CARES Act Passed by Congress; on to President for Signature
Today, the US House of Representatives passed the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) by voice vote. This follows Senate passage of the CARES Act on March 25 by a vote of 96-0. Of the four Senators not voting, two were facing Coronavirus diagnoses and two were under self-quarantine. The bill will be signed by President Trump as soon as possible so that the new law may be enacted immediately. The $2-trillion-plus CARES Act is the largest ever economic relief/stimulus legislation. It is considered “Phase III” in Congress’ legislative response to the COVID-19 pandemic. The massive bill clocked in at over 800 pages. A section-by-section summary of the full bill is available here (PDF). There is a lot to unpack in this historic legislation, and PIA will continue to provide additional updates as compliance and guidance details emerge. Today, we will be providing summaries of provisions key to printing and graphic communications industry in this breaking news update.
CARES Act: Small Business Relief Provisions
Small business economic relief is a key part of the CARES Act. The centerpiece of small business assistance (eligible for employers with 500 or fewer employees) is the Paycheck Protection Program, which seeks to provide 8 weeks of cash-flow assistance through 100 federally guaranteed loans to small employers who maintain their payroll during this national emergency. The program would provide equal in to 250 percent of an employer’s payroll up to $10 million and could be used to cover payroll costs including salary, wages, and payment of cash tips; employee group health care benefits including insurance premiums; retirement contributions; and covered worker leave. If the employer maintains its payroll, then the portion of the loan used for the outlined purpose would be forgiven. For more details on the Paycheck Protection Program, see a one-page summary published by the US Senate Committee on Small Business here (PDF); a more detailed section-by-section summary of the small business relief section is available here (PDF).
CARES Act: Business Tax and Unemployment Provisions
The CARES Act addresses both unemployment and business tax policy. For example, the Act would allow the deferment of the employer portion of certain payroll taxes through the end of 2020. Note: Deferral is not provided to employers that avail themselves of the SBA loans designated for payroll protection. A modification on the treatment of net operating losses, the Alternative Minimum Tax, and other provisions are also included. Please see a summary of the tax and unemployment insurance section of the CARES Act here (PDF).
CARES Act: Individual Economic Assistance
The CARES Act also provides direct cash assistance known as “recovery checks” for all US residents with adjusted gross incomes under $75,000 ($112,500 for head of household and $150,000 married couples), plus an additional $500 per child. Recovery checks will be sent directly from the federal government to taxpayers. As a resource for PIA member companies that is suitable for sharing with employees, please find a FAQs published by the US Senate Finance Committee relating to this provision here.
USPS Emergency Assistance
The United States Postal Service is a critical delivery channel for a vast amount and array of printed and packaged products manufactured by PIA member companies. It is an essential government service in times of crisis, and PIA lobbied Congress to provide a direct cash appropriation, similar to what has been provided to other private sector industries such as airlines, to USPS as an independent agency within the federal government. While a bipartisan group of lawmakers put aside ideological differences to include a direct cash infusion in the legislation, the Trump Administration refused to grant the funds to USPS and instead revised the assistance to be in the form of a new line of credit ($10 billion).
This is a short-term victory as it throws a lifeline to USPS, which is reporting an 18-percent drop in entered mail this week as compared to the same week last year. However, simply extending more credit is not the best solution to what could be an impact to USPS greater than that of lost volume and revenue post-9/11 or post-2008 financial crisis. PIA is redoubling efforts to achieve more structural changes and financial stabilization such as full repeal of the onerous pre-funding of retiree health benefits requirement in the next phase of Congressional response to COVID-19.
PIA would like to give a special thank you to our industry’s Congressional champions on this issue: House Oversight Chair Rep. Carolyn Maloney (D-NY), Congressman Gerry Connolly (D-VA), Senate Homeland Security Chair Sen. Ron Johnson (R-WI), Ranking Member Sen. Gary Peters (D-MI), and Senator Tom Carper (D-DE).
Next Steps: White House, Implementation of New Law/Loans
President Trump is expected to sign the CARES Act immediately upon receipt. Then, implementation will begin. It’s important to note that individual agencies implementing the new law such as the Department of Treasury and Small Business Administration will issue guidance on how to utilize the programs and how to apply the new law to your business. There is generally a lag time between the President’s signature and the issuing of compliance or guidance, although the agencies are moving fast in response to the urgency of the pandemic and its consequences. On March 26, Treasury Secretary Mnuchin stated that he expected a lag time of about one week before loans via the Paycheck Protection Act would be available to small businesses. He also stated Treasury was easing regulations to allow the SBA loans to be available same-day, as well as expanding the list of lenders beyond the SBA to banks, credit unions and other financial institutions to provide greater access across the country.
Future Congressional Action on COVID-19 Response
Congress is expected to draft a Phase IV and possibly a Phase V legislative response that will focus on additional economic recovery. PIA will continue to press for provisions to mitigate the negative economic consequences of this pandemic to our industry.
What Can Printers Do?
Government response to the pandemic is changing day to day. The economic impact is mounting. It’s important that Congress hears from printers that the industry is taking a hit – but also working to manufacture essential printed material: financial, insurance and health care documents, mailed advertisements to support struggling retailers and restaurants that are adapting to curbside and delivery models, as well as critical government information regarding public safety, elections and more. Take a moment to email your lawmakers to let them know your company’s specific concerns and needs as well as what you are doing to keep commerce alive during this challenging time.
Michael Makin was appointed President and CEO of Printing Industries of America on August 1, 2002. Born and raised in Montreal, Makin attended Carleton University in Ottawa where graduated with honors with a degree in Journalism in 1986. He also holds an MBA from the University of Phoenix. After a brief stint as a reporter and public affairs officer with the Canadian government, he began his career in association management 20 years ago. Prior to joining Printing Industries of America, Makin was President of the Canadian Printing Industries Association and for almost 10 years served as an executive with the Canadian Construction Association.