The Cares Act: A Historical Overview Of Its Enactment

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Trump on March 27, 2020. The CARES Act provided economic relief to small businesses and self-employed Americans impacted by the COVID-19 pandemic. The Act included provisions such as the SBA 7(a) Paycheck Protection Program (PPP) and addressed issues related to Economic Injury Disaster Loans (EIDLS).

The CARES Act was signed into law by President Trump on March 27, 2020

On March 27, 2020, President Trump signed the CARES Act into law. The Coronavirus Aid, Relief, and Economic Security Act, otherwise known as the CARES Act, was passed in response to the COVID-19 pandemic. The Act was designed to provide economic relief to small businesses and self-employed Americans across the country.

The implementation of the Act was critical to millions of small businesses and self-employed people across the country. The SBA and U.S. Treasury worked around the clock to ensure loan applications and capital were processed efficiently. This was a significant challenge given the high demand for capital. The CARES Act also provided provisions for Economic Injury Disaster Loans (EIDLS), which could be converted into PPP loans.

The CARES Act was first introduced in the House on January 24, 2019, by Rep. Courtney, Joe [D-CT-2]. It then passed/agreed to in the House on July 17, 2019, with a vote of 419-6. The Act became Public Law No: 116-136 on March 27, 2020.

The CARES Act was a critical piece of legislation that provided much-needed financial support to small businesses and self-employed Americans during the COVID-19 pandemic. The timely implementation of the Act was essential to ensuring that those affected by the pandemic received the assistance they needed as quickly as possible.

The Act amended the Internal Revenue Code of 1986

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Trump on March 27, 2020. The Act amended the Internal Revenue Code of 1986, which is the United States tax code. The Internal Revenue Code (IRC) is enacted by Congress, which typically enacts federal tax law in the IRC. The IRC is complex, and its sections must be read in the context of the entire Code, the Treasury Regulations, and court decisions that interpret it.

The CARES Act amended the IRC to repeal the excise tax on high-cost employer-sponsored health coverage. This was likely done to provide relief to Americans during the COVID-19 pandemic, as the Act was aimed at providing economic security to Americans impacted by the pandemic. The Act also included provisions for small businesses and the self-employed, such as the SBA 7(a) Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDLS).

The CARES Act also addressed supply shortages in the healthcare system, with sections dedicated to mitigating drug and medical device shortages. It also provided coverage of diagnostic testing, treatment, and preventive services and vaccines for COVID-19. The Act supported health care providers with supplemental awards for health centers and required the strategic national stockpile to include certain types of medical supplies.

In addition to healthcare and economic provisions, the CARES Act also made modifications to the tax code for taxpayers other than corporations. This included a modification of the limitation on losses and a modification of the credit for prior-year minimum tax liability of corporations. These changes were likely made to provide further economic relief to Americans during the pandemic.

It provided financial support for small businesses

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Trump on March 27, 2020. The act was designed to mitigate the economic fallout of the COVID-19 pandemic by providing financial support to small businesses, self-employed Americans, and the U.S. workforce more broadly.

The CARES Act provided financial support for small businesses through the Paycheck Protection Program (PPP), which offered forgivable loans to small businesses and other eligible organisations to cover payroll costs and other operating expenses. These PPP loans could be used to cover group health care benefits, insurance premiums, some forms of paid leave, mortgage interest, rent, and utilities. Businesses that met the eligibility criteria were required to certify that they were operational before February 15, 2020, and that they had employees on their payroll. Additionally, they had to affirm that the loan was necessary to support ongoing operations and retain employees, and that the funds would be used for their intended purposes. PPP loans were available for up to 2.5 times the average monthly payroll of an eligible small business, up to $10 million. The program was later replenished with additional funding through the "Paycheck Protection Program and Health Care Enhancement Act."

The CARES Act also established or expanded several other loan programs to provide liquidity to businesses, including the Coronavirus Economic Stabilization Act (CESA), which created the Main Street Lending Program and authorised the Federal Reserve to make loans and loan guarantees to mid-size businesses with 15,000 or fewer employees to cover losses related to the coronavirus. Furthermore, the act provided for Economic Injury Disaster Loans (EIDLs) and the Small Business Debt Relief Program. These programs aimed to provide financial relief to small businesses struggling due to the pandemic.

In addition to loan programs, the CARES Act offered more flexibility in unemployment benefits, retirement accounts, and tax filing and payment dates for small businesses. It authorised additional weeks of federally funded unemployment benefits for individuals who had exhausted state and federal benefits, including a $600 supplemental weekly benefit for all weeks of unemployment between April 5, 2020, and July 31, 2020. This support was also made available to independent contractors, self-employed individuals, and workers with limited work histories.

It included provisions for Economic Injury Disaster Loans (EIDLS)

The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was signed into law by President Donald Trump on March 27, 2020, in response to the economic fallout of the COVID-19 pandemic. It was the largest economic stimulus package in US history, amounting to 10% of the total US gross domestic product.

The CARES Act included provisions for Economic Injury Disaster Loans (EIDLS). The Small Business Administration's Economic Injury Disaster Loans (EIDL) were expanded to cover most nonprofit organizations, including faith-based organizations. The maximum amount of an unsecured EIDL loan was $25,000, while a secured EIDL loan could be for up to $2 million. Each EIDL had a low-interest rate and a term of up to 30 years. An advance payment of $10,000 was available to EIDL applicants, which did not need to be repaid. The proceeds from an EIDL could be used to pay for ordinary and necessary operating expenses, liabilities, and other bills that could not be paid due to a decrease in revenue.

The EIDL program was designed to provide financial assistance to small businesses and nonprofits that were experiencing a temporary loss of revenue due to the COVID-19 pandemic. The loans could be used to pay for essential operating expenses, such as rent, utilities, and payroll, helping businesses to keep their doors open and retain their employees.

To apply for an EIDL, applicants had to demonstrate an acceptable credit history and the ability to repay the loan. The Small Business Administration (SBA) implemented a download-and-upload method for forms to streamline the application process and efficiently process the high volume of loan applications.

In addition to the EIDL program, the CARES Act also provided for the Paycheck Protection Program (PPP), which offered forgivable loans to small businesses to help cover payroll and other eligible expenses. The CARES Act's provisions for small businesses and the self-employed were critical to providing financial support and ensuring a robust recovery for millions of Americans impacted by the pandemic.

It addressed supply shortages of medical products

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law by President Trump on March 27, 2020. The Act provided federal agencies with almost $100 billion to address the breakdown in the supply chain of medical products needed to combat the COVID-19 pandemic.

The COVID-19 pandemic had a significant impact on the medical product supply chain, both globally and within the United States. The pandemic exposed existing vulnerabilities in the US medical product supply chain, such as a lack of transparency regarding the manufacturing origins of specific medical products and their components. It also highlighted a heavy reliance on foreign countries for drugs and medical devices. This resulted in extreme shortages of personal protective equipment (PPE) and other critical medical supplies and products.

The CARES Act sought to address these shortages in three main ways. Firstly, it expanded reporting requirements for firms experiencing interruptions in drug and device manufacturing. Secondly, it required the Strategic National Stockpile (SNS) to include certain types of medical supplies, such as PPE, ancillary medical supplies, and other applicable supplies. Finally, it extended liability protections for certain respiratory protective devices used during emergencies.

The Act also included a provision for a temporary increase in the federal share of Medicaid assistance to states and additional Medicaid assistance to territories. Furthermore, it required a study of US dependence on critical drugs and medical devices imported from or manufactured in foreign countries.

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