“Almost There” Highlights of the CARES Act

We should be on the verge of the start of MLB baseball season, with all the anticipation generated by spring training nearly behind us. Like a runner stranded on third base, we are yearning to “cross home plate” in our contest with the COVID-19 Pandemic.

  • We want to hear our beleaguered healthcare professionals have enough protective masks and gloves, that there are enough test kits to determine who among us do or do not have the virus.
  • We want to hear the fiscal stimulus measures passed by our Congress will provide sufficient relief to get us through nine economic innings.
  • We want to know the umpires (read CDC, NIH, et al.) have clear vision clear and are calling an honest game.
  • We want to know the worst is behind us.

In short, we want to know we’re almost there; that there is an end to this pandemic.

The U.S. CARES Act passed by Congress and signed by the President on Friday offers much to be welcomed (save perhaps the immediate needs of hospitals, major city healthcare networks, and small towns that have been ‘under-doctored’ for a long time. ) The legislation was greeted by a hearty “We’re Almost There” by its congressional authors before the ink was dry. Let’s look at some of the line-up highlights*:

For Individuals

  • Direct cash payments made to qualifying households of $1,200 per taxpayer ($2,400 for Joint Filers) and $500 per child (phased out above $75,000 ($150,000 Joint) income levels)
  • Federal assistance to the states for extending Unemployment Insurance benefits, both in duration (39 weeks up from 26), and in eligibility (extending benefits to previously ineligible categories such as Lyft drivers, contractors, free-lancers – in essence, Gig economy workers)
  • Free testing and treatment for COVID-19 exposure (once we have enough of both to go around)
  • Substantial relaxations of the Health Savings Account and Flexible Spending Account rules to allow these tax advantaged funds to be used to pay for COBRA premiums (healthcare insurance for the recently unemployed) and over-the-counter supplies such as non-prescription medicines and diapers, among many other items.

For Businesses

  • Direct federal assistance in the form of loans and grants for industry groups suffering the most extreme dislocations, such as the airlines, aerospace manufacturers, cargo carriers, and national security sectors (there are serious strings attached regarding no company stock buybacks and maintaining 90% of employment level with March 24th as the base date with Congressional oversight)
  • Massive increases in lending authority for the Small Business Administration (crucial for sole-proprietors and smaller employers; importantly, loan amounts allocated to payroll, rent or mortgage interest, and utility bills will be forgiven)
  • Huge new authority for the Federal Reserve and other federal agencies to make loans or purchase debt from corporate, state, and municipal issuers (requires taxpayer protections such as collateral, restrictions on share buybacks, dividends, and executive comp, with Congressional oversight)
  • Substantial tax concessions involving treatment of tax losses, employee retention credits, payroll tax delay, and interest deductibility

In addition, nearly $500 billion is allocated for the following purposes:

  • Aid to states to offset lost revenues
  • Hospitals and medical industry entities (in the form of reimbursements)
  • Federal Emergency Management Agency (FEMA) for disaster relief
  • Grants for transportation systems and entities such as airports

Much remains to be done. Healthcare systems will be strained as never before over coming weeks as the extent of exposure becomes manifest. Critical supplies and facilities needs will become ever more urgently called for as local hospitals run out of gowns, masks, and beds.

Perhaps most importantly, many Americans need to be convinced—and act accordingly—that COVID-19 is a very grave threat. If you think of the U.S. fighting a war, not against a hostile power but a new strain of,virus you begin to understand the implications. All previously spent defense dollars are of no help, other than providing for hospital ships for stricken cities like New York. We all need to become more educated and thoughtful about the position on the field each of us needs to play.

We are all thoroughly informed, if not yet proficient, at what hand-washing, glove-wearing, and social-distancing mean. We have been released to do some of the most extensive Spring Cleaning of our adult lives (especially since there are no sports to watch and no commutes to endure). We have rediscovered our kitchens. We have learned how to find neutral corners in our oh-so-small living spaces. The home office revolution, already begun due to traffic congestion and the Internet, has gotten the biggest boost in a generation. And we have Skype, FaceTime, and Zoom!

So…when we think about what we, our communities, and our government can and are doing, we cannot help but wonder (and hope), “Are we almost there?’’


NWCM is continually monitoring the markets and the legislative landscape during this difficult time and we will continue to communicate with you as the environment changes. Please feel free to reach out with any questions by emailing service@nwcm.com or calling us at (503) 597-1616, Washington, (206) 707-7955 or Arizona (480) 280-7604. We look forward to hearing from you.

Your NWCM team


* For a detailed description of the U.S. CARES Act or 2020, please reference the following summary at: https://www.npr.org/2020/03/26/821457551/whats-inside-the-senate-s-2-trillion-coronavirus-aid-package