The U.S. Senate on Wednesday passed a massive spending package to try to stem coronavirus-triggered economic fallout that’s hitting the stock market and businesses large and small. The House of Representatives approved the bill and President Donald Trump signed it on Friday. The economic relief package is the biggest-ever in terms of dollar amount. It includes forgivable low-interest loans for small businesses, loans to big businesses and direct payments to Americans affected by COVID-19 and the coronavirus pandemic.
Most Americans will be in line for a one-time $1,200 payment, in addition to hundreds of dollars more per week in unemployment insurance for people laid off because of the pandemic.
The federal Small Business Administration will reimburse businesses that suffered financial losses from canceled foreign trade missions and trade shows. Small businesses may have their loans forgiven if they don’t lay off full-time workers during the covered period in 2020 — Feb. 15 to June 30. Businesses that do have to let people go during that time can still get forgiveness for some portion of their loans.
The Federal Reserve is going to dwarf every loan provision in the package with trillions of dollars of its own loans for the financial sector, businesses, states and municipalities. Here’s a quick rundown of the big numbers from the proposal that businesses and individuals will want to know about.
$2 trillion: This is the total potential cost of the package. It includes all funding, grants and loans for businesses, people, health care, education, the arts and more.
$850 billion: Size of the original economic relief package the Trump administration proposed.
335: Number of pages in the economic relief bill Trump signed into law.
Less than 2: Number of weeks in which legislators and the White House put together the legislation.
$0: Amount of taxpayer-funded loans that Trump, Vice President Mike Pence, members of Congress and senior executive branch officials — and immediate family members of all of the above — can get for businesses, like hotels, that have been hurt by the pandemic and in which they have more than a 20% stake.
For small businesses
$349 billion: Total amount the SBA is authorized to lend from Feb. 15 to June 30, 2020.
500: The maximum number of employees any business, nonprofit organization, veteran organization, or tribal business can have in order to qualify for a small business loan. This aligns with the SBA’s definition of “small business.”
$10 million: The maximum loan amount for small businesses. Businesses must put the loans toward some combination of payroll, salaries, commissions, group health care benefits, mortgage interest, interest from other debt, and rent and utility payments.
4%: The maximum interest rate for the loans.
1: The number of pending loan applications a small business can have at any time.
6 months to 1 year: The range of time that lenders have to let borrowers defer payments on principal, interest and fees.
$10 million: Amount of grant funding specifically for minority-owned small businesses. Grants come from the Minority Business Development Agency of the U.S. Department of Commerce. Funds can be used for costs minority-owned businesses realize from implementing telework policies, changes to supply chains, distribution networks and product sales, and other financial burdens from the pandemic.
For airlines and the financial sector
$500 billion: Total in loans and other financing available from the federal Department of the Treasury for air carriers and other businesses that didn’t relieve “adequate economic relief” from other parts of the package. The legislation doesn’t clearly define “adequate economic relief.”
$25 billion: Maximum in Treasury loans out of the $500 billion for passenger air carriers.
$4 billion: Maximum in Treasury loans out of the $500 billion for air cargo companies.
$17 billion: Maximum in Treasury loans out of the $500 billion for businesses critical to maintaining national security, like The Boeing Company.
5 years: Maximum length of the Treasury loans.
90%: Share of workforce that mid-sized companies — those with 500 to 10,000 employees — have to retain through Sept. 30, 2020, using the Treasury loans.
2 years: Length of time after a Treasury loan is repaid that mid-sized companies can’t send jobs offshore. Also the amount of time after the loan is repaid that these companies can’t try to rid themselves of collective bargaining agreements.
$425,000: No employee making more than this amount, at companies that receive the loans, can be paid more or receive severance above their total compensation for 2019.
$454 billion: Maximum amount out of the $500 billion going to the U.S. Federal Reserve Board.
$3.5 trillion: The rough amount in loans the Fed will turn that $454 billion into. As the nation’s central bank, the Fed has broad authority to provide loans during national emergencies. These loans aren’t like the SBA loans that are part of the economic relief package. Many of those small business loans will be forgiven. The Fed can leverage a relatively small investment from the Treasury — $454 billion — into trillions of dollars in loans to banks, businesses, states and municipalities. Banks provide loans that are the lifeblood of small and large businesses. Loans let businesses expand staff to meet product demand, invest in new technologies and weather economic storms. To be clear, $3.5 trillion is a lot of money. It’s equal to the total revenue the federal government brought in for 2019. But this isn’t the government printing money. These trillions will come in the form of loans that the Fed expects borrowers to eventually repay. But a dollar today is worth less than a dollar yesterday. Will interest rates on these loans keep up with inflation? The Fed and Treasury still have to work out the details of the programs that will dole out these loans.
0: Number of allowed stock buybacks for publicly traded businesses that take advantage of the Fed loans. With stock buybacks, a company buys its own shares. The total number of company shares on the market decreases. Share owners now own a larger percentage of the company’s shares, and the value of those shares typically increases. Broadly speaking, stock buybacks increase shareholder wealth. There are tradeoffs. Money used for stock buybacks is money the company isn’t using to invest in their workforce or new technologies or putting aside for a rainy day. If companies want access to those trillions in Fed loans, they won’t be able to funnel that money back to investors through stock buybacks.
$100 million: Amount allocated for the Treasury to administer the $500 billion in loans.
1: Number of inspector generals, appointed by the president, whose staff will audit and investigate issues that come up with the Treasury loans.
For American households
$385: Typical average weekly unemployment insurance payout, though claim amounts vary widely by state.
$600: Additional amount those qualifying for unemployment insurance — because their job was shut down due to the pandemic, they have COVID-19 or are caring for a family member with it or they have other coronavirus-related reasons — can get under the relief legislation.
39 weeks: Maximum number of weeks people can get the extended benefits.
Dec. 31, 2020: Date the extended unemployment benefits expire.
$0: Amount of unemployment insurance people can get if they are able to telework with pay, or are getting paid sick leave or other leave benefits.
$1,200: One-time payout for individual tax filers.
$2,400: One-time payout for taxpayers filing jointly.
$500: Additional amount for each child.
$75,000: Maximum annual income for individual filers to qualify for the full one-time payout.
$99,000: Maximum annual income for individual filers to get any payout.
$150,000: Maximum annual income for joint filers to qualify for the full one-time payout.
$198,000: Maximum annual income for joint filers to get any payout.
2018: Tax year used to determine income for individual and joint filers who haven’t yet filed their 2019 taxes.
2019: Tax year used to determine income for individual and joint filers who have filed their 2019 taxes.
$25 million: Funding for the Office of the Inspector General of the federal Department of Labor to carry out investigations and audits related to unemployment payouts.
This legislation is massive, and we might have missed something we should have included. Think we did? Let us know. Plus, check out our other coverage of how the coronavirus pandemic is affecting the economy and education in the U.S.
This article was updated on March 27, 2020, to reflect that the House passed the economic relief bill that day, and on March 30 to reflect that President Trump signed the bill into law.