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Law360 (March 25, 2020, 10:42 PM EDT) -- The Senate passed a sweeping economic stimulus package Wednesday that would provide billions of dollars in loans, expanded unemployment benefits, and other help for businesses and workers struggling with the economic impact of the novel coronavirus.
The Coronavirus Aid, Relief and Economic Security Act would boost unemployment benefits for workers who have lost their jobs because of the virus and extend eligibility to independent contractors and other workers who generally can't collect. It would also give small- and medium-size businesses forgivable debt contingent on their continuing to pay workers.
Senate Majority Leader Mitch McConnell, R-Ky., praised the effort to pass the bill in a floor speech earlier Wednesday.
"Many American families who have poured everything into a restaurant, or a shop, or a small manufacturer are going to keep making payroll and keep their businesses alive ... because the Senate stepped up," McConnell said.
Minority Leader Chuck Schumer, D-N.Y., described the bill as "imperfect but ... necessary" in floor remarks.
"We are going to take up and pass this bill to care for those who are now caring for us, and help carry millions of Americans through these dark times," he said.
Senate leaders had struck a deal on the CARES Act shortly after midnight Wednesday after Democrats blocked earlier proposals seeking more checks on business loans and greater expansion of unemployment.
The act is the third phase of lawmakers' effort to stem the spread of coronavirus and blunt its economic and health effects following the March 4 approval of $8.3 billion in virus response funding and the March 18 signing of the Families First Coronavirus Response Act, which expands paid sick time and leave eligibility for affected workers and shores up Medicaid and food programs.
This latest package is aimed at bolstering the health care system and the ailing economy by doling out trillions of dollars in financial help. For businesses and workers, this aid would take several forms, including one-time payments of up to $1,200 each to individuals making less than $100,000, and hundreds of billions of dollars worth of loans to affected corporations and small businesses.
The bill would expand unemployment in several ways, including by creating a temporary Pandemic Unemployment Assistance program that will pay out affected workers who are not traditionally eligible for benefits through Dec. 31. This includes independent contractors, the self-employed, those with limited work history, and others. It also pays collecting workers an additional $600 per week on top of their regular benefit for up to four months, and provides as many as 13 more weeks of payments to workers whose state benefits end before they can return to work.
A provision of the bill known as the Paycheck Protection Program would incentivize struggling small- and medium-sized businesses to continue paying workers and providing benefits through partially forgivable loans to cover salaries, insurance, rent and other costs. Employers with fewer than 500 workers would be forgiven the amounts they put into payroll costs and mortgage payments and interest for eight weeks after loan origination, with some limitations. This forgiveness is also available to businesses that rehire workers who have already been laid off.
The bill also provides $500 billion in non-forgivable loans to other businesses under certain conditions, including that they maintain their current staffing through September "to the extent practicable" and do not engage in stock buybacks "unless contractually obligated."
--Additional reporting by Stephen Cooper. Editing by Adam LoBelia.
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