I'm Virginia Prescott with the "What You Need To Know Coronavirus," web series from
GPB. On Friday the President signed the largest fiscal stimulus package in
modern American history, The Cares Act was signed into law, a 2.2 trillion
dollar infusion to address the staggering consequences of shutting down
businesses and self-isolation due to COVID -19. Well we're getting some
perspective on what that money means for Georgians, individuals, small businesses,
and corporations here in Georgia and in the country with Jeffrey Dorfman, whose
State Fiscal Economist. Thank you so much for taking the time. Happy to be with you.
The economic rescue plan promises a one-time direct stimulus payment of
$1,200 to adults making up to $75,000, $2,400 to
married couples whose combined income goes up to $150,000,
and $500 payments per child. Do people have to
apply for this check? They do not have to apply for the check they simply need to
have filed taxes. So if you file taxes in 2018 or 2019, meaning either the last tax
filing season or this one, you will automatically get the money. So those
will go into direct deposit, if you are signed up with the IRS for direct
deposit. Can people go back and do that now even if they didn't during the last
tax season? If they have not filed this year's taxes yet, they should file this
year's taxes now, If they can. Use direct deposit instructions and they'll get
their money faster. If you didn't do direct deposit the IRS will first verify
your address with you by mail and then send you a check. When can people expect
to receive these checks? Treasury Secretary, Steven Mnuchin said maybe
within three weeks. What is that looking like now? Yea, they think they'll be able
to start for people where they have direct deposit information they may be
able to start getting money out the door as soon as next week and then it will
take a little while they can't issue all of them in one day. How about those
receiving Social Security or disability benefits or payments from the government,
will they also get this direct stimulus check? They will, any way that the
government knows your bank information. So if you are on Social Security and
they direct deposit your social security benefits
they will use that bank account to direct deposit this money, if they don't
have information from your taxes. Let's look at unemployment, $3.3 million, a record
number of people filed unemployment claims last week. For some perspective
that's nearly five times the number of the worst week during the Great
Recession of 2008, so who is going to receive unemployment benefits under this
plan? Everybody who normally would receive unemployment is eligible under
this plan, plus two other groups. Workers who are not fired but are on unpaid
leave, so if your business said look I just can't pay you, I don't need you to
work right now but I'm not firing you they're now allowed to actually file
unemployment claims for you. They can even file what are called partial claims
if, for example you work in a restaurant it can now only do takeout and they're
only giving you 10 hours a week instead of 40, you can collect a partial
unemployment claim and then they've also opened a new program up to gig workers
and self-employed people. How much are people going to get for benefits? So you
would get a normal unemployment benefit which in Georgia maxes out at $380
a week. So how close to that maximum you get, depends on
how much you are earning and paying in before, plus Congress is adding an extra
$600 a week in bonus payments. So some people in Georgia will get almost $1,000
a week. So are these people who are just unemployed because of coronavirus will
they have to prove that? No, this is essentially everybody who is currently
unemployed or on unpaid leave is assumed to be affected by the virus. How long
will these benefits last? So I think Congress and The Cares Act included
enough money for three months and then if we're not all open for business again
by then I assume they will extend it further. Alright how about small
businesses that's a significant part of this Act? Half of small businesses in the
country have less than 15 days of cash buffer and there
900,000 small businesses in Georgia, employing about 1.9 million people. How
much will be available to these businesses? So we- there's over three
hundred and fifty billion dollars available nationwide through the Small
Business Administration for small businesses. So Georgia's share of that is
over ten billion dollars and small businesses can apply for an emergency
loan through any bank that has ever done Small Business Administration guaranteed
loans in the past or any bank that hasn't done them in the past but wants
to sign up now. So virtually every bank in the state should be part of this
program, you can also go directly through the SBA. You file a very simple
application that demonstrates what your payroll and expenses have been in the
past 12 months and you can get money to cover your payroll, your rent, and your
utilities for two months. It's a six-month low-interest loan and if by
the end of the six months you document you use the loan to keep your workers
employed, the government forgives your loan and you never have to pay it back.
Is there a ceiling on the amount that one can borrow? No, there is no ceiling.
And that's part of the point, you said people who can do businesses rather that
continue to pay those on their payroll that is one of the conditions that this
loan you have to keep your employees employed? Yeah you're supposed to
maintain I believe 90 percent. So it's okay if your payroll go down a little
bit, but you're supposed to maintain 90 percent. The idea is, here that the
government thinks it is less disruptive to continue to pay workers through their
businesses, than businesses to lay them all off and then the government has to
pay them unemployment anyway. Sorry I was just to say this way there's
less disruption, people stay attached to their businesses, the businesses can
operate a little bit and it'll be easier to get the economy going again when this
is over. Now Governor Kemp announced in late March that small
businesses and nonprofits can also file for up to two million dollars in low
income economic injury disaster loans from the federal SBA to cover some of
their fixed debts. Is that program going to continue or is
this Cares Act and the emergency relief funds going to take over? Both
of them operate simultaneously, I think most businesses will now choose
the new program under The Cares Act because their loans will be forgiven as
long as they maintain the payroll. Okay so this- the amount 2.2 trillion, dwarfs
previous Washington efforts for economic crises and natural disasters for that
point. In the 2008 Wall Street bailout and President Barack Obama's first year
economic Recovery Act. How about for corporations, of course the airline
industry, all of those corporations headquartered here in Georgia. How- what
is going to be the process for them to apply for these funds? Sure so there's
about 500 billion dollars in the package for larger corporations. So small
business means under 500 employees and then for the ones that are over 500
employees there's another pot of money for them and that's gonna be dealt with
by the Federal Reserve Bank and the Treasury. So those two agencies
will decide, there isn't so much a formal process that's more a case-by-case basis
where they're gonna talk to the CEOs and the other officials from those big
companies and figure out what people need. What are the conditions of these-
the loans for big businesses or big corporations? So that's less clear, we
know they're gonna have to have limits on executive compensation. They're gonna
have to stop stock buybacks while they have this money but
because they're gonna do it on a case-by-case basis I think the exact
restrictions on that money may differ company by company. So we won't know all
the conditions until we see what deals are made. That 500 - 500
billion dollar fund to be administered by the Federal Reserve and the Treasury
Department was one of the sticking points in between Democrats and
Republicans about whether or not this would pass. How were they were to resolve
that? They resolved it two ways: I think one just by realizing how bad
things would be if they didn't act. So I think Democrats gave in on a lot of
things they wanted to see and and second they added more safeguards,
some more transparency, an inspector general to watch over things. So you know
there was a combination of putting some extra safeguards in the bill and also
just deciding that something was better you know not to make the perfect the
enemy of the pretty good. Before taking this job as State Fiscal Officer you
were a professor of economics and also dealt a lot with agriculture. Anything
particular in this bill that you see that would be a great relief to farmers
who've already been hard hit by a couple of years of bad weather? Yeah there is
some money in this bill to help farmers. The main thing farmers need right now
and really everybody in our food industry, from the person who sells
inputs to farmers, to the farmers, to the food processors, to the truckers and the
wholesalers and the distributors and then the grocery stores and the food
retailers and restaurants. What they really need is just to be given the
exemptions from regulations necessary so they can keep doing their job during
this crisis and keep us all fed. Right, we need to remember that while were staying
in our homes doing our part to keep people safe and healthy there's a lot of
people in our economy who have to keep going to work because we need the stuff
they produce right, we need to be able to buy that food, we need to be able to get
our drugs, we need to have gas at the gas station if we need it, we need our
utilities to keep running, so those people are really sacrificing for us
right now and sometimes they're going to need some relief from regulations and
they're gonna need some understanding and we have to make sure we don't shut
things down that are vital parts of our food industry supply chain. But if we can
help them with things like that then I'm sure they can keep us fed and supplied
during this time. Part of this plan is to help ease a rebounding of the economy. Do
you think that they got that right? I know there was a lot of back-and-forth
about how to best do that, whether or not to just pay workers directly or to pay
companies to employ people. What do you think? How did how did they do? I mean
I guess if I were grading them, I would guess they probably didn't do very well.
Congress doesn't usually do very well but they're being pretty responsive,
they're trying, and I think most of the stuff we need is in there. I think we're
wasting a lot of money on stuff we didn't need in there. Like what? I mean to me
the smart thing is to keep workers getting paid. I would have funneled
pretty much all the money to businesses in exchange for them maintaining their
payroll. For example, we're sending these payments out to people
that are both losing their jobs and not losing their jobs. If you still have your
jobs and you're- you know you work for a small business they get this loan
they maintain payroll. Why are we sending you a couple of thousand dollar check
then? You haven't lost any money but because the government is not set up
to respond in a targeted manner the only choice we have is to essentially waste
money in order to get the money to the people who need it. We can't separate out
those who need the help and those who don't, and the easiest thing is pretty much
said to everybody money. Jeffry Dorfman, he is State Fiscal Economist, I thank you
so much for your time. Happy to be with you. Now you can stay up to date with how
GPB is covering COVID -19 news, resources and other "What You Need To Know," videos,
all of that all of that is at GPB.org/Virus.