April 22, 2020
Yesterday the U.S. Senate passed the Paycheck Protection Program and Health Care Enhancement Act. The U.S. House is expected to pass it tomorrow.
The third coronavirus aid bill (CARES Act) included $349 billion for the paycheck protection program, which provided forgivable loans for small businesses. This funding ran out on April 16. The new bill would add $310 billion for these loans. Of this new funding, at least $30 billion would be set aside for loans made by banks and credit unions with $10 billion to $50 billion in assets and at least $30 billion more would be set aside for loans made by banks and credit unions with assets of less than $10 billion and community financial institutions. (These set asides are meant to help “underbanked” businesses.)
Other provisions in the new bill include:
- $10 billion for emergency economic injury disaster loan (EIDL) grant funding,
- $50 billion for the disaster loans program account,
- $75 billion to reimburse health care providers for coronavirus-related health expenditures, and
- $25 billion for COVID-19 tests, of which at least $11 billion would go to states, localities, territories, and tribes.
The CARES Act had appropriated $150 billion for states and certain local governments, but the bill specified that the funds must be used for COVID-19-related purposes. The National Governors Association has called for an additional $500 billion and more flexibility to use funds to address revenue shortfalls. Local government groups have asked for $250 billion and more flexibility. The new bill does not include any such new funding for state and local governments. However, Route Fifty reports,
Categories: Budget , Economy.
Senate Minority Leader Chuck Schumer said that while the bill does not include new funding for states, the Trump administration has promised to give state and local government flexibility in how they can spend other federal funding, including $150 billion allotted through the CARES Act.
“We got a commitment from President Trump and [Treasury] Secretary Mnuchin that they will be able to use their state and local money to deal with revenue losses,” Schumer said at a press conference after the Senate vote. This would provide some relief to states and localities, as advocates have complained in recent weeks that the CARES Act funding could only be used to cover coronavirus-related spending.
Tags: COVID-19 , other federal action on COVID-19