By Mary Coen

The New York Times May 16 edition has a front-page article “DeVos Funnels Coronavirus Relief Funds to Favored Private and Religious Schools” – another (mis)use of CARES funds. Turns out $30 billion of the original fund went to education (i.e., DeVos), and she wants to give it out to use as vouchers. Her continued attempt to privatize education and to destroy our public education system. This is just one way the GOP is hijacking CARES funding.

The bill labelled “CARES”, short for Coronavirus Aid Relief and Economic Security, (got to love those alphabet soups when they can be made to spell something feel good), known to most of us as the ‘stimulus package’ was signed into law on March 27,2020. At the time most of us were dealing with the results of a great upheaval in our daily lives – shelter-in-place and weren’t very concerned about the details of the bill except where it affected our bank account. It wasn’t until just less than three weeks later when we learned that the loan money meant for small businesses was almost gone – and much of it to LARGE businesses, that we perked up our ears and asked what was going on.   

So here is a summary:

The bill allotted $2 trillion for immediate use, $500 million for corporate loans, $349 million for small business loans, $150 million for public health needs and $300 million for stimulus checks (you know, the part you remember). It also enhanced some existing programs such as extending unemployment benefits and changing tax day to July 15.

So, what has happened with it so far? Most individual checks have gone out, but not all. (My husband gets benefits through the VA, and we have been informed that our checks are to be expected on May 20). We can only hope that all who are in desperate need of money will receive it, but between glitches and small-print exceptions, not quite all will.

It was the small business money that went astray the fastest: by April 16 it was nearly out of money and it came to light that the majority had gone to LARGE businesses. It seems that the culprit was the fact that the money was given to commercial banks to distribute with the permission to distribute as they would their own loans. So, they did. To their preferred customers first.

The loans were intended by law to be very low-interest and with the potential to have it forgiven under certain circumstances, i.e., retaining all employees and using it only for wages. Many loan recipients became intentionally creative in skirting these restrictions, and were called out by the press. And in fact, many loans were returned. But not all. And even then, many really small businesses, like Mom-and-Pops, were too late to get a share. For comparison’s sake, note that a “small” business is described as one with up to 500(!) employees.

Unemployment benefits were extended by about 13 weeks for most states, with $600 weekly added until July 31. Eligibility was also increased to include independent contractors, gig workers, free-lancers and furloughed workers. Rent or mortgage relief can be applied for if you have a government-backed loan from Fannie Mae, Freddie Mac, VA, FHA, HUD or FDIC and have lost your job. You can check with your state or local banks.

On April 24, a second stimulus of $484 billion more was added to the fund for business aid, and health care.

in order for any of this to happen, good faith negotiation had to take place between the Democratic-controlled House and the Republican-controlled Senate. It did. But what got lost in the rush was an efficient agency of distribution, particularly for the business sector, and an effective oversight capability. These still need to be addressed. As I write this a third stimulus package is about to be voted on in the House, a bill totaling $3 trillion. Unemployment benefits alone will need a great influx of additional money, and there is talk of a second round of personal checks. However, watch out for the guy with the pen – he is threatening not to sign this one. If he does, I’ll try to keep you updated.