Forget big talk, big numbers, big politics. What exactly does the “2.2 trillion dollar” rescue bill do? How can we get access to needed relief? When will it arrive, helping pay bills? Here are solid answers, what matters most. This bill puts wind in our sails, but in the end – recovery will be on us.
Yes, the bill contains big money for “frontline health care” workers and equipment, test kits, masks, gloves, respirators, ventilators, and regular mentions veteran homes, hospitals, disaster relief funds for states and locals. What may matter as much is the aid offered to individuals and small businesses.
Having read every title, section and subsection, key things stand out. Once Congress “appropriates” money, it must be “apportioned” by OMB to departments, down to agencies, assistant secretaries, program managers, and procurement officers to let contracts. That takes time.
Good news is this law will accelerate “real-time research” on a vaccine – DOD already has six trials up, civilian agencies more. Government is working hand-in-glove with companies. It also supports “domestic manufacturing of biopharmaceuticals,” disinfectants, quarantine services, supercomputers, laboratories, and telehealth. It helps military service members, transit systems, food banks, educational institutions, farmers, and homeless shelters.
That said, rubber meets the road with individuals and small businesses, which employ 80 percent of America. Consumers and small employers drive the economy. That is why relief to them – is critical.
The “CARES” Act – clever acronym for “Coronavirus Aid, and Economic Security Act” – starts here: Many individuals will “within three weeks,” according to Treasury, receive a check “in their bank account.” Adults who earn less than $75,000 should get a $1200 payment, joint filers less than $150,000 should get $2400, with gradual reductions up to $99,000 for individuals and $198,000 for joint filers.
Provisos: Adults need no regular income and can be SSI beneficiaries. They must have a social security number, so no illegal aliens. If eligible, checks should arrive by end of month. (Title II, Section 2201).
On retirement accounts, the law waives “10 percent early withdrawal penalty” for “distributions up to $100,000 from qualified retirement accounts” after January 1, 2020 – so is retroactive. The waiver requires only a corona-related “adverse financial consequence,” for example quarantine, layoff, childcare costs or reduced hours. (Section 2200). In short, if you need money –– odds are with you.
In a nod to AMAC, the law offers “temporary relief of required minimum distribution rules” for various “contribution plans and IRAs” during 2020, in effect allowing seniors to avoid forced sales that forfeit savings in a down market. (Section 2300).
Under Section D, health saving accounts (HSAs) with high deductibles can cover “telehealth services” before reaching that deductible. (Section 3701). HSAs also can buy over-the-counter medical products (Section 7202), virus-related home “telecare” (Sections 3703-08), and incentivize telecare by “boosting payments for hospital, physician, nursing home, and home health.” (Section 3709).
For seniors, a “Medicare add-on” for inpatient hospital costs and “post-acute care,” including equipment at home, will be useful. Important is elimination of Medicare Part B “cost-sharing” and “allowing up to 3-month fills and refills of covered Medicare Part D drugs.” (Sections 3710-14).
As coronavirus tests become available, the law assures “uninsured individuals” receive the test “with no added cost-sharing” under state Medicaid programs – same under Medicare Part B. (Sections 3716-17). On the flip side, “hospitals, especially those in rural and frontier areas” get “reliable and stable cash flow” (Section 3719), plus enhancement of Medicare and Medicaid (Sections 3801-3841).
Small measures add up. One allows an added $300 deduction for contributions to “churches and charitable organizations” (Section 2400), others lift “limitations on deductions” for “itemizing” and building a “food inventory” (Section 2205). Providers of credit are encouraged to forebear (Section 4021), while a “foreclosure moratorium,” “forbearance of residential mortgage loan payments” for 90 days, and “moratorium on eviction filings” for 120 days are mandated. (Sections 4022-24).
The law focuses on small employers. SBA loans are available – ask at your local bank – for those with less than 500 employees, forgiveness if employees are not laid off. In Title 4, Sections 4001 et seq., emergency relief of all kinds is offered to businesses large and small. Tens of billions are directed to transportation, banks and specific sectors (Sections 1101-1114, 2301-08, 4001-4114).
Title II, Section C offers “a refundable payroll tax credit for 50 percent of wages paid by employers,” if “operations are fully or partially suspended” – think restaurants, retailers, manufacturers, services – or “gross receipts declined by more than 50 percent” compared to same quarter last year. (Section 2301)
Provisions allow “delay of payment of employer payroll taxes” and “modifications for net operating losses,” relaxing limitations on a small company “losses.” Importantly, deductions apply to “pass-through businesses and sole proprietors” – allowing them to recoup losses for keeping people employed.
Other tax modifications include tax-based increases in liquidity, write-offs, suspended depreciation timetables, and tax-free sanitizer expenses – for small businesses. (Sections 2302-2308). Emphasis is also placed on telehealth, rural access, reducing liability and increasing flexibility for healthcare workers.
Odds and ends: Federal nutrition requirements are waived for seniors expanding their food options, while HHS can “extend older adults’ participation in community service projects … to facilitate their continued employment.” (Section 3223). In this way, seniors won modest accommodations.
Students get special assistance. Colleges can offer more financial aid, with federal backing. “Matching requirements” are waived (Section 3503), “SEOG funds” boosted. “Federal work-study” payments can be made if students are unable to work (Section 3505). At the same time, grant limits are raised, and – with foresight – academic performance decoupled from grant eligibility for one term. (Sections 3506-08).
Looking ahead, small employers are relieved of burdens, as unemployment insurance ramps up. Unemployment insurance is expanded to covers “gig” and contract workers. In short, this bill is an adrenalin boost for consumers, workers, small businesses, students, and hard-hit sectors, plus those battling the virus on the front lines. The goal: Get us over the hump, as fast and efficiently as possible.
Does the bill assure our economy “roars back?” No, that is on us. Average Americans must dig in, work hard, help each other get up, get by, and get on with being what we are – resilient. Big talk, numbers and politics are not where rubber meets the road. We meet the road – make our future – as individuals, families, small businesses, and never-say-never Americans. The bill is a nice gust, but the rudder ours.