COVID-19: Senate Republicans Introduce Economic Stabilization Bill

On Friday, March 20, Senate Republicans introduced a draft economic stabilization bill entitled the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act. The 247-page bill includes a variety of measures intended to stimulate the economy by providing targeted relief to both businesses and individuals.

 Among the key provisions of the bill are those that temporarily modify federal income tax requirements and deadlines, provide tax credits to certain individuals and families, address shortages of key medical supplies, provide additional support for health care providers, adjust the federal student loan program and provide temporary relief for federal student loan borrowers, and make additional modifications to federal wage and hour laws.

 The bill also authorizes the secretary of the Treasury to issue loans or loan guarantees, related to losses incurred as a direct result of coronavirus, in the amount of $208 billion. These loans and guarantees can be distributed as follows:

• $50 billion for passenger air carriers;

• $8 billion for cargo air carriers; and 

• $150 billion for eligible businesses.

Eligible businesses are defined as any US business that has incurred losses directly attributable to coronavirus and has not received other economic relief. The bill contemplates additional limits regarding executive compensation as a condition to receiving a loan under the program. Although the bill does not provide limits on the ability of public companies receiving loans to continue open market repurchases of their equity securities, President Trump has said he favors such a limitation, which is also supported by several Democratic congressional leaders.

Congressional leaders of both parties anticipate a busy weekend of bipartisan negotiation in order to pass a final bill next week.