What Does the Latest Coronavirus Relief Package Cover?
THIRD SPENDING PACKAGE: Last week, Congress passed a $2 trillion bill to provide economic relief in response to the coronavirus pandemic. The Coronavirus Aid, Relief and Economic Security (CARES) Act was the third emergency coronavirus spending package. The first package — the Coronavirus Preparedness and Response Act — provided $8.3 billion for healthcare agencies. The second package — the Families First Coronavirus Response Act — contained $100 billion for free coronavirus testing, paid leave, Medicaid funding, and food assistance. Throughout this legislative process, the NAACP has urged Congress to pass measures to provide support and relief which would benefit African-American communities experiencing the brunt of the crisis and its economic fallout. Many of the provisions in the CARES Act are specifically geared toward helping workers and families.
ONE-TIME DIRECT CASH PAYMENT TO INDIVIDUALS: Persons earning up to $75,000 annually will receive $1,200. Couples earning up to $150,000 will receive $2,400. Payment will increase by $500 for each child. For those earning more, payments will be decreased by $5 for every $100 of income over these amounts and will be capped at $99,000 for individuals and $198,000 for couples. Income is determined based on the 2019 tax return; if the 2019 tax return was not filed, then income will be based on the 2018 return. Persons with bank accounts on record with IRS or who receive Social Security benefits will receive payment in the same manner; all others will receive checks by mail to the address on their last tax return, with a 15-day notice that the check is coming. Payments could take longer than one month to arrive.
EXPANDS UNEMPLOYMENT BENEFITS: The CARES Act increased the amount of benefits available for jobless Americans. Individuals who have lost their jobs will receive an additional $600 per week on top what they would receive under state law, for up to four months until July 31. The package also extended the time for receiving benefits. Individuals can receive benefits for an additional 13 weeks, on top of 26 weeks of assistance provided by most states. Finally, workers not previously eligible for assistance are now able to receive benefits. Individuals now eligible for unemployment include self-employed persons, gig workers, independent contractors, freelancers, part-time workers, furloughed employees, individuals who can no longer physically go to their jobs (such as staff of restaurants which have closed), and persons who recently started a job but were laid off. Expanded benefits will last through December 2020.
SUPPORT FOR SMALL BUSINESSES: The CARES Act provides support to small businesses encountering difficulty covering payroll and operating expenses. Under the Paycheck Protection Program, companies with fewer than 500 employees are eligible for small-business loans up to $10 million to allow companies to continue paying employees, costs associated with health care benefits, mortgage interest, rent, and utilities. If the employer maintains the payroll through the end of June, the loans could be forgiven. The CARES Act contains $10 billion for grants up to $10,000 to small businesses for emergency funds to cover immediate operating costs. It also includes $17 billion for the Small Business Administration to cover six months of payments for businesses with existing loans.
RELIEF FOR HOMEOWNERS AND RENTERS: The CARES Act provides mortgage relief to homeowners with federally-owned mortgages or those backed by a federal agency such as the U.S. Department of Housing and Urban Development, U.S. Department of Agriculture, U.S. Department of Veterans Affairs, Federal Housing Administration, Fannie Mae, or Freddie Mac. Individuals facing financial hardship as a result of coronavirus can ask their loan servicer to pause or suspend their mortgage payments under federally-guaranteed loans for a period of time up to one year. The CARES Act also imposes a moratorium on foreclosure of federally-guaranteed mortgages until May 17, 2020. The CARES Act provides eviction relief for some but not all renters. Landlords of properties with federally-guaranteed loans or who participate in federal housing programs such as Section 8 are prohibited from evicting tenants until July 26, 2020, and they cannot charge fees for unpaid rent until that time. The CARES Act also dedicates $4 billion to state and local governments to help the homeless population through the coronavirus crisis. It provides $3 billion to ensure that millions of individuals receiving federal rental assistance continue to have access to decent, stable housing.
EDUCATION FUNDING: The CARES Act included relief for college students and graduates with outstanding federal student debt. All federal student loan and interest payments are suspended through September 30 without penalty. Students who drop out of college will not be penalized by deductions on lifetime limits on loans or eligibility. Students who were unable to complete work-study programs may still be able to receive payment. Billions in additional funding under the CARES Act will help elementary and secondary schools respond to immediate needs relating to coronavirus, navigate school closures, support education technology, and promote distance learning. It will also assist higher education institutions, including HBCUs, in meeting immediate needs in responding to coronavirus, including school closures, and supporting the students themselves.
HEALTH CARE ENHANCEMENTS: The second stimulus package passed by Congress required health insurers to cover the coronavirus diagnostic test at no cost to individuals. This means individuals are not responsible for deductibles or co-pays for the test or the visit associated with receiving the test. The CARES Act expands this requirement to cover non-FDA approved testing such as emergency testing, testing by state laboratories, and any other testing approved by the U.S. Department of Health and Human Services. It also requires private insurance plans to cover coronavirus vaccines, when they become available. The CARES Act directs billions to hospitals and health care providers and funds medicine, research, increased workforce and training, and personal protective equipment for doctors and nurses.
FLEXIBLE USE OF RETIREMENT FUNDS: The Cares Act waives the 10% early withdrawal penalty for distributions up to $100,000 for coronavirus-related purposes. This is retroactive to January 1, 2020. Taxes on withdrawals are spread over three years or the individual has three years to roll the funds back into a retirement account. The limit on loans from 401(k) accounts is increased from $50,000 to $100,00.
EXTENDS TAX-FILING DEADLINE: The CARES Act extends the tax deadline to July 15, 2020 for individuals to file their 2019 tax returns, instead of April 15.
FOOD ASSISTANCE: The Cares Act provides $8.8 billion to allow schools more flexibility in providing meals for students. It directs $15.5 billion to the Supplemental Nutrition Assistance Program (SNAP) to covert new applications for coverage and $450 million for food banks and other community food distribution programs.
SUPPORTING DEMOCRACY: In response to urgent calls by the NAACP and others to protect the safety of voters and poll workers during the remaining primaries and the general election in November, Congress appropriated $400 million in election assistance for states, although several billions were requested. The funding will help states to ensure elections are administered in a safe and accessible manner by increasing vote-by-mail opportunities, expanding early voting and on-line registration, and providing additional equipment, staffing and training. The money will be distributed to states through the Election Assistance Commission. States will be required to report on how they plan to spend the money "to prevent, prepare for, and respond to coronavirus."
AID TO STATE AND LOCAL GOVERNMENTS, TERRITORIES & TRIBES: The CARES Act designates $340 billion for programs to support state and local governments, territories and tribes. This includes $150 billion in a new Coronavirus Relief Fund to provide direct aid to meet virus-related costs.
CORPORATE BAILOUT: The CARES Act directs a massive infusion of $500 billion in loans and other money to big corporations, including airlines. These companies must repay the government and will be subject to disclosure and accountability. A special inspector general and Congressional committee will oversee all loans and other uses of taxpayer dollars.
FOURTH CORONAVIRUS RELIEF PACKAGE UNDERWAY: Congress must immediately provide much more relief to all Americans impacted by the coronavirus crisis. The NAACP is already at work to urge Congress to act quickly and to ensure that the next relief package is equitable and fair. The new legislation must provide needed assistance to under-represented and marginalized communities which are now bearing the brunt of the coronavirus crisis. We are requesting that the new legislation include additional and larger direct payments of cash to individuals, expanded health care benefits, more unemployment protection, expanded family and medical leave, more food and housing assistance, more relief for workers and small businesses, and $4 billion in funding to protect the safety and accessibility of our elections.
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