SS+D COVID-19 Response Team: Coronavirus Update March 20, 2020
March 20, 2020 | Sebaly Shillito + Dyer
FEDERAL UPDATE – SENATE MAJORITY LEADER INTRODUCES “THIRD” EMERGENCY STIMULUS PACKAGE
Senator Mitch McConnell introduced the third emergency coronavirus stimulus package today, but much negotiation is still going on. The draft bill includes rebates for Americans based on the amount of income they reported on their 2018 tax returns. Under the bill, individuals who reported less than $75,000 in income would receive a rebate of
$1,200. Couples who filed separately and reported less than $150,000 would receive a rebate of $2,400. Another $500 would be added for every dependent child. Those who reported between $75,000 and $99,000 would receive a smaller benefit. Low-income Americans with at least $2,500 of qualified income, but who did not pay income tax, would receive $600 (or $1,200 for couples).
The final legislation is supposed to be drafted tomorrow. We will review it and provide you with summary information in a subsequent update.
FEDERAL UPDATE – NO INTEREST OR PENALTIES ON OWED TAXES UNTIL JULY 15TH
President Trump announced that if you owe taxes, then you can delay payment until July 15th without incurring interest charges or penalties. However, you must still file your tax return on time.
FEDERAL UPDATE – U.S.-CANADA BORDER REMAINS CLOSED TO “NON-ESSENTIAL TRAFFIC”; SIMILAR DEAL WITH MEXICO FINALIZED
President Trump announced today that non-essential travel between US and Mexico has been limited. Secretary of State Pompeo told reporters that both countries agreed to restrict non-essential travel. President Trump said that “lawful trade and commerce” will not be impacted. The U.S. – Canada Border remains closed at this time. We will continue to monitor and provide updates.
FEDERAL UPDATE – RELIEF FOR STUDENT LOAN BORROWERS
President Trump told reporters today that student loan borrowers will be able to suspend student loan payments for 60 days amid the coronavirus pandemic. He also added that the time period could be extended depending on how long the pandemic lasts. Lastly, President Trump promised a “break” on student loan interest. It is not clear what such a break will look like; we will continue to monitor the situation.
FEDERAL UPDATE – U.S. AUTOMAKERS OFFER TO MANUFACTURE CRITICAL MEDICAL EQUIPMENT
Automakers (Ford, GM, and Tesla) have offered to manufacture critical medical equipment. However, industry experts say retooling to do so would be difficult.
The Defense Production Act, invoked by President Trump on Wednesday, allows the administration to require and incentivize businesses to produce goods for the “national defense”. As far as SS+D is aware, no “rated orders” under the Defense Production Act have been issued. The response of U.S. automakers appears to be voluntary.
FEDERAL UPDATE – CERTAIN DISASTER RELIEF SBA LOANS MAY BE FORGIVEN
Senate Majority Leader Mitch McConnell said that certain Emergency SBA Loans that are used to retain workers or to cover basic operational expenses (like rent or a mortgage) “will convert to grants [that borrowers] will not need to pay back.” While that certainly seems like it could be a real lifesaver for many businesses, SS+D has yet to see such provisions actually in the text of any law or proposed law. We are not relying on Senator McConnell’s statements at this point.
If you are unfamiliar with the SBA’s emergency loan program, here is a brief summary:
- Yesterday, Ohio businesses were declared eligible to seek SBA emergency
- The SBA will be providing small businesses with loans of up to $2
- The loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of
- 75% interest rate for small businesses without credit available elsewhere; 2.75%. interest rate for non-profits.
- Up to 30-year terms.
- No collateral needed for loans up to $25,000.
- SBA intends to process each application in 2-3
- You can apply at https://disasterloan.sba.gov/ela.
We will provide more details on this important program in a subsequent standalone update.
STATE UPDATE – OHIO – NO LOCK DOWN YET.
While there is no lockdown order in Ohio at this time, Ohio BMV locations, barber shops, hair and nail salons, spas, and tattoo parlors, restaurants, bars, and gyms remain closed by order of the Ohio Department of Health.
STATE UPDATE – CALIFORNIA ON LOCKDOWN
Overnight, Governor Newsom of California ordered all 40 million Californians to stay home. Grocery stores, farmers markets, food banks, convenience stores, takeout and delivery restaurants, gas stations, pharmacies, laundromats and laundry services, banks, and essential government offices all remain open and are not effected by Newsom’s order. Californians are permitted to leave home to get food, care for a relative or friend, and to get necessary healthcare or critical medical supplies. Outdoor exercise and dog walking is also permitted, provided social distancing is maintained.
Importantly, the lockdown does not apply to critical infrastructure sectors identified by the federal government, nor does it apply to schools, childcare facilities, and the construction industry. The 16 critical infrastructure sectors identified by the federal government are:
- Commercial facilities
- Critical manufacturing
- Defense industrial base
- Emergency services
- Financial service
- Food and agriculture
- Government facilities
- Health care and public health
- Information technology
- Nuclear reactors, materials, and waste
- Transportation systems
- Water and wastewater systems
GENERAL STATUS UPDATE
The number of cases of coronavirus in the U.S. continues to rise significantly. There are a total of 15,219 cases in the United States, according to the CDC. Of those, 201 people have died. The best way to stay healthy is to follow the guidance of the CDC and continue to wash your hands regularly and practice social distancing.