States, businesses hope for more economic aid in next pandemic relief bill

Bill Cass, CFP®, CPWA®

Bill Cass, CFP®, CPWA®, 04/29/20


As Congress passed an "interim" $484 billion pandemic aid package last week, many lawmakers began planning for a fourth phase of COVID-19 funding, which could include aid for states and individuals.

The Paycheck Protection Program and Health Care Enhancement Act, approved on Friday, provides additional money for loans for small businesses. In the initial CARES Act, the Paycheck Protection Program (PPP) provided loans, and loan forgiveness, for small businesses impacted by policy measures to contain the pandemic. The initial $350 billion in funding was quickly depleted by affected businesses hoping for future recovery.

The interim bill provides an additional $320 billion for the PPP program. In addition, the measure provides $60 billion for disaster loans administered by the Small Business Administration.

To support the increasing demands on the health-care system, the bill provides $75 billion for hospitals and health-care providers. Also, there is $25 billion to enhance and expand the testing system for the coronavirus and its antibodies.

Fiscal response to date:

Coronavirus Preparedness and Response Supplemental Appropriations Act

March 6 — A relief package totaling $8 billion for immediate coronavirus response including vaccine development, support for state and local governments, and emergency loan subsidies for small businesses.

Families First Coronavirus Response Act

March 18 — Provided $192 billion for paid sick and emergency leave benefits, additional funding for federal nutrition programs, emergency funding for federal unemployment insurance, and coverage for Covid-19 testing.

Coronavirus Aid, Relief, and Economic Security Act (CARES)

March 27 — Comprehensive $2.2 trillion emergency response relief package providing forgivable loans to small businesses, expanded unemployment benefits, direct payments to individuals in the form of “recovery rebates,” a federal guaranteed loan facility for distressed industries, and additional funding for the health-care response to the viral outbreak.

Paycheck Protection Program and Health Care Enhancement Act

April 24 — Expands CARES by providing $484 billion in additional funding for the Paycheck Protection Program, SBA disaster loans, and additional healthcare-related funding, including testing.

Phase 4 under discussion

Planning is underway for a fourth phase of economic aid. This comprehensive aid package could top $1 trillion, according to some estimates. After the interim package was approved last week, House and Senate Democratic leaders asked members to begin crafting the next round of relief. Senate Majority Leader Mitch McConnell warned about the growing federal deficit. On Sunday, House Speaker Nancy Pelosi said the Democratic caucus is already working on the next proposal.

Additional aid to state and local governments will likely top the list of priorities in the next bill. The next wave of aid could include:

  • Another round of funding for the PPP
  • Payroll tax cut for employers and employees
  • Additional round of recovery rebate payments
  • Spending on infrastructure projects
  • More funding for unemployment, potentially an extension of the “extra” $600/week beyond July
  • Liability protection for employers who re-open
  • Additional funds for healthcare-related costs, including COVID-19 testing
Depending on the pace of negotiations, the next legislative relief package could pass in May or early June.

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