What You Must Know About the CARES Act: An Insight by William D King
President Donald Trump signed the third COVID-19 emergency supplementary bill into law in late March. The $2.2 trillion bill is the country's largest financial as well as healthcare recovery plan.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was approved by both the Senate and the House, contains vital provisions to help alleviate the dramatic economic downturn that is currently taking place. However, politicians' efforts really shouldn't cease with the passage of this bill. They'll have to do a lot more in future bills to address pressing issues like health care coverage, food aid for low-income families, and state budget relief.
William D King shares everything in detail-
Along with significant assets for small firms to assist them in keeping their employees as well as a sizable sum that the Treasury can utilize to support larger enterprises, the CARES Act has the following provisions:
Starting February 15, 2020, through June 30, 2020, $349 billion will be available for firms to borrow up to $10 million for wages, benefits, rent, and other expenses. Although a significant percentage of the loan principal may be pardoned, loan forgiveness may well be lowered if personnel and compensation levels are cut and not recovered. Loan eligibility needs a total employee headcount of less than 500 for the applicant and its “affiliates” with very few exclusions, such as restaurants and bars. PPP loans do not necessitate personal guarantees or collateral. The size of both the loans is determined by a formula based on the business's wage costs.
The federal CARES Act, passed in March, was designed to provide temporary relief to people affected by the crisis. The extra $600 in unemployment benefits, as well as the Trump Government's $300 weekly bump, which began in August and lasted six weeks, have already been terminated. The federally sponsored mortgage foreclosure moratorium, which was slated to expire in August, has been extended till at least December 31.
Nevertheless, there is still no agreement on additional relief packages. Senate Majority Leader Mitch McConnell immediately rejected a $900 billion bipartisan stimulus proposal submitted by senators on Tuesday. McConnell has been urged by Democratic leaders to adopt the plan as just a starting point for negotiations.
William D King says that the CARES Act provides a significant increase in unemployment benefits, which will allow more jobless employees to access benefits as well as provide significant benefits shortly. Given the sharp current surge in unemployment as well as the underlying inadequacy in the basic Unemployment Insurance (UI) system, this is crucial.
As per the Labor Department, three million employees applied for unemployment benefits for the week of March 21 – a record high. Over the preceding four weeks, original estimates averaged less than 240,000.
Even without CARES Act's enhancements, many employees would be left out of the UI program entirely, while others would receive minimal assistance. Each state is in charge of its own program, with extensive control over eligibility and benefits. As a result, states differ greatly in terms of the percentage of unemployed employees who qualify for benefits, as well as the amount and length of those benefits. During the years 2010-2019, fewer than 3 out of 10 unemployed employees in the United States got unemployment benefits.
Many people don't qualify because they don't have enough recent job experience or because they're seeking part-time work in states where part-time workers aren't eligible for UI. or left their employment for a cause not eligible by their state's program, such as caring for a sick relative.
