COVID-19: Federal response update
The latest federal efforts to help with the economic impact of the COVID-19 pandemic.
Earlier this month, Congress and the President passed a $8 billion+ package (Phase 1) which was targeted at helping stop the spread of the virus, including providing funds for medical equipment, CDC emergency funding, and vaccination research. In addition to this, there are other efforts underway at the federal level aimed at helping with the economic impact of the virus.
PHASE 2: Families First Coronavirus Response Act
Congress and the President have passed a $100 billion package called the Families First Coronavirus Response Act. This Act is targeted towards helping workers and small business impacted COVID-19 and includes provisions for:
- Increased flexibility and access to unemployment benefits by waiving some requirements on waiting periods and interpretations of the “able, available and actively looking” test.
- Two weeks paid sick leave for employees of small businesses that must be absent from work to either quarantine themselves or to take care of family members, and up to 12 weeks paid family and medical leave for employees that are complying with requirements to quarantine, are caring for family members, or have to care for children if schools are closed or their daycare is unavailable because of COVID-19. Costs are intended to be covered via fully refundable quarterly federal tax credit equal to 100% of the qualified paid family leave wages paid by the employer. The federal definition of a small business is a firm with 500 employees or less. For the purposes of this legislation, this definition will also include non-profits employers will also be eligible under this Act.
- Funding for food security programs including WIC, SNAP, School Nutrition Programs, and food banks, and also waives some requirements to access these tools.
- Ensuring no cost COVID-19 diagnostic testing for everyone, regardless of insurance status, and provides additional funding for health services programs.
PHASE 3: Economic Stimulus Package
We know the White House is eyeing a stimulus package upwards of $1 trillion dollars, far exceeding that of the response to the Great Recession. Though a framework for this is still being constructed and no legislative language YET exists, a Treasury Department memo outlined specific recommendations for this package:
- Financial assistance to impacted industries
- Secured lending facility for the airline industry, including U.S. passenger and cargo air carriers ($50 billion). Requirements will include continuation of service and limits on increases in executive compensation until repayment of the loans.
- Secured lending or loan guarantees to other COVID-19 impacted industries ($150 billion) Other Severely Distressed Sectors of the U.S. Economy ($150 billion)
- Direct payments to workers for economic injury. Payment amounts would be fixed and tiered based on income level and family size.
- $250 billion to be issued beginning April 6
- $250 billion to be issued beginning May 18
- Small business interruption loans ($300 billion). Loans would be 100% guaranteed by the federal government and could have the following requirements:
- Employers with 500 employees or less
- Loan amounts will be 100% of six weeks of payroll, capped at $1540 per week per employee
- Employees must be maintained on the payroll for eight weeks from the date the loan is disbursed
Senate Democrats are also eyeing a substantial stimulus package (perhaps Phase 4?) but have stated that they want it to focus on expanded unemployment insurance, providing money for schools, public transportation, expanded Medicaid health care, and to halt evictions and foreclosures, among other things.
Small Business Administration Disaster Relief Program
Last week President Trump announced a national state of emergency and signed the Coronavirus Preparedness and Response Supplemental Appropriations Act, which opens-up flexibility for federal agencies to respond to this crisis. We are closely tracking this and sharing updates with members -- read the latest here.