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Jim Probasco has 30+ years of experience writing for online, print, radio, and television media, including PBS. His expertise includes government programs and policy, retirement planning, insurance, family finance, home ownership and loans. He has a bachelor's from Ohio University and Master's from Wright State University in music education.
Updated November 30, 2022This $484 billion relief bill, officially known as the "Paycheck Protection Program and Health Care Enhancement Act" was signed into law by former President Trump on April 24, 2020.
The legislation added money to existing programs that have either run out of money or are deemed underfunded. It increased funding for the Paycheck Protection Program, Economic Injury Disaster Loan (EIDL) program, including emergency grants, and included new hospital and health care funding as well as additional testing.
The bill provided $370 billion in small business funding including $310 billion to the Paycheck Protection Program (PPP). Of the $310 billion, approximately $60 billion was aimed at small, medium, and community lenders with assets ranging from less than $10 billion up to $50 billion.
An additional $60 billion was added in April 2020 to the Economic Injury Disaster Loan (EIDL) program which, like PPP, was depleted. This was in addition to a $75 billion appropriation for hospitals and $25 billion for testing.
Most of the balance of about $14 billion went toward administrative costs, making the package total $484 billion.
Approximately $310 billion was used to refresh the Paycheck Protection Program, which offers forgivable government-backed private loans, provided companies retain their workforce.
PPP loans of up to $10 million to cover eight weeks of expenses do not have to be paid back if at least 75% of the money is spent on rehiring and keeping employees. Otherwise, the loan comes with a 1% interest rate and must be repaid within two years.
The PPP was so popular it ran out of funds on April 16, 2020, prompting criticism over who did and did not receive forgivable loans. As a result, the new legislation included a set-aside of at least $60 billion of the $370 billion for small lenders, including community banks, credit unions, and community development financial institutions. This set-aside was carved out of the $310 billion PPP allocation.
The small lender set-aside contains no guidance for who gets the loans—only that small lenders get access to the funds.
Another $60 billion went to the existing SBA Economic Injury Disaster Loan (EIDL) program, which offered loans of up to $2 million to companies with fewer than 500 employees. This money could be used to pay off debt, provide payroll, and pay other bills.
One of the main attractions of the EIDL program is the potential to receive an up-to-$10,000 ($1,000 per employee) advance on an EIDL loan within three days: $10 billion of the $60 billion authorization for EIDL went toward these loan advances.
The $75 billion allocated by the new legislation was directed to the U.S. Department of Health and Human Services (HHS) to reimburse providers for the cost of treating COVID-19 patients. This included funding to provide diagnosis, testing, and care of these individuals.
Finally, $25 billion was authorized to help develop and implement a national plan to helps states with testing protocols. The funds were further broken down by various jurisdictions and groups including states, localities, tribes, the CDC, National Institutes of Health and others. Areas of concentration included not only testing and contact testing for COVID-19 in individuals but also testing for possible immunity.
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The Foreign Bank Supervision Enhancement Act (FBSEA) increased the Federal Reserve's authority over foreign banks seeking entry into the United States.
The Rural Electrification Act provided electricity to millions of rural Americans in the 1930s and is paving the way to expand Internet access today.
Welfare state refers to a concept of government in which the state plays a key role in the economic and social well-being of its citizens.
Indentured servitude is a form of labor in which an individual is under contract to work without a salary for a certain timeframe to repay a loan.
Capital control is an action taken by a government, central bank, or regulatory body to limit the flow of foreign capital in and out of a domestic economy.
The Food and Drug Administration is a government agency that regulates certain food, drugs, cosmetics, and medical products.
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