Congress Passes $2 Trillion Coronavirus Relief Bill
After several days of tense negotiations between congressional leaders and the Administration, Congress has officially passed S. 3548, The Coronavirus Aid, Relief, and Economic Security (CARES) Act. This unprecedented, $2 trillion bill is nearly 900 pages long and promises to help Vermont’s struggling businesses and overwhelmed healthcare systems recover from this growing crisis. The bill includes a major expansion in unemployment benefits, direct payments to individuals up to $1200, and billions in state government and small business assistance funds.
Detailed below are some of the key highlights of the bill and how they can benefit your businesses and employees as we navigate these uncertain times together.
- Expanded unemployment insurance (UI) for workers, including a $600 per week increase in benefits for up to four months. The bill also extends those benefits to workers who are not normally eligible for UI, including the self-employed and independent contractors. Additionally, the federal government will fund an added 13 weeks of UI benefits through December 31, 2020 once workers have run out of state unemployment benefits.
- $562 million for SBA economic injury disaster loans (EIDLs). Generally, EIDLs provide up to $2 million to cover a businesses operating costs and have a 3.75% interest rate for small businesses and a 2.75% rate for nonprofits.
- $10 billion in Emergency Economic Injury Grants. These grants will provide small businesses and nonprofits applying for SBA’s EIDL program with an advance of $10,000. The money will be provided within three days of applying for the loan, and businesses will not be have to repay said grant, even if they are denied for an EIDL.
- $350 billion for the Paycheck Protection Program. Administered by the Small Business Association and US Department of Treasury, these loans are meant to help small businesses with fewer than 500 employees with payroll support, employee salaries, mortgage payments, rent, utilities, and any other debt obligations incurred between February 15 and June 30. Loans are available up to $10 million per business and may be forgiven, provided employers keep their workers on at their current salary levels through the end of June.
- $17 billion to help businesses with existing SBA loans. The SBA will pay all principal, interest, and fees on all current SBA loans for six months, including 7(a), Community Advantage, 504, and Microloan programs. This does not apply to the new Paycheck Protection Program loans outlined above.
- Exclusion for employer payment of student loans. Similar to legislation VBSR has long been pushing in the Vermont Statehouse, the Act incentivizes businesses to help their workers pay off their student debt by excluding up to $5,250 in student loan repayment made by an employer from income.
- Employee Retention Credits. Refundable payroll tax credits for 50% of wages paid by employers during the COVID-19 crisis to offset the first $10,000 of compensation, including health benefits, paid to an employee. For employers with more than 100 full-time employees, qualified wages are wages paid to employees when they are not providing COVID-19-related services. For employers with 100 or fewer full-time employees, all employee wages qualify for the credit.
What does this mean for Vermont?
Thanks to the strong advocacy from Senator Leahy, Senator Sanders, and Congressman Welch, the CARES Act will bring nearly $2 billion to support the Green Mountain State and its counties in tackling the economic and public health impacts of COVID-19. All told Vermont receive roughly:
- $5.4 million to support public health preparedness and response activities through the Centers for Disease Control;
- $4.7 million in Community Development Block Grant (CDBG) funding to support the expansion of community health facilities, child care centers, food banks, and senior services;
- $5 million in Community Service Block Grants to address the consequences of increasing unemployed and economic disruption;
- $4.3 million in Child Care Development Block Grants to support child care assistance to health care sector employees, emergency responders, sanitation workers and other works deemed essential during the corona virus response;
- $4.6 million for housing assistance grants through the Department of Housing and Urban Development;
- $4.1 million in the Low Income Home Energy Assistance Program (LIHEAP);
- $20 million to support public transportation emergency relief;
- $9.6 million to support the state’s airports;
- $3 million in election assistance grants;
- $2 million to support state and local law enforcement and corrections through the Byrne-Justice Assistance Grant (JAG) program;
- $826,000 through the National Endowment for the Arts and the National Endowment for the Humanities to support museums, libraries and other organizations that have been forced to shut their doors due to the virus;
- $175,000 to support small- and medium-sized manufacturers recover from the economic impacts of COVID-19 through the Manufacturing Extension Partnership program; and
- $862,000 in Emergency Preparedness Grants through the Federal Emergency Management Administration (FEMA).
At a time when businesses are struggling and our communities reeling, the CARES Act offers us a ray of hope and valued lifeline to pull Vermont out of the economic maelstrom that is the COVID-19 pandemic. VBSR will continue to update this page as we analyze this massive bill further.