On March 27, President Trump signed into law a $2 trillion bipartisan relief bill as the COVID-19 pandemic continues to wreak havoc on the economy and millions of American lives.
Known as the “Coronavirus Aid, Relief, and Economic Security,” or CARES Act, the historic stimulus package includes increased unemployment insurance, loan programs for large and small businesses, expanded funding for the healthcare system, aid to state and local governments and a one-time stimulus payment to individuals.
The CARES Act is the biggest economic relief bill in the nation’s history and will have far-reaching impacts across the country, including on Cornell students and Ithaca residents.
In particular, the individual payment provision and its eligibility guidelines have caught much attention. According to the Act, all adults with Social Security numbers who make $75,000 or less will receive the maximum stimulus check of $1,200. Income eligibility will be assessed through either one’s 2018 or 2019 federal tax returns.
Though many college students file tax returns, and fall within the eligible income range, they likely will not receive a payment for any amount as the payment provision does not apply to any adult who is claimed as a dependent. According to The New York Times, students under the age of 24 count as a dependent if their families pay for the majority of their expenses.
Nevertheless, the law includes many other forms of financial relief for students in higher education.
The Act suspends federal student loan payments through Sept. 30 and states that during this suspension period, “interest shall not accrue” on those loans. This only applies to federally backed student loans originated in the past ten years.
It also enables colleges and universities to continue paying federal work-study wages to students for up to one academic year, even if they are unable to work during this time.
Additionally, schools are allowed to reallocate leftover work-study funds into their supplementary grants. These grants can then be used to assist undergraduate and graduate students with “unexpected expenses and unmet financial needs” resulting from the pandemic, as stated in the legislation.
In the event that a student withdraws from their institution due to the ongoing pandemic, the Act also waives the requirement for returning any federal aid they receive and cancels federal student loans associated with the payment period for which the student withdraws.
The CARES Act comes at a time when hospitals across the country are facing severe shortages of critical equipment, such as masks, PPE and ventilators.
As The Sun previously reported, Cayuga Medical Center, the primary hospital in Ithaca, has only 204 hospital beds — a capacity that could be quickly dwarfed if worst-case estimates of the virus’ spread come to bear in the area.
To strengthen an overwhelmed healthcare system — Gov. Andrew Cuomo (D-N.Y.) ordered all medical facilities in the state to increase beds by 50 percent — the stimulus package contains $130 billion for hospitals, the Indian Health Service and expanded medical equipment capacity.
The stimulus package was also welcomed by small business owners in Tompkins County, who have been significantly affected by the pandemic and an exodus of thousands of students.
The Tompkins Weekly reported that business owners are faced with the difficult decision of laying off employees in order to cut their losses, as measures like the closure of all “non-essential” businesses and nonprofits have led to drastic drops in sales and cash flow.
The resulting surge in unemployment and loss of income is addressed in the CARES Act with a provision that Sen. Chuck Schumer (D-N.Y.) called “unemployment insurance on steroids.” According to Vox, it increases unemployment insurance by $600 per week for four months, in addition to base unemployment salary.
The legislation also offers $350 billion through its Paychecks Protection Program, which uses loan forgiveness to incentivize small business owners to keep their employees on the payroll, according to the Washington Post.
Community leaders who spoke to Tompkins Weekly said that although the relief package is a “good first step,” more must be done in the coming months. Specifically, they called for focusing on the needs of nonprofits, small businesses, and workers.
“A tremendous amount of our workforce is employed by small businesses, and so, we need the small businesses to be there when this is over so that the workforce can be brought back and get back to employment,” Greg Hartz, president and CEO at Tompkins Trust Company, told Tompkins Weekly.
Mayor Svante Myrick ’09 has tweeted his support for Senators Schumer and Kirsten Gillibrand’s (D-N.Y.) negotiation on the bill, although he is still pushing for more funds to be allocated to small cities like the one he presides over.
Please please please include small cities. Right now only huge cities could apply.
Small cities need support to fight this virus and weather the economic fallout. Thank you!
— Mayor Svante Myrick (@SvanteMyrick) March 24, 2020
Myrick and other politicians have called for further measures to be taken, including additional direct payments — a universal basic income for the next few months of the pandemic.
“This challenge is unprecedented,” Myrick tweeted on March 10. “The response should be too.”