In response to COVID-19 and its devastating and prolonged effects on public health and the economy, federal lawmakers passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This stimulus package is the largest ever passed in US history and is meant to offer quick and critical relief directly to Americans, their families, hospitals, and state and local governments.

Stimulus Checks

One of the most-anticipated elements of the CARES Act is the inclusion of stimulus checks, or direct payments that will be sent to many American households. These stimulus checks are, as of now, one-time payments that will help people pay their bills and meet their basic needs while also providing a burst of cash that may help keep the economy afloat.

The facts:

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  • Most Americans will receive $1200 stimulus payments, in the form of a mailed check or direct deposit. An additional $500 will be given for each child 16 and under.
    • Full payment of $1200 available to individuals making $75k or less a year; for families $150k or less a year. 
    • The amount of the stimulus check will be reduced by $5 for every $100 you make over $75k. Then, any individual making over $99k will not receive anything. The income thresholds are doubled for married couples.
  • This bill uses the same definition of “child” as the Child Tax Credit, so families that include a 17 year old child or a college student will not receive an extra $500. Even if the child or individual in question is a dependent, they won’t get the $500. 
    • If a college student is able to file as a non-dependent (only claiming themselves, with no one claiming them), they will be eligible for the $1200 check. 

Read our FAQ fact sheet on stimulus check payments here.

Areas of concern:

  • This is a one-time payment. There is nothing promised for the future, regardless of how long the pandemic lasts.
  • People who file taxes with an Individual Tax Identification Number (ITIN), who are often immigrants, are not eligible for a stimulus check. For a household to be eligible, everyone at home must have a SSN, preventing families with citizen children and immigrant parents from receiving a check.
  • Since tax returns are the basis of eligibility determination, many very low-income people (who never had to file a tax return) may receive nothing unless they file taxes. It is crucial that households who haven’t filed their 2019 or 2018 taxes do so ASAP in order to receive their stimulus check.

Unemployment Benefits

Even in just the first month of the pandemic in the US, the shuttering of restaurants, shops, event centers, schools, and businesses has left almost 10 million Americans out of work. Here in Washington State, unemployment claims broke state records– two weeks in a row. The CARES Act provides a much-needed boost to the nation’s unemployment benefits and extends eligibility to recognize many workers and situations that previously didn’t qualify.

The facts:

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  • CARES Act legislation does two major things: a) it provides a much-needed boost and extension to the nation’s Unemployment Income (UI) system and b) it creates the Pandemic Unemployment Assistance (PUA) program, which will temporarily extend UI benefits to workers who aren’t ordinarily eligible for unemployment benefits.
    • Gig workers, self-employed workers, independent contractors, and part-time workers are all now eligible for unemployment assistance through PUA.
  • All unemployment benefits (UI or PUA) will see a $600 per week, federally funded benefit increase through July 31. This means that if you are unemployed, you will get your state unemployment benefit PLUS an extra $600.
  • The time limit for UI benefits are extended. For those eligible for regular UI, the bill allows states to provide an additional 13 weeks of federally funded extended benefits; workers who exhaust those benefits can receive PUA benefits, but only as long as that program is in place.

Read our fact sheet on unemployment benefits here.

Areas of concern:

  • Again, undocumented people are not eligible for any of these benefits. 
  • New entrants to the work force who cannot find jobs are also ineligible. 
  • This is a temporary benefit that goes until the end of the year (or until July 31 in the case of the benefit increase) and doesn’t automatically continue if the economic conditions warrant. 
  • The additional $600 benefit counts as income when determining eligibility for means-tested programs, except for Medicaid (call Apple Health in WA) and the Children’s Health Insurance Program (called Apple Health for Kids in WA).

Student Loans

The CARES Act offers relief to student loan borrowers, ensuring that many will not have to worry about paying their loans during a time of crisis.

The facts:

  • Suspends payments and interest accrual until September 30 for all student loans held by the federal government, retroactive to March 13. 
  • Borrowers enrolled in the Public Service Loan Forgiveness program will also have these 6 months count towards forgiveness just as if they were making payments normally.
  • Private loans (loans taken out from a servicer who isn’t the federal government) aren’t eligible. 

Emergency Aid

Americans need increased health, housing, nutrition, and other basic needs services as they weather this pandemic. The CARES Act includes several emergency aid packages to help state governments and health systems provide the essential and necessary support.

  • Relief for small businesses: $350 billion will got toward emergency grants and forgivable loans to small businesses and non-profits. This includes $10B that will be used for immediate grants of up to $10k that will provide immediate relief for small businesses and non-profits.  
  • Emergency aid for local governments: The CARES Act will create a $150 billion state, local, and tribal government relief fund. WA will receive about $3 billion that will help us pay for expenses related to the virus. Our state will also receive an additional $600 million for health care services for the remainder of 2020. 
  • Support for hospitals: $150 billion will be funneled towards the nation’s hospitals & health care systems.This funding also helps increases amount of personal protective equipment in the National Strategic Stockpile. $100 billion will be sent directly to hospitals across the country. 
  • Housing support: The bill dedicates $4 billion toward helping people experiencing or at risk of homelessness. These funds can be used for essential services such as increased shelter capacity, reconfiguration of shelter space to adhere to physical distancing guidelines, delivery of medical care to people who acquire the virus or may be at higher risk, and providing short-term rental or utility payment assistance so that people who have lost jobs or income don’t also lose their housing or access to public services like electricity and water.

Analysis

The CARES Act is a good first step. It strikes a good balance in funding essential systems and services throughout the country, and in providing relief directly to Americans. The combination of direct relief (through stimulus checks, extended and enhanced unemployment benefits, and student loan relief) plus the emergency funding of critical care and aid systems will support Americans and their health, finances, and wellbeing.

However, lawmakers can– and must– do more. The CARES Act does not protect or provide relief for undocumented people and their families. It provides only one-time stimulus payments, and most of the relief programs are set to last only a few months. It lacks any provisions to expand health coverage or pay for COVID-19-related treatment for the uninsured. It also doesn’t include a SNAP (food stamps) benefit increase, which is needed to help families afford food — and to boost overall consumer spending — while the economy remains weak.

The bill could also further be strengthened by the addition of an emergency fund, such as one modeled after the successful TANF Emergency Fund set in place during the Great Recession. Such a fund could quickly provide both families with children and others with cash assistance to meet their basic needs, and could also provide funding to states to set up subsidized jobs programs after the health crisis diminishes and such programs can be undertaken safely. The CARES Act cannot serve as Congress’ primary response to the pandemic. Subsequent bills that extend and broaden economic relief provisions must follow.

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