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CARES Act Primer

The Coronavirus Preparedness and Response Supplemental Appropriations (CARES) Act was passed by Congress in late March 2020. It is the largest of the stabilization bills passed to date. Note, I didn’t call it “stimulus” – it is too early and likely not enough for the $2.3T spending to stimulate economic activity and growth, but hopefully a good start at stabilizing the rapidly changing economy and perhaps helping with recovery as time passes. But what IS it, what does it DO, and what does it MEAN to ME?


The act makes several sweeping changes to unemployment, which is helpful if you are one of the hundreds of thousands of people who have been laid off or furloughed during the crisis. The Act The bill provides unemployed workers with their basic state unemployment benefits (about $300 per week depending on state and income) plus a federal supplement of $600 per week for up to four months. The bill extends state benefits for 13 weeks. It also provide incentives for states to waive their waiting periods, and makes unemployment compensation available to part-time, self-employed, and gig workers.

If you’re still employed (or retired, or unemployed) there’s a benefit for you too. The Act provides for checks will be sent to Americans in amounts of $1,200 per adult and $500 per child. Check eligibility will be phased out above $75,000 of income for individuals and $150,000 of income for couples. If you filed your 2018 (pay 2019) online and elected direct deposit for a refund then payments will begin as early as April 13. Otherwise checks will be mailed beginning with low income filers.


The Act provides for $10 billion of funding for Economic Injury Disaster Loans (EIDL) as grants up to $10,000 to cover immediate operating costs for businesses. $350 billion is allocated for the Small Business Administration (SBA) to provide loans of up to $10 million per business with flexible use as long as businesses employees through June 30. Finally, $17 billion for the SBA to cover 6 months of payments for small businesses with existing SBA loans. Remember the federal definition of small business is one with 1-500 employees. Self-employed are not included (unless different guidance comes out – which has been happening as time goes on).

There are significant payments to large businesses in industries like aviation. This is some of the more controversial coverage in the Act.


The Act provides $150 billion specifically for states, tribes, territories, and some local areas. It provides $8 billion for tribes and $3 billion for territories (including the District of Columbia, which is normally treated as a state for such purposes). Of the remaining $139 billion, funds are distributed to each state based on the state’s population relative to the population of the nation as a whole. Up to 45% of the funds to the states are available to “units of local governments,” which is defined as a county, municipality, town, township, village, parish, borough, or other unit of general government with a population over 500,000. There are also administrative relief provisions (especially public hearings) around the US Department of Housing and Urban Development (HUD) administered programs that fund many programs in entitlement communities and state recipient sub-grantee areas. USDA Rural Development programs have some specific relief and the Supplemental Nutrition Assistance Program (SNAP) will have an additional $25B for food assistance.

Generally the Act is using programs and mechanisms that are familiar to local units of government and federal agencies to minimize delay and confusing in implementation. However, the Treasury is administering the spending in the Act, which is a new role for them.

Local government (and state government) assistance are important because those units are experiencing higher spending and will have lower revenues from income tax and sales tax most immediately and property tax in the longer run. The assistance provided by the Act is for costs directly related to COVID-19, not general spending, but that may need to be addressed in later funding packages. Part of the reason is that, unlike the federal government, states and local governments can’t engage in deficit spending – they are required to have balanced budgets. Some states, like Indiana, have sizable “rainy day” funds, while many do not. Economists specializing in local government suggest that failure to do enough to support the economy and local government the recession will be deeper and longer than necessary and encourage erring on the side of generosity.

Transportation got a number of specific provisions and allocations of funding too. The vast majority goes to the aviation sector. The remaining $26B has $25B for transit systems which are facing increased costs and loss of revenue and $1B for Amtrak.

Education and Health Systems also received special consideration. There is $32B for education, mostly for school districts and higher education. Health systems have $100B of the funding appropriated in the Act, primarily for hospitals directly responding to COVID-19. There are provisions for resupplying the national stockpile of medical equipment and providing for drug access.


  • “NARC Analysis of the CARES Act.” National Association of Regional Councils
  • “COVID-19 and the Economy” webinar 3/30/2020, Brookings Institution
  • “Coronavirus Relief for Communities: APA Breaks It Down” webinar 3/26/20. American Planning Association

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