Part of the $2 trillion emergency pandemic relief bill (CARES Act) is intended to help secure American employees and the businesses that employ them.  Secretary of Treasury, Steve Mnuchin, has made a number of public appearances adding some new information and details as to the mechanisms that are being planned to deploy these funds. In sum, the Secretary has noted that there are essentially three components in the new law related to employees:

(1) Small Business Loans: It is estimated about half of the businesses in the United States will be eligible to obtain small business loans to pay their employees for approximately (8) eight weeks (local banks are being enlisted as the delivery mechanism for those firms eligible);

(2) Enhanced Unemployment Insurance (UI): The law adds $600 to the normal state UI payment levels for a period of four months. (This has been controversial given the combined amount in some cases could exceed what an individual would normally receive if working). From all indications, employees would file through the normal state unemployment insurance mechanisms to be in line for these payments; and

(3) Individuals/Family Financial Support: The law provides individuals with incomes under $75,000 with a $1,200 payment, with a prorated amount up to $99,000. Couples who file a joint tax return can get up to $2,400 (income not exceeding $150,000) along with a $500 per child supplement.  The issue has been: how will these payments reach the eligible individuals?  The Secretary has provided some guidance and clarity on this point; namely, the government will look to the 2018 income tax returns.  Those eligible that filed and provided direct deposits banking information on their returns could begin seeing checks deposited to those accounts in about three weeks.  Those that had paper government checks sent to them in 2018, will have longer to wait, but can shorten the time by using a new web-based system that can be uploaded (when ready), so they can get their support sooner without waiting for checks to come in the mail from the IRS.

Finally, in addition to these three components the Federal Reserve has been authorized to spend $450 billion in loans, etc. to add liquidity to the market place in the hope of keeping firms/businesses afloat until some normalcy returns.