COVID-19 has fundamentally transformed our lives, our work, and our world. However, amidst the most adverse situations, huge financing packages have been set in motion on a worldwide scale. One such economic stimulus package came from the United States in response to the global coronavirus pandemic. In this article, we delve deeper into the COVID-19 distributions under the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020.
Unveiling the CARES Act
The CARES Act, a $2.2 trillion economic stimulus plan, was signed into law by former President Donald Trump on March 27th, 2020. It is the largest relief bill in U.S. history.
Key Provisions of the CARES Act
The CARES Act was designed to aid unemployed individuals, businesses (both small and large), state and local governments, and public health agencies. It emphasized the following areas:
- Recovery checks for individuals and families
- Unemployment insurance provisions
- Healthcare sector relief
- Assistance for small businesses.
Distributions Under the CARES Act
Let’s take a detailed look at how the massive federal funding under the CARES Act was distributed across various sectors in 2020.
Individual Aid
Recovery Rebate Checks: The prominent feature of the CARES Act was the direct cash handouts to individuals and families, in the form of Economic Impact Payments or Stimulus Checks:
- Single adults with an adjusted gross income of $75,000 or less were eligible to receive the full payment of $1,200.
- Married couples with combined income up to $150,000 were eligible to receive $2,400
These payments phased out at higher income levels.
Unemployment Insurance Provisions
One of the most important provisions under the CARES Act was the Pandemic Unemployment Assistance. This program expanded the unemployment benefits to workers who traditionally wouldn’t be eligible, like freelancers or independent contractors.
Small Businesses and Corporations
$349 billion was allocated for small businesses under the Paycheck Protection Program to help them maintain their workforce.
On the other hand, approximately $500 billion was set aside for aiding larger corporations, with emphasis on airline companies and businesses critical to national security.
Public Health and State Local Governments
Public health agencies and hospitals were allocated around $150 billion to deal with the surge in patients.
Further, $150 billion went towards state and local governments that were dealing with increases in costs associated with the pandemic.
The Impact of the CARES Act Distribution
While the CARES Act was indeed a monumental step towards helping the U.S economy, the impacts of the distributions on various sectors were noticeably distinct.
Spurring Economical Revival Through Individual Aid
As a result of the direct payments and unemployment insurance provisions, many families were able to stay afloat financially during this tough phase. This led to a decrease in poverty rates during the height of the crisis, which is an interesting case of successfully implemented aid.
Keeping Small Businesses Afloat
The Paycheck Protection Program served as a lifeline for many struggling small businesses, helping them keep their employees on the payroll. However, there were criticisms surrounding the transparency and the recipients of these loans.
Healthcare and the Public Sector
While the funds did alleviate some difficulties faced by health agencies and local governments, many believe that the funding was insufficient and more financial support was needed.
In Conclusion
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, a colossal attempt to cushion the economic blow from the pandemic, brought some relief during a globally taxing time. To date, it remains an essential case study for understanding economic stimulus, public finance, and pandemic-related policymaking.
It is crucial for us, as citizens, to understand these stimulus packages to ensure transparency, voice our opinions, and create informed discussions around public finance and policy. Do you believe the CARES Act was successful in accomplishing its purpose? Your perspective matters!
