The Overlooked and Obscure in the CARES Act
March 27, 2020
Well, we finally have the final FINAL final version of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which has been passed by the Senate and House. Policymakers and pundits have already poured over its 880 pages, mainly analyzing the major provisions illustrated by the Taxpayers Protection Alliance (TPA) here. But there’s far more to this $2.2 trillion bill than “recovery rebates” to individuals and families and small business loans. Here are some of the major and minor provisions you may have overlooked:
$10.5 Billion in Defense Department funding.
The U.S. military community is certainly not immune to COVID-19. At the time of writing there’s more than 400 cases of the Coronavirus being tracked among service members, family members, and civilian DOD employees. The Army is already looking for medical service personnel to come back on active duty voluntarily, and new CARES Act funding will give all branches of the U.S. military greater resources to recruit healthcare personnel and procure essential supplies. There’s also nearly $1.5 billion allocated to the National Guard for their continued critical response on the home front. Since the start of the pandemic, National Guard members have been busy disinfecting public areas, delivering supplies to American households, and helping test for new cases of COVID-19.
As with any Defense spending bill, however, there are myriad opportunities for waste and abuse. The single largest recipient of Defense funding in the CARES Act is the Defense Health Program ($3.4 billion). Back in 2015, then-SASC Chairman John McCain (R-Ariz.) rightly pointed out that “over the past two decades, lawmakers have appropriated nearly $7.3 billion for medical research that was ‘totally unrelated’ to the military.” The most recent Defense bill (FY 2020 Defense Appropriations Act) was filled with unnecessary Defense Health spending that Congress didn’t even ask for, such as $30 million for orthopedic research and $7 million for tickborne disease research. While there is language in the CARES Act directing these resources toward Coronavirus research, Congress should insist on maintaining scrutiny on the notoriously opaque Defense Department.
$10 Billion in extended borrowing authority for the U.S. Postal Service (USPS).
Declining mail volume amid a turbulent economy doesn’t bode well for the USPS, which lost nearly $9 billion in fiscal year (FY) 2019 and has more than $140 billion in unfunded liabilities. Before the Coronavirus, the beleaguered agency was due to run out of cash by 2024. But, this unprecedented pandemic has moved up the day of reckoning and the USPS may run out of funds by June absent significant relief. The CARES Act offers the USPS the option to borrow up to $10 billion more from the U.S. Treasury to finance current operations and continue to pay staff and maintain mail deliveries.
This legislative language is a significant improvement from House Speaker Nancy Pelosi’s (D-Calif.) “ideological wish list” bill which would have given $25 billion in taxpayer money to the USPS in addition to forgiving the agency’s current $11 billion debt to the Treasury and allowing another $15 billion in extended borrowing authority. Temporary relief can get the USPS back on track, without writing a blank check for the agency’s reckless spending practices.
$10 Billion in grants to airports.
By now, it’s been widely reported that the CARES Act includes $61 billion relief for air carriers. Nearly half of this ($29 billion) consists of loans and loan guarantees for passenger and cargo air carriers, while the remaining $32 billion consists of direct payroll grants to support aviation workers and contractors. But just as airlines have struggled to attract consumers amid government travel bans and public health concerns, airports have seen correspondingly less passenger traffic.
The CARES Act makes $10 billion available for airports in order to “prevent, prepare for, and respond to coronavirus.” These funds will be disbursed based on airports’ national share of enplanements as well as current financials and debt service. For primary or hub airports, eligibility for these funds is contingent on facilities keeping on at least 90 percent of their workforce through the end of the year. Federal funding is expected to provide a significant supplement to passenger facility charges, which are baked into airfare prices and help pay for airports’ infrastructure and payroll costs.
- $100 million to the Federal Prison System.
- $75 million to the Corporation for Public Broadcasting, which helps fund National Public Radio (NPR).
- $75 million each to the National Endowment for the Arts and the National Endowment for the Humanities.
- $25 million in additional salaries and expenses for the House of Representatives.
- $25 million to the John F. Kennedy Center for the Performing Arts.
The bill also….
- Removes (through the end of the year) a $13.50 per proof gallon federal excise tax paid by distillers on alcohol used to make hand sanitizer.
- Allows pre-tax Health Savings Account (HSA) dollars to be used for menstrual care products.
- Establishes an “Office of the Special Inspector General for Pandemic Recovery” within the Treasury Department to monitor the disbursement of funds in the legislation.
- Includes the “Treatment of Sunscreen Innovation Act.” What does it do? You tell us (pg. 470).