March 24, 2020
By Troutman Pepper
*as of March 24, 2020
Congress continues to provide public health aid, economic relief, and family assistance to those affected most by the coronavirus (“COVID-19”) pandemic. Included below are some core areas that Congress has addressed in Phase 1 and Phase 2 of the response packages. The CARES Act, or Phase 3, has been proposed by Senate Republicans. Democrats also have published their priorities and await concessions before agreeing to the bill. Negotiations will continue through Monday, March 24, hoping for a final bill in the evening.
PHASE 1 – PUBLIC HEALTH
Phase 1 provided $7.8 billion to federal health agencies (Centers for Disease Control, Food and Drug Administration, National Institute of Health, USAID, Small Business Administration) to help fight COVID-19.
Small Business
- Enabled the SBA to provide about $7 billion in Economic Disaster Loan Assistance to businesses, private nonprofits, homeowners, and renters.
- SBA guidance here.
PHASE 2 – PAID SICK AND PAID FAMILY LEAVE
- Private sector employers with fewer than 500 workers and government entities must provide as many as 12 weeks of partially paid family leave under the Family Medical Leave Act to care for children whose schools or daycares have closed.
- Employers must provide full- and part-time workers with two weeks of paid sick time, including for a quarantine order or to care for another affected individual.
- Department of Labor can exempt small businesses with fewer than 50 workers from paid leave requirements.
- Creates a refundable tax credit for employers to cover costs under the law’s leave programs.
- Includes amounts that employers pay for workers’ health insurance plans and similar refundable credit for self-employed workers.
- Department of Labor guidance here.
Tax Relief – Note: filing deadline for tax returns is being moved to July 15, 2020
- Provides taxpayers affected by the COVID-19 emergency with up to $300 billion in liquidity for the next couple of months.
- Who qualifies? Any individual who owes less than $1 million, or corporation that owes less than $10 million.
- The relief automatically will be provided to taxpayers. No additional forms are required to be filed.
- IRS guidance here.
Nutrition Assistance
- $1.25 billion for various federal nutrition assistance programs such as the Supplemental Nutrition Assistance Program, Women, Infants, and Children, home-delivery for the elderly, and others.
- SNAP guidance here.
PHASE 3 – REPUBLICAN PROPOSED “CARES ACT”
Some measures proposed are highlighted below. Democrats currently are circulating their priorities/drafts for changes to the Phase 3 package. Please let us know if you need help with specific provisions or further details.
Money for Families: One-time tax rebate check of $1,200 per individual and $500 per child. These amounts are not reduced for lower income Americans, but are reduced for higher income earners, starting at $75,000 for individuals, $112,500 for heads of household, and $150,000 for married couples.
Expand Unemployment Benefits: The Senate’s economic relief package provides much-needed support for workers by making a significant investment.
Payroll Tax: Employers would be able to delay the payment of their 2020 payroll taxes until 2021 and 2022, leading to approximately $300 billion of extra cash flow for businesses.
Distressed Business Relief: $425 billion for loans, loan guarantees, and investments in support of facilities established by the Federal Reserve Act under 13(3) authority for the purpose of providing liquidity to businesses, states, or municipalities through purchasing obligations or other interests directly from issuers of such obligations or other interests.
Healthcare Assistance:
- Healthcare investment: The bill contains a significant expansion of telehealth by allowing patients to see doctors with whom they do not already have relationships, connecting folks on home dialysis with providers, and allowing federally qualified health centers and rural health centers to participate.
- COVID-19 treatment: The bill invests in hospitals, physicians and other providers by delaying the sequester, putting money into providers’ pockets fast, and pays more for the treatment of COVID-19 patients.
Small Business Assistance:
- The bill creates a “paycheck protection program” for small employers, self-employed individuals, and “gig economy” workers, with $350 billion to help prevent workers from losing their jobs and small businesses from going under due to economic losses caused by the COVID-19 pandemic.
- For six months, SBA is required to pay all principal, interest and fees on all existing SBA loan products including 7(a), Community Advantage, 504, and Microloan programs.
- Additional $300 billion in loans for small businesses to cover payroll and other expenses.
Airline assistance: $58 billion for passenger and cargo air carriers, via loan and loan guarantees.
Business Provisions: Contains several business provisions, including postponing estimated tax payments, deferred payments of employer share off Social Security tax, relaxation of limits on companies’ use of losses from priors years (net operating losses), and a temporary increase in the amount of interest expenses that businesses are allowed to deduct on their tax returns, among others.
PHASE 4 – WHAT’S NEXT
More action by Congress already is expected and will be necessary for a variety of industries. Please let us know if we can be of assistance.
STRATEGIES AT WORK
TSS is working directly with members of Congress, member and committee staff, the White House, and other federal agencies on several client priorities in the ‘Phase 3’ COVID-19 response package negotiations and future response packages. We are monitoring all response legislation closely. Please do not hesitate to reach out with any client-related questions or concerns.
Troutman Sanders Strategies is a wholly owned subsidiary of Troutman Sanders and specializes in building partnerships between businesses and government at the federal, state and local levels. The diverse backgrounds and bipartisan approach of TSS provide the firm with numerous avenues to best serve the needs of our diverse client base and, since its founding in 2002, TSS has grown from a single office operation into a comprehensive, national issue management firm. Each member of TSS has substantial experience in legislative and regulatory processes and has a broad array of bipartisan relationships at the federal, state and local levels.
Please let us know if we can be of assistance to you, or your clients, in any of these areas. We are here to help with any issues that may arise requiring assistance from the federal government.
