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The CARES Act (S. 3548) or the Coronavirus Aid, Relief, and Economic Security Act was a massive $2.2 trillion bailout bill in response to the coronavirus issue, which was passed by the U.S. Senate on March 26, 2020, by the House following day and then signed into law by President Trump that same afternoon, March 27. The CARES Act will obligate an unprecedented amount of federal money, directed at broad swathes of the entire economy, and grant the Secretary of the Treasury and the various government agencies responsible for implementing it vast discretion. The bill, along with its worker protections and accounting provisions to guard against corporate fraud and abuses, was first introduced by Republican Majority Leader Mitch McConnell.[1] Democrats initially voted against relief for the American people straining under a national emergency and shutdown due to the Wuhan coronavirus, but after money for museums and the arts and other Democrat pet projects were added, the bill passed both houses of Congress unanimously under President Trump's urging.

Direct Aid to Individuals and Families

Every individual in America will receive $1,200 if they make $75,000 or less.[2] It would be $2,400 for a married couple. In addition to that there's $500 for every minor child. Average family of four will receive $3400. If they make between $75,000 and $99,000 they'll get less, and at $99,000 it phases out for an individual. Double that for a married couple.[3]

Freelancers, 1099 workers, and gig workers also included. Anyone with a social security number who was not dependent on someone else is eligible. Those receiving a social security retirement benefit, a social security disability benefit, or Supplemental Security income will receive a payment. These are going to be made by the IRS with direct deposit.

Enhanced unemployment benefits are also available. Average worker will receive 100% of their regular salary up to four months.

Congress is allowing people to take up to $100,000 from their 401ks penalty free.

No garnishments, accrued interest, or payments on student loans as of now through September 30, 2020.[4]

Small Business Provisions

Small Business Loans

The CARES Act provides $300 billion for loans to businesses of 500 or fewer employees, through existing SBA-certified lenders like banks and credit unions. The amount to each applicant is based on such factors as the applicant's average monthly payroll; mortgage, rent, utility payments, and existing debt obligations, up to $10 million. Businesses which keep their employees and payroll levels between March 1 and June 30 can use any part of the loan to cover payroll and related payments and have that portion of the loan forgiven.

Loan Guaranty Program

To provide immediate access to capital for affected small businesses, the CARES Act expands allowable uses for the 7(a) Small Business Administration loan program which provide borrowers with revolving lines of credit for working capital purposes to include payroll support, supply chain disruptions, mortgage payments, and other debt obligations. It also increases the maximum loan amount for SBA Express loans from $350,000 to $1 million.

Entrepreneurial Assistance

The CARES Act provides grants for counseling, training, and related assistance to small businesses affected by COVID-19: $240 million for SBA Small Business Development Centers and Women's Business Centers, $10 million for Minority Business Development Agency's Minority Business Centers and $25 million for grants to associations representing resource partners. 

Health Provisions

Direct Funding to Hospitals and Health Care Providers

The CARES Act earmarks a massive $130 billion for hospitals and another $150 billion for state and local governments, with a portion going to healthcare support and recovery.

Funds and Regulatory Relief to Expand Access to Needed Drugs and Supplies, Broadened Coverage, and Other Public Health Measures

The CARES Act address three major areas: (1) Funding for hospitals and for the government to purchase a range of items, such as pharmaceuticals and supplies; (2) regulatory changes such as expanding health coverage for COVID-19 testing and expanding requirements to counter drug and medical device shortages and (3) provisions for private-public partnership such as the launching of a massive blood donation public awareness campaign organized by HHS with the support of the private sector. The recipients of funding will include U.S. HHS and its sub-agencies in all 50 states and territories.


The types of organizations that will benefit are hospitals, community health centers, public health offices and a range of companies that will help them effectively serve their patients and stakeholders. Those federal and state organizations will need to purchase products from medical supply and device companies, biopharmaceutical companies and support services (such as IT firms and staffing agencies) that will all help to support the federal and state agencies better respond to this crisis

Support to Distressed Businesses and the Markets

Loans, Guarantees, and Investments

The legislation provides $500 billion for businesses, states and municipalities impacted by the crisis in the form of loans, loan guarantees and investments. Of this amount, $50 billion is designated for commercial airlines, $8 billion for air cargo carriers, and $17 billion for “businesses critical to maintaining national security” (which are not otherwise defined). The remaining $425 billion is available for other United States businesses, including through programs and facilities established by the Board of Governors of Federal Reserve to provide liquidity.     

Treasury Authority to Make the Big Decisions on Who Gets Funded

The Secretary of the Treasury has primary responsibility for administering these funds, and the bill provides broad discretion in determining who receives them.  To be eligible, a borrower must only have incurred losses (or expected losses) jeopardizing the continued operations of the business, and not otherwise be reasonably able to obtain credit. The Treasury Secretary is required to publish procedures for applying for these funds, including minimum requirements, within 10 days.

Protecting Taxpayer Interests

The legislation contains a few basic provisions to protect the taxpayers against corporate bailouts leading to waste, fraud and abuse. This includes requiring that the loans (i) be provided at rates that reflect the government's risk, (ii) are adequately collateralized, and (iii) will not be reduced or forgiven. It also prohibits use of these funds for stock buybacks or excessive executive compensation, but provides the Secretary of the Treasury broad authorities to determine how these limits would work in practice.

Tax Provisions

Business Provisions

The CARES Act allows employers and self-employed individuals to defer payment of the employer share of the Social Security tax over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022. It would allow net operating losses from 2018, 2019 and 2020 to be carried back five years and remove the taxable income limitation to allow such losses to fully offset income. It would also allow businesses immediately to write off costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of a building.

Pro-Life Provisions

The bill disqualifies Planned Parenthood from receiving aid, ensuring that health care spending in the bill is covered by Hyde Amendment protections, and extending the Sexual Risk Avoidance Education Program — a program that teaches abstinence until marriage.[5]

Democrat Alternatives

See also: Green New Deal and Democratic Socialism

Democrats attempted to stop the Coronavirus Rescue package from becoming law,[6] denying Americans relief from unemployment due to the nationwide shutdown caused by the coronavirus outbreak.[7] In its place Democrats sought to include Planned Parenthood extermination centers as small businesses to qualify for loans among dozens of other socialist planning measures intended to destroy capitalism and convert America into a Marxist state.[8] Among the provisions was institutionalized ballot harvesting.[9]

Rep. Jerrold Nadler demanded $4 Billion (with a "B") for the arts and museums.[10] After receiving $25 million (0.0625% of $4 Billion) from the CARES Act, the John F. Kennedy Center for the Performing Arts in Washington, D.C. notified nearly 100 musicians with the National Symphony Orchestra that they won't receive paychecks after April 3, 2020.[11]

See also