Congress’ response to the economic consequences of the coronavirus should be targeted, temporary, and directed at public health efforts while limiting politically motivated bailouts and abuse.

Unfortunately, the Senate’s version of the CARES Act, which continues to be held up amid political fights, misses this mark by including special benefits to specific industries that will exceed $200 billion.

And that’s not the only thing wrong with the legislation. The $1,200 checks going out to most Americans will add substantially to our debt—while providing taxpayer funds to plenty of people who don’t need more money.

The legislation also gives the Treasury Department too much control over huge loans to businesses—loans that don’t come with enough strings to ensure they’re strictly used for business situations caused by COVID-19. And lastly, the bill doesn’t provide enough for employees of larger corporations, who are also being affected by the coronavirus pandemic.

However, the bill does provide many sound tax provisions and important supports to keep employees attached to the labor force. This is crucial to limiting both the short- and long-term economic consequences of COVID-19.

Although Democrats blocked the Senate’s version of the CARES Act on Sunday and political debates continued Monday, many of its components—or modified versions of them—are likely to become law.

Here’s what the CARES Act, if passed, could mean for American workers, families, and businesses:

Preserving Jobs and Incomes

Several measures are aimed at helping workers stay connected to their employers instead of losing their jobs. Keeping workers employed both maintains income levels amid workplace disruptions and avoids unemployment that can cause or exacerbate an economic downturn, including significant long-term costs and consequences on workers, employers, and government budgets.

On the whole, these provisions provide targeted relief to businesses and workers who, through no fault of their own, have experienced significant income and workplace disruptions due to COVID-19. These provisions, listed here, are only applicable to employers with fewer than 500 employees:

1. Faster Access for Employers to Credits for Paid Sick and Family Leave. The Families First Coronavirus Response Act—the last COVID-19 response bill Congress passed—mandated that employers with fewer than 500 employees provide 10 days of fully-paid sick leave and up to 50 days of partially-paid family leave for workers directly affected by the COVID-19 illness (including ill family members and workers staying home with children due to school and daycare closures).

In exchange, employers can reclaim the amount paid out in sick and family leave, but those credits might not actually come through until months or a year from now.

However, with only a 27-day median cash buffer, most small businesses don’t have the cash flow to continue paying workers who aren’t doing any work, and thus aren’t producing any value for the company, so the only alternative is to lay off workers or close the business for good.

The CARES Act provides for advance refunding of paid sick and family leave credits so that employers can get the money they need to provide paid leave in the near-term.

2. Business Loans and Forgiveness for COVID-19 Business Interruption. The CARES Act provides about $300 billion in loans to address “small business concerns,” covering a wide range of impacts from supply disruptions to decreased sales and closures.

A large portion of the loans would be forgiven, including payroll and compensation costs, rent or mortgage payments, utilities, and debt service payments. Businesses could receive a maximum of two and a half months worth of payroll costs, up to a maximum of $10 million, but forgiveness would be proportional based on how many employees the employer retained compared to its pre-COVID-19 levels.

3. Incentive to Rehire Workers. Employers can receive credits and loan forgiveness for pay provided to workers who were laid off on March 1 or later if they rehire and pay them.

4. Delayed Tax Filings. Businesses have three additional months to file their taxes, with the April 15 deadline pushed back to July 15. Businesses can also delay paying their portion of employees’ payroll taxes to help them bridge these difficult times.

Individuals and Households

The CARES Act includes several measures aimed at helping American families and individuals:

5. Added Federal Unemployment Insurance Benefits. For workers who are either not eligible for or have exhausted their regular unemployment insurance benefits, the federal government will provide widespread eligibility to added unemployment benefits.

Many workers would otherwise be excluded, including, among other reasons: those who have to quit their jobs for COVID-19-related reasons; individuals whose places of employment closed or can no longer provide them work; and the self-employed. Now anyone who quit or lost their job because of such circumstances would be eligible for unemployment benefits.

Additional federal funding is also provided for state unemployment benefits.

6. Non-Targeted Checks to Households. The CARES Act provides “rebates” that amount to cash payments of $1,200 per individual, $2,400 per married couple, plus $500 per child, with phaseouts beginning at incomes of $75,000 for individuals and $150,000 for married couples.

Checks to everyone are not the appropriate response as many workers continue to receive their paychecks, while others have endured significantly larger financial losses as a result of COVID-19. For instance, a restaurant worker may have lost her job, while an accountant who is able to work from home may have had no change of circumstances.  

Economic support to help bridge the current disruptions should be targeted and directed first at keeping Americans attached to their current jobs as long as possible.

7. Temporary Relief From Retirement Account Withdrawal Penalties. The CARES Act allows individuals to withdraw up to $100,000 penalty-free from their retirement accounts through the end of 2020. This provision will help individuals who experience financial hardships and disruptions due to COVID-19 to access their own money without penalty.

8. Temporary Elimination of Required Minimum Distributions. By waiving the required minimum distributions from retirement accounts for individuals who are 72 and older, the CARES Act would provide the opportunity for individuals who do not need their money now to hopefully recoup some of what they’ve lost when the markets recover.

9. Added Charitable Deduction. To promote charitable giving that is otherwise likely to decline amid the COVID-19 emergency, the CARES Act allows a $300 above-the-line tax deduction. This allows the majority of Americans who do not itemize their taxes to receive a financial benefit from some of their charitable donations.

10. Delayed Tax Filings. Individuals have three additional months to file their taxes, with the April 15 deadline pushed back to July 15.

Big Businesses

Amid concerns of bailouts, here’s what you need to know about what the CARES Act would do for larger businesses:

11. Massive Loans, Significant Discretion, Limited Conditions. The CARES Act provides up to $500 billion in loans to businesses, states, and municipalities that have incurred or expect to incur COVID-19-related losses that jeopardize the business’s operations.

Specifically, $50 billion is provided to passenger air carriers, $8 billion to cargo air carriers, and $17 billion for businesses critical to maintaining national security. The loans are at low, federal-borrowing interest rates, are available for a period of no more than five years, and require employers to maintain existing employment if practicable.

The act arguably provides too much discretion to the Treasury Department and too few conditions on businesses to ensure loans are related to COVID-19 conditions. The loans are not supposed to be forgiven.

12. Nothing for Workers of Large Employers. While the CARES Act provides substantial support and access to paid sick and family leave to workers of smaller employers, it does nothing to directly support workers of large employers. This includes some of the most significantly affected workers in the travel and tourism industries. 

13. New Federal Reserve Authority. The CARES Act creates a new $400 billion authority for the Federal Reserve to expand lending programs using collateral (such as Treasury loan guarantees), but because the Federal Reserve already has the ability to generate broad-based loan programs, it’s unlikely to need or use this new provision.

Overall, the CARES Act takes substantial measures to help maintain employment and prevent business failures for smaller employers, but does little to help workers of larger employers.

The act provides significant financial relief to businesses and households, including important retirement relief, but the biggest component—non-targeted checks to households—will be inefficient and leave Americans with a greater debt burden than necessary.

Finally, the components to big businesses should be aimed at supporting workers and helping companies return to pre-COVID-19 operations as quickly as possible once the public health emergency dissipates. 

This bill has some good measures. But conservatives are right to be concerned that it borders on bailouts for big businesses and puts taxpayer dollars to ineffective use.