March 25, 2020 – Stimulus check-up. Are you in?

Jump to the bottom for my gift to you during this period of isolation

Senate Minority Leader Chuck Schumer

This Quick Hit is long because it has to be. Below are high-level details of the three COVID-19 stimulus bills. It is meant to be an easy skim, not a grueling read.

Last Thursday, I shared with clients that $1 Trillion in supplemental funding could quickly become $3 Trillion. Monday with clients, I said this would quickly climb above $10 Trillion. Including loan authorities, we are now above $6 Trillion with more supplemental appropriations coming forward in the next few months. Today, I predict Congress will appropriate closer to $20 Trillion in support before this is over. It is an enormous amount of money; however, the alternatives make it a more logical path.

The delays this week in the third Stimulus Bill have focused on ensuring protections were in place so as not to repeat errors in prior large stimulus packages such as the auto industry bailout and financial system bailout. Much of those funds were not obligated as Congress had originally intended. My assessment is the delay this time was not based on political ideology; it was based on Congress trying to do what it could to get the money to the right place(s).  There are plenty who are not completely satisfied with the stimulus packages – that’s often a sign that middle ground was found.

What Should You Do Now?

    • Comply with applicable CDC standards for health care.
    • To borrow a phrase from Terry O’Brien of Austal USA and the Shipbuilder’s Council of America – “Speak with your outside voice.” If you are serving a federal customer and need something – anything – you must speak up. If you can’t connect to the right people, let me help.
    • When stimulus support program details become clearer, don’t wait to apply for help: loans, grants, etc.

Stimulus Details (very high level)

Stimulus Bill One

The “FY 2020 Coronavirus Preparedness and Response Supplemental Appropriations Act” (H.R. 6074) was signed into law on March 6, 2020 and provides $8.3 billion in funding, including:

    • $61 million for the Food and Drug Administration to combat COVID-19

      Speaker of the House Nancy Pelosi
    • $1 billion in loan authority to the Small Business Administration that may result in up to $7 billion being lent to small businesses
    • $2.2 billion going to the Centers for Disease Control and Prevention, of which $950 million is directed to be spent within 30 days of enactment
    • $3 billion for vaccine research and development and other purposes to a variety of agencies
    • $1 billion to buy pharmaceuticals
    • $435 million for Global Health Response programs
Moreover, the package allows for the waiver of telehealth rules by the Department of Health and Human Services under the Medicare program.

Stimulus Bill Two

The “2nd FY2020 Coronavirus Preparedness and Response Supplemental Appropriations Act”
(H.R. 6201) was signed into law on March 18, 2020 and includes these provisions:

    • Paid sick leave for eligible full-time employees at companies with less than 500 workers, federal, state, and local government employees, and some other employees of up to two weeks at up to $511 per day
    • $500 million to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program
    • $400 million for the Emergency Food Assistance Program (TEFAP)

      Senate Majority Leader Mitch McConnell
    • $100 million for USDA to provide nutrition assistance grants to Puerto Rico, American Samoa, and the Commonwealth of the Northern Mariana Islands
    • $250 million for the Senior Nutrition program in the Administration for Community Living (ACL) program
    • $1 billion for the National Disaster Medical System to provide COVID-19 tests for those without health insurance and a range of provisions under a number of federal health programs to provide for COVID-19 testing
    • $1 billion in emergency grants to states to fund unemployment insurance claims
    • Waivers for nutrition and school lunch programs
    • Suspension of SNAP work requirements during the crisis
    • Tax credit provisions aimed at workers

Stimulus Bill Three

The Coronavirus Economic Stabilization Act of 2020 (As Agreed Upon)
Expected to be signed into law within 48 hours (or sooner)

Late last night, the White House and Senate Minority Leader Chuck Schumer (D-NY) reached agreement on a revised version of the “Coronavirus Economic Stabilization Act of 2020” (CARES Act) and have released bill text for the appropriations portion of the bill. In a summary, the claim was made that “[m]ore than 80% ($274.231 billion) of the total $339.855 billion provided in the coronavirus emergency supplemental appropriations package goes to state and local governments and communities.” However, the media are reporting that the total price tag of the bill is now $2 trillion. And yet, it is not clear if the House will want to pass the package as is despite some positive comments from Speaker of the House Nancy Pelosi (D-CA) about the compromise package.

Secretary of the Treasury Steven Mnuchin

The CARES Act would provide these levels of funding for the programs:

    • The USDA would receive “$9.5 billion in emergency COVID-19 response funding to support agricultural producers impacted by COVID-19, including producers of specialty crops, producers that supply local food systems, and livestock producers.”
    • USDA child nutrition programs would receive $8.8 billion and Supplemental Nutrition Assistance Program (SNAP) would get $15.51 billion
    • The Department of Commerce’s Economic Development Administration would be appropriated $1.5 billion.
    • The Department of Justice’s Byrne JAG grant program would receive “$850 million to assist state, local, and tribal officers in responding to coronavirus.”
    • $10.6 billion for the Department of Defense, including $1.45 billion for the Defense Working Capital Funds as the Defense Logistics Agency, $1 billion for the Defense Production Act to increase access to materials necessary for national security and pandemic recovery, $1.8 billion for the Defense Health Program’s Medical Care and Medical Countermeasures and $1.6 billion for the Military Healthcare System Direct Care Capacity, $1.5 billion for the National Guard, and $1.1 billion for the Defense Health Program Private Sector Care.
    • The Election Assistance Commission would be funded with an additional $400 million “to provide grants to the States in response to the coronavirus for the 2020 election cycle.”
    • The Small Business Administration (SBA) would receive $562 million for the Disaster Loans Program.
    • The Federal Emergency Management Administration (FEMA)  would be appropriated an additional $45.4 billion
    • The Indian Health Service would receive $1.032 billion.
    • The Department of Labor would get $345 million for a Dislocated Worker National Reserve.
    • The Centers for Disease Control (CDC) and Prevention would receive $4.3 billion.
    • $6.3 billion for the Administration for Children and Families, which includes $3.5 billion for the Child Care and Development Block Grant program, $1 billion for the Community Services Block Grant program, $900 million for the Low Income Home Energy Assistance Program, and $750 million for Head Start.
    • The Administration for Community Living would be appropriated $955 million.
    • The Department of Education would receive $30.5 billion, with $13.5 billion for Elementary and Secondary school programs, $14.25 billion for Higher Education programs, and $3 billion for state flexibility funds
    • $19.5 billion for the Department of Veterans Affairs programs
    • $10 billion for the Federal Aviation Administration’s Airport Improvement Program (AIP) and $1.018 billion for Amtrak
    • The Department of Housing and Urban Development (HUD) would get $17.4 billion overall, with the Community Development Block Grant (CDBG) receiving $5 billion, Homeless Assistance Grants $4 billion, and Tenant-Based Rental Assistance $1.25 billion.

A different part of the bill would provide cash assistance to Americans. As explained by Senate Finance Committee Chair Chuck Grassley (R-IA), “[r]ecovery checks to give Americans needed cash to provide for their families and get through our current health crisis including $1,200 for individuals, $2,400 for married couples and $500 for each child, with no minimum and no phase in.”

A gift for you

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