As of September 1, 2020, roughly $2.59 trillion in new budgetary resources have been made available for federal agencies to respond to the pandemic. Agencies can use this funding for contracts, grants, loans, and other assistance, as well as direct payments like the Economic Impact Payments (EIP) appropriated in Phase 3.
In addition to granting new agency funding, the legislation also mandated the government defer and reduce taxes to provide relief to individuals and businesses. As an example, this includes payroll tax deferrals, which means companies can postpone the deposit and payment of the employer’s share of Social Security taxes. The Congressional Budget Office (CBO) estimated the two-year impact will be over $902 billion in tax relief.
The four laws included funding for credit, loans and loan guarantee programs, which could result in an estimated total of $3.92 trillion in total lending.1 As of September 1, 2020, $809 billion in credit, loans and loan guarantees have been reported and more than $3 trillion remain available. This includes the Federal Reserve’s emergency lending facilities, which have reported $86 billion utilized out of $2.3 trillion in potential credit.
The CARES Act and other supplemental legislation are providing financial relief in response to the pandemic through agency funding, tax deferrals, and lending. While the total impact of this legislation may not be measured until years from now, agencies are already playing a critical role by disbursing the $2.59 trillion in funding allocated through the appropriations process. Next, we look at the process of how funds are spent, from Congressional appropriations to payments to individuals and businesses.