CARES Act Is a Break for the Hardest Hit
Congress has passed a bipartisan $2 trillion economic stimulus package, bringing a collective sigh of relief to millions who have faced extreme disruption, including unemployment, remote education, and potential loss of business. As we catch our breath, if only for a moment, we can take a look at what Congress has developed and how the largest stimulus package in U.S. history will be spent on some of our most vulnerable populations and the systems they rely on.
After a week of intense negotiations, Congress and the Trump administration reached agreement on the Coronavirus Aid, Relief, and Economic Security Act (CARES), legislation intended to blunt the impact of the COVID-19 pandemic on America’s families, workers, businesses, and the economy. While two previously passed supplemental appropriations bills addressed immediate health and economic concerns, this package starts to address the continuing fallout that is gripping the country. And it couldn’t come at a better time as 3.3 million Americans filed for unemployment benefits last week.
Low-income students, workers, and families across the nation are grappling with uncertainties brought on by increasing health threats and economic disruptions. K-12 and postsecondary schools are scrambling to transition to online learning and alleviate interruptions in educational pathways. Workers who have lost their jobs are trying to make ends meet. Workforce development systems are switching to virtual service delivery and seeing huge increases in demand for their help. And employers, especially small businesses, are struggling to survive.
We are relieved to see that many of these concerns have been addressed in the CARES Act and the two prior supplementals. But more investment will be needed to help the country make it through this crisis, and we are heartened that Congress will continue to assess the impact on the economy in coming months. Here is a breakdown of the CARES Act and the ways in which it benefits workers, families, students, education systems, and small businesses.
Prioritizes workers and families through emergency assistance programs.
The bill expands unemployment insurance, provides direct cash stimulus for families meeting certain income thresholds, and expands emergency food assistance for individuals in need. Specifically, it includes the following:
- A direct stimulus of $1,200 per adult and $500 per child for individuals making up to $75,000, and $150,000 per couple
- An expansion of unemployment insurance that provides aid for four months and increases the benefit amount by $600 per week
- $15.5 billion in additional funding for the Supplemental Nutrition Assistance Program (SNAP) to ensure all Americans, including seniors and children, receive the food they need
- $3.5 billion for the Child Care Development Block Grant, allowing child care programs to maintain critical operations, including emergency staffing, to ensure that first responders and health care workers have access to child care while they respond to the pandemic
Increases funding for workforce programs to help workers retain or find new employment.
To initially address the needs of displaced workers, the act provides $360 million for the U.S. Department of Labor to provide employment and training services for dislocated workers, seniors, migrant farm workers, and homeless veterans. This funding is also to be used to ensure that new paid leave and unemployment benefits are implemented swiftly and effectively. The $360 million is broken down into two allocations:
- $345 million for the Dislocated Worker National Reserve to be used to provide assistance to states and communities to respond to the needs of dislocated workers and others impacted by the coronavirus
- $15 million for the DOL to implement the paid leave and emergency unemployment insurance stabilization activities to ensure seamless processes
Provides relief assistance to students and the education systems that serve them.
Early childhood, secondary, and postsecondary education systems are dealing with astronomical disruptions to their efforts to educate students. The CARES Act provides $30.7 billion for an Education Stabilization Fund for states, school districts, and higher education institutions to use for expenses related to the coronavirus, including costs incurred in efforts to meet the basic needs of students and develop plans for online learning. These flexible funds include the following allocations:
- $13.5 billion for elementary and secondary schools to use for responses to the coronavirus, including planning for long-term school closures and purchasing educational technology to support online learning
- $3 billion allocated to governors as emergency support grants to local education agencies that have been identified as the most severely impacted by the coronavirus
- $14.2 billion in emergency relief to higher education institutions to defray expenses stemming from lost revenue and technology costs associated with a transition to distance learning, and grants to students for food, housing, course materials, technology, health care, and child care
- Provisions that allow continued federal work-study payments to students, protections to ensure that time out of class won’t count against students’ Pell Grant lifetime limits, and adjustments to subsidized loan usage limits
- Provisions that allow for flexibility around loan repayment for semesters cut short due to the crisis, including cancellation of the portion of a student’s loan for the semester if a student withdrew due to COVID-19
Provides assistance to small businesses to help them sustain operations and employment.
Small businesses are an essential piece of the U.S. economy. To help them avoid closures and loss of revenue, the bill includes the following allocations:
- $366 billion in forgivable loans, with $17 billion set aside for businesses in low-income areas and investment companies that provide venture capital to small businesses
- $10 billion for the Small Business Administration’s Economic Injury Disaster Loans—emergency grants of up to $10,000—to provide immediate relief for small business operating costs
Increases resources to state and local governments for emergency response to COVID-19.
To ensure that our nation’s communities remain afloat during this time of crisis, the act includes the following:
- $150 billion for a state and local coronavirus stabilization relief fund
- $30 billion for a disaster relief fund to provide financial assistance to state, local, tribal, and territorial governments, as well as private nonprofits providing critical and essential services
- A provision that allows state and local taxes to be delayed until June
Those key components, along with the act’s $130 billion investment in the nation’s hospitals, health care systems, and community health centers, demonstrate an impressive commitment to American communities, businesses, workers, and families. JFF is heartened to see policies that are priorities for our organization included in the act, but we believe that more funding will be needed to address the country’s longer-term economic recovery.
Congress has wisely indicated that this will not be the last round of pandemic-related stimulus measures. As future needs are identified, policymakers must make further investment in the nation’s workforce development system. This system is on the front lines, serving millions of Americans in need of employment and training assistance, including the nearly 3.3 million people who have just lost their jobs.
We also urge Congress to pursue policies that change the structure and delivery of education and training and modernize the ways in which we prepare and support our nation’s students, jobseekers, and workers so we can keep up with the rapid skilling and reemployment demands of a post-coronavirus economy. While we hope never to be confronted by another crisis like COVID-19, we must be prepared if we are.