package will also protect intellectual property rights for coronavirus-affected industries that may not meet deadlines contained in the Copyright Act related to the registration of copyrights and licensing regimes administered by the Copyright office.
The CARES Act will give $19.6 billion to the Department of Veterans Affairs to ensure it has the tests, equipment, and the support needed to provide adequate care to veterans and veteran facilities across the nation. It will provide $15.9 billion to direct medical care, $590 million for vulnerable veterans at increased risk of contracting coronavirus, $3.1 billion for IT support and telemedicine, $2.8 billion for staff treating veterans who reside in Armed Forces Retirement Homes (AFRH), and more. Find details on the VA from the Senate Appropriations Committee here.
The CARES Act will provide $1.1 billion for the Department of State, U.S. Agency for International Development (USAID), and the Peace Corps to support the repatriation of U.S. Government employees and American citizens abroad, including giving additional medical and personal protective equipment and to prevent the increase of humanitarian needs internationally. Additionally, the CARES Act will give the Department of State, USAID, and other agencies the ability to participate in replenishing international financial institutions to support countries with fragile economies impacted by the coronavirus. Find details on The Department of State from the Senate Appropriations Committee here.
The CARES Act will provide $353 million for UASID, including $95 million for operational requirements of USAID, such as support for withdrawals and ordered evacuations for overseas staff, surge support, and increased technical assistance for remote operations, along with additional needs. Additionally, the CARES Act will provide $259 million for USAID to help other countries that are ill-equipped to respond to the coronavirus pandemic. The financial support will be prioritized for groups affected by ongoing humanitarian crises, such as refugees, because of their increased vulnerability, heightened risk of severe illness in camps and informal settlements, and the anticipated disproportionate mortality rates among these populations. Find details on USAID from the Senate Appropriations Committee here.
The CARES Act will allocate $48.5 billion for housing and transportation issues related to the coronavirus crisis. Federal investment in transportation-related issues will center around workforce protections, including workers who may be furloughed. The investment will also address maintaining transportation systems for the public,tribal transportation and housing, and airports and rail lines. Find details on housing and transportation from the Senate Appropriations Committee here.
The housing provisions focus on the homeless population and their vulnerability to coronavirus due to living conditions and funding rent and utility payments. The CARES Act also includes $5 billion in additional spending for Community Development Block.
Airports will receive $10 billion to help mitigate the impacts of the vast decline in air travel and cargo traffic due to the coronavirus. As airports work to advance infrastructure projects that are already in motion, these funds will help bridge the gap.
For Amtrak, $1.1 billion will be made available to support losses in income due to decreased passengers. This funding will also allow Amtrak to fulfill its FAST Act obligations and limit interruptions to service on state-supported routes. The Federal Railroad Administration will also receive $250,000 for safety equipment related to the crisis.
The Community Development Block Grant program’s $5 billion in funding will be allocated to states, cities, and counties to mitigate the housing and economic impacts of the coronavirus. This includes the potential expansion of a variety of different facilities, such as health facilities, food banks, and senior services. In total, $2 billion will be allocated to states, local governments that received funding under the fiscal year 2020 formula, $1 billion will go to states to support a coordinated response across the entitlement and non-entitlement communities, and $2 billion would be allocated to states and local government, cities, and counties based on the level of disruption experienced as a result of coronavirus. Find information on community development block grants from the Senate Appropriations Committee here.
The CARES Act will provide $4 billion in Emergency Solutions Grants to assist rehousing, eviction prevention, and homelessness aid to mitigate the effects of the coronavirus on housing security. $3 billion will be available in rental assistance for low-income taxpayers and almost $2 billion to assist public housing agencies with keeping people in their homes. For elderly and disabled Americans, $65 million is allocated for housing security measures and assistance. Additionally, $300 million will go to the Indian Housing Block Grant program and other measures to prevent potential displacement caused by the coronavirus. Find details on the emergency solutions grants from the Senate Appropriations Committee here.