This week, US President signed a $2 trillion economic relief plan to provide aid to those affected by the coronavirus pandemic. The plan, which has bipartisan support, seeks to help individuals, small businesses and big corporates. So, does it fulfill its mandate or is just a band-aid?

After China, Italy and Spain, the US has seen a huge spike in the number of coronavirus cases. The total number of cases in the US was more than 1,22,000, and 2,100 people have died due to the infection. the country now has the mostnumber of cases in the world.

I told you last week that many States and cities shutdown to prevent the spread of the coronavirus. As a result, stock markets crashed and unemployment claims soared. It did not get any better -- a record 3.3 million people filed claims for unemployment benefits last week, the nations’ labour department said. To put things in perspective, the claims to unemployment benefits were near record lows just last month.

This is the impact on the economy -- businesses closed down and people were laid off.

It is in this scenario, that the Democrats and the Republicans came together to propose a $2 trillion relief package. After a lot of back and forth, they came to a deal. This act, called the ‘Coronavirus Aid, Relief, and Economic Security (CARES) Act’, was signed by US President Donald Trump on Friday. Here are some important details of the act:

The individual

The deal provides for a one-time non-taxable payment of $1,200 for adults and $2,400 payment for married couples filing jointly, with a payment of $500 for every child under the age of 16. However, this scheme is not for all and it does not cover any loss of income in 2020. 

It also extends unemployment benefits to all those who are unemployed, partly-unemployed or cannot work due to the virus. In this scheme, the federal government will provide $600 per week to individuals for four months. It is in addition to the benefits which the states give.

It applies not only to those who lost their jobs due to the lockdown, but also to gig workers, freelancers, contractors and those who have been quarantined, or are caring for a family member with the infection, and those who are taking care of their children as schools and daycare centers are closed because of the lockdown.

It also has provision for a moratorium on student loans and for retired people.

Treasury Secretary Steven Mnuchin expected that most people would get their payments within three weeks.

Small businesses

Any business which has less than 500 employees are eligible for federally-guaranteed and tax-free loans. All operating costs of the business, including employee payroll, employee health care, mortgage, rent and debt payments are included in the loan. The loans can be forgiven if the business used the loan for covering these costs.

This scheme is to ensure businesses don’t fire employees because of the lockdown. Priority will be given to under-served and rural markets. $350 billion has been earmarked for this programme. 

Large corporations

For the large corporation, the act provides $500 billion in loans. It gives $25 billion for passenger airlines; $4 billion for carriers and $3 billion for aviation contractors. It provides $17 billion for "businesses critical to maintaining national security”.

The bill also mandates the creation of an oversight board and inspector general to oversee the loans given to large companies.

Hospitals would be given $130 billion while the hospitality industry and oil industry do not have specific allocations in the bill.

Key criticisms

Even though the act addresses key issues, it has been criticized for not doing enough. Progressives in the Democratic party said that it does not address the issues. They say it does not even cover testing and treatment for coronavirus, especially for those who got laid off. Most people in the US have employer-issued insurance and when they get laid off, they are no longer covered.

They add that it does not cover mortgages and other loans for individuals and the amount given will not be sufficient to pay bills if the lockdown extends for months.

They also say the act gives more importance to big corporate compared to small businesses and individuals. They want Congress to extend tax relief to support small businesses.

On the other side, some Republicans like Lindsey Graham and Tim Scott of South Carolina, Ben Sasse of Nebraska and Rick Scott of Florida believe that the federal government’s unemployment benefit would encourage companies to lay off workers and Americans to stay unemployed. Senator Bernie Sanders fought against the republicans about this, he slammed the Republicans for “undermining the deal”. He said, “That is the sad reality of where we are today."

Another criticism is that the Democrats did not secure at least $2 billion to help virus-proof the November elections. The package devotes $400 million to bolster vote by mail and early voting, expand facilities and hire more poll workers. Republicans opposed spending on balloting changes as they believed that the Democrats were trying to impose a one-size-fits-all solution on states.

As many as 13 States have postponed the primaries. Many of them are looking to hold elections on June 2, another Super Tuesday of sorts.

Trump has been leading the fight against the coronavirus. According to CNN's Poll of Polls, 47% approve and 48% disapprove of Trump’s handling of the presidency. When it comes to handling the coronavirus outbreak, Trump’s approval is even higher -- 52% to 45%. This is an improvement from CNN’s previous poll on this question last month, when 41% said they approved and 48% disapproved.

On the Democratic side, Sanders has been more active compared to former VP Joe Biden. The outbreak has endured both candidates move away from physical campaigns and both of them are recalibrating a more digital campaign.

Sanders has been more proactive in the fight against the virus, he has been asking his supporters to donate to NGOs that provide food for the poor, this apart from fighting for the poor on the floor. Biden, on the other hand, is still trying to figure out his response to the big crisis.

In the next podcast, I’ll bring you all the latest updates about the US elections. Till then, stay safe and practise social distancing.

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