“We’re months into the coronavirus, and the impact on our national health and economy is devastating. But the ultimate damage is yet to be determined.” With this assessment, Robert Shea, Grant Thornton Public Sector Strategy principal, went on to describe actions taken by Congress to create new programs and supply resources to assist state governments, the healthcare sector, businesses and citizens during the COVID-19 crisis.
In just two months, Congress passed and the president signed four major pieces of legislation:
- Coronavirus Preparedness and Response Supplemental Appropriations Act
$8B, primarily to healthcare agencies for vaccine development and to help prevent further spread of the virus
- Families First Coronavirus Response Act
$100B, in worker assistance, including emergency paid sick leave, food assistance, and expanded unemployment payments
- Coronavirus Aid, Relief, and Economic Security Act
$2.3T in economic stimulus, including loans to support major industries and businesses, grants to states and nonprofits, and direct aid to individuals
- Paycheck Protection Program
$310B for small businesses; $75 billion in additional funding for hospitals and healthcare providers; and $25 billion for researching, manufacturing and administering of COVID-19 tests
“The scale of these programs and having to distribute benefits in a matter of days is mind-boggling,” said Shea. He highlighted challenges to implementation:
- Keeping up with the rapid pace. The Paycheck Prevention Program (PPP) alone gave out close to 2 million individual loans worth $349B in 14 days. That is approximately the same number of loans the Small Business Administration (SBA) distributed in the last 14 years.
- Favored relationships with SBA-approved lenders. Companies with existing relationships with lenders were able to receive money sooner.
- Insufficient resources. The PPP distributed the initial appropriation of $359B in 14 days. Congress approved a second batch of $310B shortly thereafter.
- Antiquated unemployment systems. State unemployment programs have not received sufficient investments; they are outdated and inadequate to handle the unprecedented demand. Many states shifted back to paper applications as websites crashed.
Even before some programs have finished allocating resources to impacted communities, Shea said, more legislation is likely. Among many different proposals, Congress is considering investments in infrastructure; IT modernization; support for restaurants, sports and entertainment venues; a payroll tax cut; and funding for state and local revenue shortfalls.
More to come after members of the House and Senate return in May, virtually or otherwise.
Watch “COVID-19: Congress’ response” for details about current and anticipated legislative action.
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