June 10, 2020 – The United States continues to lose thousands of lives and millions of jobs each week to the coronavirus pandemic. States have begun to reopen as President Donald Trump has demanded, but his administration’s promises of adequate safety have not materialized. Indeed, the Trump administration seems to have all but forgotten about the ongoing pandemic. Now, as federal support and guidance is needed more than ever, a stark policy difference has emerged, with President Trump and Senate Majority Leader Mitch McConnell (R-KY) on one side and the U.S. House of Representatives, supported by the U.S. Senate minority, on the other.
These twin crises are intertwined: Restarting and rebuilding the economy depends on effectively managing the public health crisis first. Without adequate protections, the economic recovery will be prolonged and stunted as Americans are unable to fully engage in the economy.
More than 37 million Americans have filed for unemployment since the beginning of March. The official national unemployment rate was slightly less than 15 percent in April—the highest since the Great Depression—but the real figure has likely already surpassed the 20 percent mark and almost certainly will rise further. The nonpartisan Congressional Budget Office projects Americans will suffer from double-digit unemployment rates through the end of 2021.
In the face of this unprecedented crisis caused by COVID-19, Sen. McConnell has said, “I don’t think we have yet felt the urgency of acting immediately,” and House Minority Leader Kevin McCarthy (R-CA) said, “I don’t see the need right now.” Meanwhile, White House economist Kevin Hassett claimed the Trump administration has “a little bit of a luxury to watch and see” before further action on the economy and public health.
By failing to address the public health and economic crises as soon as possible, Trump and McConnell are embracing positions that leave the American people on their own—doing little to help and seeking to force Americans back to work while failing to keep them safe. Meanwhile, House leadership is aggressively trying to gain control of the public health crisis to make Americans feel safe in returning to their usual habits. This will help American families, workers, and small businesses endure while the federal government does its job.
The distinction between these approaches is not rhetorical: On every key question facing the American people, one approach meets the dire need, and one leaves workers to fend for themselves.
Whether the plan to reopen protects workers and ensures testing and contact tracing to make the economy safe
The American economy cannot truly recover until it is safe for Americans to resume engaging in the economy—from shopping in retail stores to dining in restaurants to visiting hair salons—both as workers and as consumers. The American people overwhelmingly understand that it is still dangerous to return to many workplaces when there is insufficient testing across the country and inadequate efforts to ramp up contact tracing in order to protect people and monitor new flare-ups. The White House promised 27 million tests by the end of March, yet it took until nearly mid-May to surpass 10 million tests. Less than 5 percent of Americans have been tested months into the crisis.
House leadership approach: The House’s approach is to provide resources and protections to workers and consumers. If passed, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act would provide another $75 billion to help scale up testing, contact tracing, and treatment. It would protect both businesses and workers by requiring the Occupational Safety and Health Administration (OSHA) to issue a strong, enforceable standard within seven days of the bill’s enactment and to prevent employers from retaliating against workers who report infection control problems. The House legislation would continue to expand paid leave so workers could recover from illness and co-workers could be assured nobody in the workplace is being forced into work if there is any risk of them spreading the virus.
President Trump and Senate Majority Leader McConnell’s approach: Their approach is to provide companies with immunity from liability in the event that the companies’ workers get sick, stripping workers of their legal protections. Trump and McConnell plan is to shield businesses from lawsuits should the companies endanger the health of their workers, while at the same time denying those same workers the option to continue receiving unemployment insurance should they feel unsafe at work. Although Americans—including those who have lost their jobs or been furloughed—overwhelmingly recognize it is premature to return to work safely, the Trump-McConnell approach aims to box them in with no recourse for the health of workers or their families. Trump and McConnell also leave testing to the states, creating a patchwork of rules and regulations that will only lead to confusion and prolong the pandemic.
Whether the plan allows states and localities to sustain basic services
State and local budgets have been drained to a historic degree by both states’ response to fighting the coronavirus pandemic and the massive decline in revenue from sales taxes not being generated, among other losses sustained by economic shutdowns in line with President Trump’s guidelines. State governments could face an estimated $500 billion shortfall in one year, while local governments are facing projected revenue losses of $361 billion over the next three years. In March alone, 980,000 government employees lost their jobs, representing 4.3 percent of the total government workforce. While it is assumed that these, much like other layoffs that have occurred in the past months, are temporary, they would become permanent should state and local governments not receive the funding needed to make up the projected revenue shortfalls.
House Leadership approach: The HEROES Act would provide $1 trillion in much-needed assistance to state, local, territorial, and tribal governments. These funds would pay the wages of nurses, teachers, firefighters, and police officers and would ensure that power plants and water processing systems are properly staffed and functioning smoothly. Now more than ever, these jobs are essential to ensuring that the current economic downturn does not turn into a full-blown, multiyear depression.
President Trump and Senate Majority Leader McConnell’s approach: Their plan would let states go bankrupt and allow all the temporary government layoffs to become permanent. Sen. McConnell has remained strongly opposed to providing aid to state and local governments, stating that he does not want a “blue state bailout.”
Whether the plan sustains small businesses and keeps workers on payroll
All available evidence suggests that the Trump administration and major banks have overwhelmingly disbursed aid meant for small businesses toward larger and more well-connected businesses. As the Small Business Administration’s inspector general documented, the reliance on established relationships between companies and banks inherently tilted the scales toward larger businesses, and the Trump administration did not follow legislative requirements outlined in the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act to ensure equitable distribution of loans. Nearly 300 publicly traded companies received $1 billion in funding from the first round of loans, while 80 percent of applicants received nothing. As a result, a large percentage of small, neighborhood, and minority-run businesses have been left on their own.
House leadership approach: The House’s plan would ensure that small-business owners would get the help they need by strengthening the Payroll Protection Program, allowing previously ineligible businesses and nonprofits to apply for the program’s benefits and providing flexibility in application and payment deferral timelines. The House rightfully understands that small businesses are the backbone of the American economy, and as such, it has included provisions in the HEROES Act that would provide additional funding for coronavirus emergency grants and carve out funding for community financial institutions and businesses with 10 or fewer employees.
President Trump and Senate Majority Leader McConnell’s approach: Their plan would leave small businesses on their own and continue to provide large corporations and Trump-affiliated businesses with government funding.
Whether hazard pay would be provided for front-line workers who have risked their lives to fight the coronavirus
Essential workers who have kept the country’s health care system and society functioning throughout this crisis have risked their lives while so many residents have been asked to stay safely at home.
House leadership approach: The HEROES Act would provide essential workers with the support they need to make sure the country can fight the coronavirus pandemic. This would include providing all essential workers with $13 per hour of hazard pay on top of regular wages and allocating more than $12 billion in Social Services Block Grants, $850 million of which would fund child and family care for essential workers. The HEROES Act would also mandate the creation of an OSHA temporary exposure control plan to protect workers from coming in contact with the coronavirus.
President Trump and Senate Majority Leader McConnell’s approach: Trump and McConnell’s plan would continue to put essential workers in harm’s way and delay rewarding the sacrifices these workers make to keep the country running smoothly. It would also ensure that employers who force people back to work or engage in negligent behavior are protected against lawsuits.
Whether health coverage is ensured for the sick and those most vulnerable to the virus
As tens of millions of Americans lose their jobs, most are also losing their health care coverage at the same time—putting them at even greater risk in the midst of a pandemic. Millions more have been denied access to health care because states refused to expand Medicaid.
House leadership approach: The HEROES Act would make health care more accessible and provide free treatment for COVID-19-related illnesses. It would help states manage coronavirus-related treatment costs by increasing federal medical assistance percentage payments to state Medicaid programs by 14 percentage points until June 30, 2021. Expanding this program, which matches each dollar a state spends on Medicaid with a corresponding percentage from the federal government, would greatly increase the amount that states could spend on fighting the public health crisis. The HEROES Act would also provide free COVID-19 treatment for uninsured individuals and for Medicare beneficiaries. Moreover, the bill would create a special two-month open enrollment period to allow individuals who are uninsured to enroll in coverage as well as provide full premium subsidies through January 2021 to allow laid-off or reduced-hour workers to retain their employer-sponsored coverage through an expanded continuation of health coverage granted under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
President Trump and Senate Majority Leader McConnell’s approach: Their approach is to continue fighting to repeal the Affordable Care Act (ACA) and take away health care for 20 million Americans. Even amid one of the worst public health crises in American history, the Trump administration is actively backing a lawsuit to repeal the ACA in its entirety. Just as the United States’ COVID-19 death count had surpassed 80,000, Trump doubled down, saying, “We want to terminate health care under Obamacare,” without putting forward a serious alternative.
Whether there’s a lifeline given to the unemployed and those in poverty
Americans who were already living at the poverty level, making wages well below the poverty line, unable to find work, or stretched by working as single parents have been disproportionately affected by the coronavirus pandemic and economic fallout. A Federal Reserve study found that almost 40 percent of households with annual incomes of less than $40,000 have reported job losses; another recent study on the stimulus payments found that Americans who maintain a bank balance of less than $500 spent nearly half of the stimulus deposits within 10 days, mostly on food, rent, and bills. Lawmakers may not have known how long the economic downturn would last when they initially appropriated those funds, but it is now clear that to help Americans make ends meet, they must provide more direct payments to those hit the hardest.
With nearly 36 million Americans applying for unemployment insurance since the beginning of March, there is a clear need to expand safety nets.
House leadership approach: The HEROES Act would continue to support the most economically vulnerable Americans until the public health emergency and economic recession have ended. It would extend the period through which federal unemployment benefits last to January 2021 as well as provide an additional direct payment of $1,200 per family member—up to $6,000 per household. It would also expand payments to workers who file with individual taxpayer identification numbers instead of only allowing social security numbers, which would provide much-needed relief to tax-paying undocumented workers and their families. The HEROES Act would also strengthen the earned income tax credit for those with no qualifying children, and it would increase the employee retention credit from 50 percent to 80 percent, allowing 60 million Americans to remain connected to both their paychecks and employer-provided benefits.
Furthermore, the HEROES Act would provide an additional $10 billion to support the projected increase in Supplemental Nutrition Assistance Program (SNAP) participation as well as increase the SNAP benefit level by 15 percent. Crucially, the bill would also allocate $4 billion to public housing agencies, $100 billion in emergency assistance for low-income renters, and $750 billion in housing assistance for low-income individuals in project-based rental assistance properties to ensure that housing remains stable for low-income Americans.
President Trump and Senate Majority Leader McConnell’s approach: Trump and McConnell’s plan would provide a payroll tax cut for workers, which would disproportionately benefit the wealthy while doing absolutely nothing to help the 33 million Americans who have lost their jobs since March. The Trump administration is also doubling down on enforcing new work requirements to access SNAP benefits, despite a federal judge calling the policy “likely unlawful” and particularly egregious in a global pandemic.
With more than 100,000 COVID-19-related deaths in the United States so far and an unemployment rate not seen since the Great Depression, it is increasingly clear that the federal government must do more to combat the coronavirus pandemic and the economic fallout. With the passing of the HEROES Act, the House has demonstrated its commitment to fighting for working Americans with every tool at its disposal. The actions of Senate Majority Leader McConnell and President Trump, on the other hand, seem to indicate that they believe there is time to wait to see how the economy will respond to the legislation enacted so far. Unfortunately, ordinary Americans do not have the same luxury.
Ryan Zamarripa is the associate director of Economic Policy at the Center for American Progress. Jesse Lee is a senior adviser for Communications at the Center.
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