Senate Passes Phase III of COVID-19 Response

March 26, 2020

Late Wednesday night (3/25), the U.S. Senate passed the CARES Act. The estimated $2 trillion package is phase III in the Federal Government’s response to COVID-19 pandemic and economic crisis. The Senate vote was 96-0 in favor of the bipartisan bill.

The U.S. House of Representatives is expected take up the bill on Friday (3/27) and House Speaker Pelosi has predicted a strong, bipartisan vote to approve. A voice vote (rather than roll call vote) is expected in the House. The White House has also committed to promptly sign into law.

It is easiest to understand the CARES Act in three big chunks:

  1. Business Loans and Tax Credits
  2. Direct Relief to Individuals
  3. Supplemental Funding to Government Response Efforts (including State/Local Governments)

Business Loans and Tax Credits:

  • $500 billion in emergency loans, loan guarantees and bond purchases, administered by the Federal Reserve, to support eligible businesses, as well as state and municipal governments.

$25 billion specifically to loans for air carriers

  • $349 billion small business lending program, modeled on existing SBA 7(a) program, with 100% government guarantee on partially forgivable loans.

All financial institutions can provide these SBA loans.
Dive deeper into SBA lending

  • Employee retention credit for employers subject to closure due to COVID-19 provides 50% tax credit applicable to the employer’s share of payroll taxes on wages up to $10,000 per employee
  • Delay of payment of employer payroll taxes (defer payment of the employer share of the Social Security tax due between now and January 1, 2021 to December 31, 2021.

Direct Relief to Individuals

  • $1,200 tax rebates to individuals, with additional $500 payments per qualifying child. The rebate begins phasing out when incomes exceed $75,000 (or $150,000 for joint filers)

Stimulus check calculator from Kiplinger

  • Extend unemployment insurance by 13 weeks, including an additional $600 per worker per week benefit enhancement for a four-month period through July 31, 2020.

One week waiting period for unemployment insurance benefits is waived
100% of cost for supplemental benefits covered by the Federal government

  • Federally backed mortgage loans may request forbearance on the Federally backed mortgage loan for 2 months with allowable extensions of 30 days up to 4 months.
  • Deferred student loan payments thought September 30, 2020 without borrower penalty

Supplemental Funding to Government Response Efforts (including State/Local):

  • $340 billion in new federal spending for Fiscal Year 2020 – much of which will flow to state/municipal governments and local communities. It includes:

$4.3 billion for the Centers for Disease Control (CDC) which includes direct funding to state/local public health responders and preparedness grants
$945.5 million for the National Institute of Health (NIH) for vaccine and treatment research
$19.6 billion for the Department of Veterans Affairs (VA) for medical services and facilities

  • $150 billion to states and local government based on each state’s population for the purpose of funding unforeseen expenses related to COVID-19.

There is a lot more in this 900 plus page bill.

The full text can be found at:

Click here for a detailed summary complied by the U.S. Chamber of Commerce.

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Government Relations

SBA Lending in new CARES Act