As we all know, the year 2020 was a major backward year for all of us, in many ways. The COVID-19 pandemic struck us hard at the roots and millions of people all over the world lost their means of livelihood and access to healthcare became a tool of the privileged. However, in March 2020, US lawmakers voted to pass the CARES (Coronavirus Aid, Relief, and Economic Security) Act, a $2 trillion relief bill designed to mitigate the effects of an economic slowdown triggered by the global coronavirus pandemic.
President Trump signed the CARES act into law on March 27, 2020. With most analysts forecasting that the US nation was either in or about to enter a recession at the moment, lawmakers drafted laws that set aside historic government funds to help large and small enterprises, companies, individuals, households, gig jobs, contract employees, and clinics.
What Are The Main Takeaways Of The CARES Act?
- Small business is getting a loan and grant scheme worth $367 billion money from the government
- Unemployment payments are being expanded to cover employees who have been furloughed, gig jobs, and freelancers, with benefits being raised by $600 a week over a four-month term.
- For households earning up to $75,000, direct grants of $1,200 per adult and $500 per child are made to families.
- More than $130 billion has been allocated by the CARES act to hospitals, healthcare services, and suppliers.
- $25 billion in cash incentives and also loans for airlines, $4 billion for air cargo carriers, and $3 billion in payroll funding for airline contractors as a COVID relief package.
- Stock buyouts are prohibited by major corporations seeking federal grants for the duration of their aid, plus $150 billion was allocated by the CARES act to state and local governments for one year.
- Both federally insured home loans have had their deferment and default moratoriums extended until 2021, but the exact deadline varies with the mortgage policy.
Some of the grants and small company aid were always up to the Treasury or the Small Business Administration’s discretion, but they came with some stringent requirements, and Congress named an auditor general and an advisory board to monitor and monitor their operation. The legislation set aside $150 billion from the CAREs act for states and localities fighting the pandemic and $130 billion more for the rest of the country.
What Were The Different Kinds Of Programs Under The CARES Act?
The CARES act covered a variety of areas. Some of the programs under the CARES act were:
The Paycheck Protection Program:
The legislation set aside $349 billion to help small companies continue to pay their employees to cover some operating costs during the emergency. During the emergency, the declared priority was to keep employees paying and employed. The Paycheck Protection Program under the CARES act extended to any company, nonprofit agency, veterans group, or tribal business with less than 500 workers; under the Small Business Administration requirement if they had more than 500 employees; or for all foodservice and hospitality companies with less than 500 employees per geographic venue.
A Small Business Interruption Grant may be available to eligible companies. The money from the government will be used to pay for things like insurance, pensions, and wages, as well as tax, lease, and services. There were no fees to pay, and no security or personal commitments were needed. There were no direct debit fees, and payments were postponed by a period of 6 months up to a year.
The loan’s balance under the cares act can be forgiven up to the gross amount of salaries, principal interest rates, rent, service payments, and all extra wages accrued to tipped workers during the eight-week span after beginnings. Under PPP, though, this figure will be decreased by the proportion of every decrease in the total number of workers during that time span.
Economy Injury Disaster Loan Program:
Small companies impacted by COVID-19 were eligible to qualify for a ten thousand dollar loan that did not choose to be paid under the extension of the current Economic Injury Disaster Loan Emergency Advance scheme (EIDL). Many who qualified for EIDL loans were able to borrow up to two hundred thousand dollars without providing a written agreement, under the cares act.
Pandemic Unemployment Insurance Program:
Both the qualifications and compensation rates for unemployment benefits relating to the emergency were extended under the stimulus package. Unemployment payments were applied to those who would be ineligible if their job loss was caused by the COVID-19 disease outbreak. Contractors and the personality, those whose previous benefits had run out, those only looking for part-time work, those with inadequate work experience, and anybody else who might otherwise be ineligible were all included under the cares act.
However, it expressly omitted those who could operate remotely online or who were currently receiving paid family days or other leave benefits. Regular unemployment payments for affected jobs were extended from the standard 26 weeks to up to 39 weeks under the package. It also expanded the provision of unemployment insurance to the first week of unemployment where state legislation did not forbid it.
Besides, it provided funding for a special Federal Pandemic Unemployment Compensation package of six hundred dollars per week, in addition to the existing unemployment benefit, which was maintained. The CARES Act also created the Pandemic Emergency Unemployment Compensation scheme, which enabled employers who had lost their unemployment insurance to receive an additional thirteen weeks of benefits if they could work.
Self-employed people, freelancers, and independent contractors were all covered by the Pandemic Unemployment Assistance.
The stimulus package under the CARES act covered both immediate patient concerns and funding for treatment and prevention after the emergency. Via a variety of services, including Medicare reimbursements, loans, and other direct federal subsidies, the initiative increased payments to healthcare providers and manufacturers by a hundred billion.
It also ordered the federal employers under the CARES act and employees to work together to manage essential medical services including safety devices and drugs to treat the coronavirus stockpiles and supply chains. The CARES act boosted support for healthcare worker training, research, and transformation projects while shielding health professionals from responsibility as they agreed to combat the pandemic across state borders.
It loosened a slew of regulations, Medicare payout guidelines, and prescription clearance conditions to give first responders greater leeway.
State Government Relief Fund Program:
The proposed Coronavirus Relief Fund under CARES act provided up to $150 billion in funding to state and local governments. A total of $3 billion was set aside for federally administered lands, and $8 billion was set aside for tribal governments. Payments to states and local municipalities were proportionally distributed based on population.
There were massive, unrestricted block grants that were to be used for expenses for CARES. Several companies, departments, and special interest groups were lined up to obtain a share of the funding pie, as one would predict with such extreme government spending.
The CARES Act also made legal amendments aimed at benefiting certain sectors or companies in key congressional districts, which did not seem to be related to the COVID-19 crisis at the moment.
The CARES act, therefore, was a big step for providing relief to the ones affected by the COVID-19 pandemic.