On Thursday, April 23, the U.S. House of Representatives passed a $484 billion financial support package to further shore up American institutions and individuals financially damaged by the COVID-19 Pandemic.
The funding package, which passed the house on a 388-5 vote, is primarily intended to replenish depleted funding appropriated last month in the omnibus Coronavirus Aid, Recovery and Economic Security (CARES) Act.
This installment of additional funding is mainly for small businesses and hospitals experiencing COVID-related revenue shortfalls and closures.
An interim coronavirus assistance bill, in a similar form, passed unanimously in the U.S. Senate this past Tuesday. The bill was then forwarded to the House of Representatives and Speaker Nancy Pelosi for action, where the package was approved and eventually signed by President Donald Trump upon its arrival at the White House Thursday evening.
U.S. Rep. Peter DeFazio, who represents Oregon’s 4th Congressional District and is Chairman of the House Committee on Transportation and Infrastructure, said the infusion of funds was needed by many of his constituents.
“While I believe even more funding is needed, I’m also pleased the bill includes $75 billion in relief to hospitals and healthcare providers to cover expenses or lost revenue attributable to COVID-19, and also $25 billion to expand our nation’s COVID-19 testing capacity — $11 billion of which will go directly to states and localities to help them bolster testing shortfalls in their communities,” DeFazio said. “Widespread testing is the key to fighting this virus, reopening the economy and, above all else, protecting the health and wellbeing of Americans so that we can safely begin to resume our normal lives.”
Congress passed the CARES Act on March 27, which among other things allocated resources to businesses and individuals to assist in maintaining payroll and liquidity after the first widespread effects of the pandemic started to affect American society.
This effort was quickly overwhelmed by the scale of public need for assistance. Millions of businesses have been impacted by the pandemic and its fallout, and many have tried to receive support from the federal government and been unsuccessful.
However, there is mounting data that illustrates how, even with some form of financial assistance, as many as 30 percent of small businesses in America may not reopen, according to a recent article in Forbes magazine.
Models also show the numbers of businesses likely to fail increases dramatically the longer state-mandated shutdowns and closures remain in place.
The official death toll from the coronavirus outbreak in the United States has surpassed 50,000, with the number of total reported cases expected to exceed 1 million by the weekend.
So far, Lane County has reported only two COVID-related fatalities as of press time, with the latest announced just Friday with the death of a 59-year-old man from the Eugene/Springfield area with pre-existing conditions. As of Friday at noon, there have been 50 confirmed positive cases and a total of 2,679 tests completed, according to Lane County Public Health.
The Oregon Health Authority (OHA) reports a total of 83 COVID-related fatalities statewide, and 2,127 individuals who have positively contracted the disease as of Friday.
The majority of the $484 billion interim pandemic package will be allocated to the Paycheck Protection Program (PPP), which was intended to provide financial assistance to small business owners by providing them with funds to continue paying employees while closed due to the pandemic. The PPP program was implemented and is overseen by the Small Business Administration, with support from the U.S Department of the Treasury.
The original intent of PPP was to provide small businesses with funds to pay up to eight weeks of payroll costs, rent, utilities and mortgages. All PPP earmarked funds were quickly allocated with millions of claims left unfunded and, in some instances, unprocessed. Public disappointment with the initial PPP guidelines was widespread and bipartisan. Unfortunately, many larger, publicly traded companies were given preference during the filing applications process while smaller, less well-financed operations were shut out.
According to DeFazio, “The Paycheck Protection Program has provided Oregon’s small businesses a critical lifeline as they deal with the economic impacts of the coronavirus pandemic, but it was clear that more assistance to small businesses was needed. With passage of this legislation, we’ll add more than $300 billion to the PPP, and I’m proud that we were able to secure $60 billion for small and mid-sized banks, credit unions and community-based lending institutions to ensure that unbanked and underserved businesses that have been pushed to the back of the line can access this vital program.”
The legislation passed Thursday by Congress was seen by leaders in both major political parties as necessary in order to adequately deal with the ongoing social and economic ramifications of the disruption to the country caused by COVID-19.
Tens of millions of Americans have filed for unemployment benefits in the last month. States across the country have instituted mandatory closings and are limiting the numbers of individuals allowed to congregate in social settings. Retail eating venues and whole segments of the entertainment sector have been decimated by these closures. Social institutions like churches, fraternal organizations and sporting events have been dramatically impacted and constitutional issues have entered into the national discussion.
Congress members from both sides of the political aisle realized the need for additional funding quickly and, almost immediately upon the implementation of the CARES Act, began working on additional legislation to address the most obvious of the package’s shortfalls.
There is also language in this round of assistance which clearly defines that money being allocated is specifically for non-publicly traded companies. This stipulation theoretically removes the possibility that a company with tens of millions of dollars in revenue receives assistance while small business owners do not.
Hospitals, which have been on the front lines of the battle to control the COVID outbreak, received $100 billion to supplement reduced revenue due to the curtailing of elective surgeries and for materials needed to increase testing for the virus. The designation is important as there is currently no testing plan to determine the spread of the disease.
The Economic Injury Disaster Loan (EIDL) portion of CARES also received an infusion of $60 billion, which will allow for those that suffered catastrophic loss to receive assistance.
DeFazio said he believes local governments and tribal entities have been unfairly excluded from receiving CARES-related support and believes another round of financing needs to include funding for both of those groups.
“Unfortunately, despite bipartisan support for additional funding, the Trump administration and congressional Republicans refused to add any additional funding for state, local and tribal governments who are on the front lines of this crisis,” the representative said. “I will continue to push for greater and direct investment in state and local entities in any subsequent relief legislation. I will also continue to push for strengthening SNAP benefits, investments in our Postal Service, additional economic impact payments, implementation of an OSHA emergency temporary standard to strengthen protective measures for our front-line workers, funding for hazard pay for these individuals, and more.”
The end result of Thursday’s legislation dealt with the most glaring deficiencies of the CARES Act and will serve as the next step in the government’s attempt to mitigate the economic impacts being felt across Oregon.