“CARES” – HOW MUCH
REALLY?
By Mary Coen
The New York Times
May 16 edition has a front-page article “DeVos
Funnels Coronavirus Relief Funds to Favored Private and Religious Schools” –
another (mis)use of CARES funds. Turns out $30 billion of the original fund
went to education (i.e., DeVos), and she wants to give it out to use as
vouchers. Her continued attempt to privatize education and to destroy our public
education system. This is just one way the GOP is hijacking CARES funding.
The bill labelled "CARES", short for Coronavirus Aid
Relief and Economic Security, (got to love those alphabet soups when they can
be made to spell something feel good), known to most of us as the 'stimulus
package' was signed into law on March 27,2020. At the time most of us were
dealing with the results of a great upheaval in our daily lives –
shelter-in-place and weren't very concerned about the details of the bill
except where it affected our bank account. It wasn't until just less than three
weeks later when we learned that the loan money meant for small businesses was
almost gone - and much of it to LARGE businesses, that we perked up our ears
and asked what was going on.
So here is a summary:
The bill allotted $2 trillion for immediate use, $500 million
for corporate loans, $349 million for small business loans, $150 million
for public health needs and $300 million for stimulus checks (you know, the
part you remember). It also enhanced some existing programs such as extending
unemployment benefits and changing tax day to July 15.
So, what has happened with it so far? Most individual checks
have gone out, but not all. (My husband gets benefits through the VA, and we
have been informed that our checks are to be expected on May 20). We can only
hope that all who are in desperate need of money will receive it, but between
glitches and small-print exceptions, not quite all will.
It was the small business money that went astray the fastest: by
April 16 it was nearly out of money and it came to light that the majority
had gone to LARGE businesses. It seems that the culprit was the fact that the
money was given to commercial banks to distribute with the permission to
distribute as they would their own loans. So, they did. To their preferred
customers first.
The loans were intended by law to be very low-interest and with
the potential to have it forgiven under certain circumstances, i.e., retaining
all employees and using it only for wages. Many loan recipients became
intentionally creative in skirting these restrictions, and were called out by
the press. And in fact, many loans were returned. But not all. And even then,
many really small businesses, like Mom-and-Pops, were too late to get a share.
For comparison's sake, note that a "small" business is described as
one with up to 500(!) employees.
Unemployment benefits were extended by about 13 weeks for most
states, with $600 weekly added until July 31. Eligibility was also increased to
include independent contractors, gig workers, free-lancers and furloughed
workers. Rent or mortgage relief can be applied for if you have a
government-backed loan from Fannie Mae, Freddie Mac, VA, FHA, HUD or FDIC and
have lost your job.
You can check with your state or local banks.
On April 24, a second stimulus of $484 billion more was added to
the fund for business aid, and health care.
in order for any of this to happen, good faith negotiation had
to take place between the Democratic-controlled House and the
Republican-controlled Senate. It did. But what got lost in the rush was an
efficient agency of distribution, particularly for the business sector, and an
effective oversight capability. These still need to be addressed. As I write
this a third stimulus package is about to be voted on in the House, a bill
totaling $3 trillion. Unemployment benefits alone will need a great influx of
additional money, and there is talk of a second round of personal checks.
However, watch out for the guy with the pen - he is threatening not to
sign this one. If he does, I’ll try to keep you updated.
