What Does COVID-19 Legislation Mean for Manufacturing?
Wednesday, April 1, 2020
Posted by: Janie Drake
This message comes to you from SAMPE's PaGE (Public & Government Engagement) Committee.
In March, President Donald Trump signed the third stimulus package as a response to the novel coronavirus (COVID-19) global pandemic. The Coronavirus Aid, Relief, and Economic Security Act — or CARES Act — pumped $2 trillion into the economy for workers, small business owners, and corporations.
A brief by the U.S. Senate Committee on Small Business & Entrepreneurship detailed ways in which the Small Business Administration (SBA) can and cannot help small business owners. The bill includes $10 billion for grants of up to $10,000 to protect operating costs for businesses with fewer than 500 employees.
Furthermore, $350 billion is allotted for the SBA to loan up to $10 million at a 4% interest rate to a business to maintain payroll and rent or mortgage. Allowable uses of the loan includes payroll costs, sick leave, retirement and healthcare benefits, rent, utilities, and interest on debt. Eligible contractors — employees or subcontractors cannot perform work on site and cannot telework due to federal facilities closing — can be reimbursed at a “billing rate of up to 40 hours per week.”
The Pandemic Unemployment Assistance program authorized by the bill creates a monetary relief fund for contractors, gig workers, and freelancers who generally cannot apply for unemployment.
The bill allocates approximately $500 billion in loans and other funding for larger corporations, such as those in the automotive and airline industries. Major airlines will receive $58 billion in aid, with half supporting payroll grants and half as a loan. “One portion of that money is set aside to help cover employee wages, salaries and benefits divided up as up to $25 billion for passenger air carriers, up to $4 billion for cargo air carriers, and up to $3 billion for airline contractors,” Kelsey Snell reported for NPR. As a condition of the loan, airlines cannot lay off workers through September and stock buy-backs are forbidden for the duration of the loan plus an additional year. Until the loan is repaid, the government will have an equity interest in the company.
There were no funds earmarked specifically for the automotive industry, however. In the meantime, automakers are contributing to relief efforts; Ford has teamed up with 3M, GE, and UAW to “manufacture at scale Powered Air-Purifying Respirators (PAPRs),” “expand production of … GE Healthcare’s existing ventilator design,” and “assemble more than 100,000 critically needed face shields per week … to help medical professionals.” Additionally, the economic relief package supplies $17 billion to businesses “critical to maintaining national security.” According to Business Insider, “Boeing is reported to be the intended recipient for a large portion of the amount.”
Congress also appropriated $27 billion for a Public Health and Social Services Emergency Fund as part of the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020. Portions of the fund, available until September 30, 2024, are reserved for “technologies with U.S.-based manufacturing capabilities,” which includes “initial advanced manufacturing, novel dispensing, enhancements to the U.S. Commissioned Corps, and other preparedness and response activities.” These funds “may be used for grants for the construction, alteration, or renovation of non-Federally owned facilities to improve preparedness and response capability at the State [sic] and local level.”