What's in the $2 Trillion Coronavirus Relief Package?

Mar 25, 2020 | Economics

The Senate is expected to vote tonight on the Coronavirus Aid, Relief, and Economic Security (CARES) Act – the third and most expansive package designed to address the public health and economic crisis brought on by the novel coronavirus (COVID-19) pandemic.

The legislation would expand and extend unemployment benefits, send most Americans a $1,200 per person check, incentivize and compensate businesses to keep workers employed, facilitate new loans and grants to large and small businesses, increase aid to states, spend more on hospitals, offer targeted tax relief, and enact other tax and spending changes.

Though the deficit impact of the legislation is still unclear, it has been described as a $2 trillion package. In the table below, we identify $2.3 trillion of costs, which is a summary of the bill as we understand it at the time. Dollars presented here don’t necessarily equate to the ultimate deficit impact; some costs may be recovered later, such as loans that are eventually repaid.

Provision Dollar Cost
Expand & Extend Unemployment Benefits $260 billion
Boost all unemployment benefits by $600 per week, cover additional workers who would not normally be eligible, provide an additional 13 weeks of benefits, & other changes $260 billion
Issue One-Time Checks $290 billion
Provide tax rebates of $1,200/adult & $500/child, phased out above $75,000 of income ($150,000/couple) $290 billion
Provide Small Business Loans & Grants $377 billion
Support, issue, & guarantee loans to small businesses; offer loan forgiveness for funds spent on payroll, rent, mortgage interest, & utilities $366 billion
Provide emergency grants for small businesses $10 billion
Issue grants related to small businesses & entrepreneurial development $1 billion
Support Loans & Loan Guarantees for Large Businesses & Governments $510 billion
Provide loans to passenger airlines $25 billion
Provide loans to cargo airlines  $4 billion
Provide loans to firms vital to maintaining national security  $17 billion
Provide loans to the U.S. Postal Service for operating expenses $10 billion
Support $4.5 trillion of loans to businesses, states, & municipalities via new Federal Reserve facility $454 billion
Support State & Local Governments $150 billion
Provide aid to states (at least $1.25 billion per state) $150 billion
Increase Health-Related Spending >$180 billion
Increase hospital & public health funding $100 billion
Increase preparedness funding $27 billion
Increase funding for community health centers $6 billion
Increase Medicare payments, expand telehealth & home services, & repeal Medicare sequester ~$20 billion
Increase funding for the CDC, FDA, NIH, IHS, & other health-related agencies ~$10 billion
Increase funding toward veterans & defense health $20 billion
Support the Safety Net $42 billion
Increase SNAP (food stamps) & child nutrition funding $25 billion
Increase child & family services funding $5 billion
Boost housing support $12 billion
Increase Disaster Assistance $45 billion
Expand FEMA disaster assistance fund $45 billion
Increase Education Spending  >$32 billion
Establish Education Stabilization Fund for states, school districts, & higher education institutions $31 billion
Enact supplemental appropriations for Department of Education programs <$1 billion
Preserving student aid for those affected by COVID-19 ?
Defer payments & interest on federally-held student loans for 6 months ?
Support Transportation Providers & Industries $72 billion
Provide grants to air carriers & airline contractors to avoid furloughs & pay cuts $33 billion
Issue infrastructure grants to transit providers, including state & local governments $25 billion
Provide grants to publicly-owned commercial airports $10 billion
Temporarily suspend airline ticket, cargo, & fuel taxes $4 billion
Reduce Individual Taxes ~$20 billion
Permanently allow HSA purchases of menstrual products $9 billion
Loosen caps on deductibility of charitable giving as a share of income $1 billion
Provide temporary deduction for up to $300 of charitable donations by nonitemizers $2 billion
Allow up to $100,000 to be withdrawn from retirement accounts for reasons related to COVID-19 $3 billion
Temporarily waive retirement minimum distribution rules $5 billion
Temporarily exclude employer-provided student loan assistance from income $0.5 billion
Cut Business Taxes  ~$280 billion
Loosen caps imposed under the Tax Cuts & Jobs Act on interest deductibility & operating losses $210 billion
Offer payroll tax credits for businesses who retain workers at a loss $55 billion
Delay employer payroll tax payments from 2020 to 2021 & 2022 $12 billion
Allow retailers & restaurants to write off the cost of improvements *
Allow liquor distillers to make hand sanitizer tax-free Minimal
Other spending  >$25 billion
TOTAL ~$2.3 trillion

*Scores with no effect because it was already estimated as part of the 2017 tax cuts, even though the change will reduce revenue.
Source: Summaries provided by legislative offices, JCT, bill text, CRFB estimates.

Update 3/26/20: This table was updated after publication to add $33 billion in grants to airlines and contractors and $10 billion in loans to the U.S. Postal Service and with the JCT estimate.