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In March of 2020, Congress passed and former President Trump signed into law over $2 trillion in aid packages intended to help curb the spread of COVID-19 and bolster the beleaguered US economy. The Families First Coronavirus Response Act (FFRCA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act authorized direct payments, forgivable business loans, increases to unemployment insurance, emergency paid leave, boosts to Medicaid and food assistance, relief for renters, and aid to state and local governments. (Note: For a full explanation of the provisions of the FFRCA and the CARES Act, please read our April 2020 report on that legislation.)
Despite the size and scope of those bills, the need for additional fiscal aid drove calls for more federal relief later in the spring when the U.S. House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The White House and U.S. Senate did not believe additional aid was necessary at that time, and no additional relief came, even after funds allocated by the CARES Act had long been spent and important provisions began to expire.
As the year wore on, the novel coronavirus pandemic raged. By the end of October, the US regularly broke its own record for new daily cases, and by early December thousands of people died every day. With many states forced to re-impose restrictions designed to slow the spread of the virus, pressure grew on the now-lame-duck Congress to pass additional relief.
On December 23, 2020, Congress finally agreed to a $900 billion year-end relief package passed in conjunction with a budget deal that funded the government through the end of 2021. On December 27, President Trump signed the bill into law.
While the December relief package did not have the same magnitude as the CARES Act, it did contain important provisions designed to provide some relief to people and businesses to help get them through the first part of the year. Congressional leaders and President-elect Biden have expressed optimism that they can agree on more comprehensive legislation designed to keep people and the economy moving while vaccines are distributed.
There are several important provisions of the year-end relief bill, including additional and extended unemployment insurance, increases to food assistance, more direct payments, a new round of businesses loans, and more relief for renters. This report lays out those provisions.
Unemployment insurance (UI) has proven to be the number one response to the economic crisis caused by the pandemic. Nearly 20 percent of US workers have been able to rely on UI during the pandemic to make ends meet and those payments have bolstered the economy.[1] $6.69 billion has been paid to laid-off Coloradans in every part of the state since March of 2020, $4.24 billion of which was financed by 2020 legislation.[2] Despite UI’s role in keeping the state economy moving in 2020, many workers—a disproportionate number of whom are workers of color and undocumented immigrants— still face barriers to accessing unemployment insurance.
The year-end relief deal extended all CARES Act unemployment provisions to March 14, 2021. That includes Pandemic Unemployment Assistance (PUA) for self-employed and other types of contract or “gig” workers, a reduced $300 Federal Pandemic Unemployment Compensation for qualified recipients (down from an extra $600 in the first part of 2020), and Pandemic Emergency Unemployment Compensation (PEUC), which provides additional weeks when regular state unemployment runs out. Emergency benefits provide additional weeks for those who would otherwise exhaust benefits and still be unemployed, increasing weeks available from 13 to 24–with all benefits ending April 5, 2021.
The year-end legislation also continues full federal funding of state extended benefits in places with high unemployment. Typically, this is a shared responsibility with the state. States have different “triggers” for extended benefits based on different calculations of the unemployment rate. When states trigger “off” benefits, by federal rule there is a 13-week period where no extended benefits can be paid to workers receiving that benefit. On November 7, the state’s unemployment rate dipped low enough to trigger off state extended benefits.
During the November 30, 2020 special session, Colorado lawmakers passed a provision in SB20B-02 that retroactively changed the trigger to allow for extended benefits in the event that Congress extended federal funding. While the US Department of Labor initially released guidance indicating it would not allow Colorado to avoid the 13-week “off” period, there is a narrowly tailored provision of the year-end relief bill that creates an exception for states that took this action. Colorado could pay additional unemployment benefits through the State Extended Benefits program as a result. However, with other provisions of the COVID relief package, unemployed workers may receive a better benefit through other federally funded provisions and the state is continuing to evaluate that as of the beginning of the 2021 legislative session.
Other provisions include:
The year-end relief bill included $13 billion for nutrition and agriculture relief.[3] This includes several provisions directed at food assistance programs, farmers and ranchers, and food supply and worker protections.
Among the many nutrition-related provisions, the bill included increases in benefits and food access through hunger relief programs such as the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), as well as food banks. Notably, legislators secured a 15% increase in SNAP benefits for 6 months (through June 30, 2021) for all SNAP recipients. It also excludes unemployment money from being counted as income in determining SNAP eligibility.
Additionally, the bill waives certain eligibility requirements for college students so they can access SNAP benefits and created a taskforce focused on testing new technology to help WIC recipients with online food deliveries, self-checkout and other related issues.[4]
In order to support food banks, Congress included an appropriation of $400 million through the Emergency Food Assistance Program through September 30, 2021, as well as $175 million for nutrition services for seniors through programs such as Meals on Wheels. Further enhancements to the Pandemic EBT (P-EBT) program were included in order to expand access to food for children. In particular, all children under the age of 6 will be considered “enrolled” in childcare so they can be eligible for P-EBT benefits. Finally, the bill included emergency funds for schools and daycares, which rely on student participation in order to secure funding, to continue to provide meals to kids during the pandemic.[5]
With so many farmers and ranchers facing in need of dire help, the bill included $13 billion in assistance[6] to address their needs:
In order to help purchase food for distribution to individuals and families in need, the bill allocates $1.5 billion for loans and grants to small food processors and distributors (e.g. farmers’ markets) for a variety of pandemic-related needs including worker protections.[7]
Like the CARES Act, the year-end federal relief bill provides stimulus checks to eligible individuals and their families. The one-time payments will provide $600 per person ($1,200 per married couple) and phase out at $75,000 for individuals and $150,000 for couples. There is an additional $600 payment per dependent child under the age of 17. In total, this second round of stimulus checks will cost $166 billion.
The small business provisions make up the largest—and costliest—provisions of the year-end relief bill. It contains much-needed CARES Act extensions and expansions, and provides a total of $325 billion in targeted aid.
The bill appropriates $20 billion in Economic Injury Disaster Loan Grants for businesses that operate in low-income communities, and provides $15 billion in funding for live venues, independent movie theatres, and cultural institutions; $12 billion for Community Development Financial Institutions (CDFIs) and Minority Depository Institutions; $3.5 billion for continued Small Business Administration (SBA) debt relief payments; and $2 billion for administrative aid and enhancement to SBA lending.
The majority of the $325 billion goes to creating a second round of Paycheck Protection Program loans for businesses that is more restrictive than the first. Only businesses with less than 300 employees and who have demonstrably lost 25% or more of their revenue after the pandemic began may apply. The maximum loan amount was also reduced from $10 million to $2 million. In addition to the second round of loans, restaurants will receive 14 weeks of paycheck protection instead of 10. Eligibility to 501 (C)(6) nonprofits, such as local newspapers, radio, and television stations has also been included. Lastly, a forgiven loan will not count as income, but can be written off as business expense—meaning businesses might be able to use it to lower their tax liabilities in 2022, but also potentially reducing tax revenue for some states and the federal government.
The bill also includes $135 billion in tax expenditures that are not directly related to the pandemic, including a reinstatement of the 100 percent business meal deductions for 2021 and 2022.
The initial federal response to the pandemic included emergency paid sick time for workers and businesses battling the immediate health impacts of COVID-19. Congress also provided for limited paid family leave for parents unable to work due to verified need for leave to care for a child whose school or child care provider was closed or unavailable for reasons related to the virus. Despite the ongoing need for paid sick and family leave, both of these provisions expired on December 31, 2020.
However, the payroll tax credits that were implemented to help employers cover the costs of paid leave requirements were extended to March 31, 2021. Colorado employers who must provide paid sick leave as required by SB20-205, the Healthy Families and Workplaces Act, can make use of these credits to offset the costs and encourage workers to utilize paid sick leave when needed to promote their own health, as well as the health of the workplace and broader community.
The bill provides $82 billion total for schools and colleges under the Education Stabilization Fund. The majority, $54.3 billion, goes to the Elementary and Secondary School Emergency Relief Fund which mostly gets distributed to schools by their proportion of Title I-A funds. Schools can use the money to address learning loss, purchase technology, and improve facilities and infrastructure to reduce the risk of transmitting the virus.
$4.1 billion will go towards funding the Governors Emergency Education Relief Fund to use for education-related pandemic assistance. Another $22.7 billion relief goes to the Higher Education Emergency Relief Fund. There is a Maintenance of Effort (MOE) provision that says states must maintain spending on both K-12 and higher education in this coming budget at least at the proportional levels compared to the last several years.
A total of $45 billion was appropriated by Congress in the year-end relief bill to the transportation sector. Approximately $9.8 billion is allocated to state transportation departments for the Surface Transportation Block Grant Program (STBGP) that are available until Sept. 30, 2024. It provides $15 billion in transit aid primarily for local governments, with about $13.3 billion for urbanized areas and $1 billion for rural areas. It also allocated $2 billion for airports, $15 billion for airlines to support payrolls, and $1 billion to Amtrak.
Nearly a year after schools, businesses, and other closures went into effect in response to the pandemic, millions of people and families continue to face eviction and homelessness. The year-end relief bill augmented provisions in the CARES Act and other federal policies that were set to expire, the centerpiece of which was an extension of the Centers for Disease Control’s (CDC) eviction moratorium, which has now been extended through January 31, 2021.
The bill also makes a $25 billion appropriation for Emergency Rental Assistance for up to 12 months to help renters pay for rent and/or utilities.[8] Households eligible to receive rental assistance are those who, according to bill language: 1) have a household income that is no more than 80 percent Area Median Income (AMI), 2) live in a household where one or more members is at risk of experiencing homelessness or housing instability, and 3) live in a household where one or more members qualify for unemployment benefits or experienced/are experiencing financial hardship due, directly or indirectly, to the pandemic.[9] The treasury department will distribute these housing assistance funds to states and localities using the same formula used in the CARES Act.
The bill includes a total of $73 billion for Health and Human Services. The bulk of that money is allocated to combat the pandemic and control the virus. That amount was distributed as follows:
There is a handful of changes to the Health and Human Service policies like the temporary freeze for “aging out” of foster youth and more flexibilities with home visiting programs for pregnant women. There are also policy adjustment to health care policy like an increase in the Medicare physician fee schedule of 3.75% to support medical staff with an adjustment for the pandemic.
The year-end relief bill provides $7 billion to expand broadband access and help people pay for internet while millions work and learn remotely.
Of that amount, $3.2 billion was allocated for the ‘‘Emergency Broadband Benefit Program’’ which provides monthly discount for eligible households (up to $50 for most households and up to $75 for an eligible household on tribal lands). Internet providers who help eligible customers with emergency broadband assistance and supply such households with connected devices may be reimbursed up to $100 from the Emergency Broadband Connectivity Fund.
Other broadband appropriations include:
The year-end relief provided by Congress will provide help to individuals, families, and businesses who are continuing to struggle during the pandemic. The bill offers a wide variety of relief, including extending and re-authorizing some of the programs that helped stimulate the economy in 2020. Though lacking in many of the areas deemed by experts to be critical to stabilizing and improving the US economy—namely fiscal aid for state and local governments hurt by reductions in tax revenue—the bill did provide badly needed relief for many families.
As the new Congress and President Biden tackle this issue in 2021, additional fiscal relief could provide what is needed to ensure the economy can bounce back in the coming months and years.
[1] https://www.jpmorganchase.com/institute/research/labor-markets/unemployment-insurance-covid19-pandemic
[2] https://cdle.colorado.gov/press-releases/press-release-state-labor-dept-update-for-the-week-ending-december-26th-ui-claims
[3] https://www.agriculture.senate.gov/newsroom/dem/press/release/ranking-member-stabenow-leads-bipartisan-effort-to-secure-increases-in-food-assistance-support-for-farmers-in-final-covid-19-package
[4] Ibid
[5] Ibid
[6] Ibid
[7] Ibid
[8] https://www.ncsl.org/Portals/1/Documents/statefed/Summary-of-HR-133-Coronavirus-Relief-Provisions.pdf
[9] Ibid
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