The United States has a $2 trillion relief package in the works to help individuals and businesses bear the impacts of the COVID-19 pandemic.
The bipartisan effort is unprecedented, particularly as even more emergency funding—as well as a stimulus package—will likely be needed in the months ahead to assist businesses and consumers devastated by the virus and its effects.
On Wednesday night, the U.S. Senate approved the aid package, which will head to the House of Representatives for a vote Friday morning. President Trump has already indicated that he will sign the approved bill when it reaches his desk.
In the fashion sector, retailers have temporarily closed stores for the foreseeable future, some have announced layoffs and furloughs, and nearly all have taken a closer look at operations to see where else they can cut costs to preserve cash.
Aid for businesses
The new spending package includes a $500 billion lending program, which will provide loans, loan guarantees and investments for distressed firms. After carving out $29 billion for air carriers, including $4 billion for those specific to cargo, and $17 billion for companies working in national security, $454 billion is left to prop up hard-hit businesses and state and local governments.
How much of that figure might be available for the retail and fashion sector wasn’t immediately clear. What is known, however, is that the spending bill provides for direct loans for mid-sized businesses, classified in this case as companies between 500 and 10,000 employees. To obtain the loan, business recipients must keep 90 percent of their workforce level as of March 24 through Sept. 30. And if they are publicly listed, they can’t issue dividends for up to a year after the loan has been paid back.
The relief package also includes an allocation for a $350 billion loan program that’s partially forgivable through grants for small businesses. This program is targeting firms whose total headcount is 500 or less.
The bill provides for payroll-tax deferments, too. Employers can delay payroll taxes for Social Security until 2021 and 2022. Also, a portion of the $454 billion in funds to help distressed firms will be allocated to small businesses, but exactly how much wasn’t immediately clear.
Other components include a $130 billion aid package for hospitals.
Help for consumers
On the consumer side, $250 billion has been set aside for direct payments of $1,200 to individuals and $500 per child under the age of 17. The provision contains certain adjusted gross income thresholds for scale-down payments, and eventually phase out for anyone making over $99,000.
Also key is $250 billion that the federal government will use to expand unemployment insurance by giving individuals an additional $600 per week for four months. That payment would be on top of what they receive in state unemployment benefits. Most states dole out between $200 to $550 per week.
There’s also a new pandemic unemployment assistance program for those who are unable to work because of the virus and don’t quality for traditional benefits. This provision specifically helps those working as independent contractors and anyone who is part of the gig-economy.
And the bill provides $450 million allocated for The Emergency Food Assistance Program, as well as $200 million for food assistance for Puerto Rico and other U.S. territories.