In its first three packages, Congress took important steps to begin to address both the urgent public health needs and the economic fallout of the coronavirus pandemic. But with each passing day, the magnitude of the crisis we face—one deepened by the initial slow response of the Trump Administration—has become clearer and clearer. We are beginning to face the extent of both the human toll of the pandemic as well as its economic impact. Moreover, it has become increasingly clear both how crucial strict stay-at-home orders are to control the virus’ spread and how much economic support is needed by the government to make that possible in the near-term—even if it is the far stronger approach from both a public health and long-term economic perspective. We need the public to engage in very strong forms of social distancing to fight the spread of this virus, but we cannot leave them desperate and destitute when they do so. That would weaken our fight of the virus, lengthen the time it takes to contain and beat the virus, and deepen the economic dislocation and devastation from the virus. That is why further bold action is essential.
The magnitude of health aid and direct relief to families, unemployed workers, and small businesses included in the CARES Act that passed on March 27—which added up to $2.2 trillion—would have been unimaginable only a few weeks ago. With nearly 10 million unemployment claims filed in just the last two weeks alone, and with indications that social distancing will be needed for much of this spring, it is increasingly clear that the emergency packages passed to date will not be nearly enough. At the same time, as CAP laid out in a report last week, an effective public health response that allows for reopening of the economy requires both a national stay-at-home policy for at least 45 days and a rapid deployment of public health measures that can provide the confidence to restart activity.
This report lays out how Congress can act to fight the virus most effectively and, by doing so, shorten the time it takes to recover from the public health crisis and address our economic challenges.
A successful response that protects public health and economic livelihoods requires Congress to take several steps.
- First, to fight the virus, we need the following public health measures immediately: 1) a stay-at-home policy nationwide for at least 45 days, 2) testing to the point where we can test the sick and the healthy3) instantaneous contact tracing, and 4) targeted restrictions on large gatherings and mass transit beyond the 45-day period. This not only requires Congress to press the administration and state governments to take these measures, but to also fund elements of this approach, such as testing production and deployment; availability of personal protective equipment (PPE); and nationwide contact tracing and deep cleaning measures. Congress should also pass much-needed protections and supports for essential workers who must be both safe and fairly compensated for their necessary work during this stay-at-home period.
- Second, a successful response requires Congress to significantly expand the measures included in the CARES Act and other COVID-19 packages to reflect the expected magnitude and duration of the disruption. That will be needed to both protect public health and enable the strongest economic recovery. These measures must cushion the income shock that families, small businesses,and communities are facing right now. The federal government must support strategies to keep people in their jobs, avoiding the mass unemployment that will make it harder for people to weather both the crisis and its recovery. That means extending and expanding more robust unemployment insurance, including work-sharing; dramatically enhanced state and local aid; vigorous support for small businesses; larger and automatically extended direct payments to households; and more universally available paid leave—all while filling gaps in those programs that leave out people who are experiencing severe need. With increasing evidence that the administration plans to undermine protections in place for workers and taxpayers, Congress must strengthen oversight and restrictions for programs that provide corporate assistance. Congress must also take steps to allow us to safeguard both fair elections and public health. We anticipate that Congress may need to pass a package at least as large as the $2.2 trillion CARES Act to address immediate relief, and we urge policymakers to pass measures that automatically extend to provide the confidence that help will be available for as long as the crisis lasts.
- Third, a successful response requires rectifying gaps in previous packages to address areas of need across the country, particularly among populations who are most vulnerable in times of both public health crisis and economic distress. Despite promising proposals in the House’s bill last month, the CARES Act fell short in addressing areas of key need such as health care coverage, food assistance, education, child care,and support for people with disabilities. It is imperative to focus on the needs of those most affected by crises, such as those already unable to receive adequate medical care or those likely to be discriminated against.
While the economic outlook once the pandemic ends remains highly uncertain, policymakers should begin taking steps now to build a strong recovery that benefits everyone. We must respond to this crisis in a way that creates an economy that is stronger for everyone than the one that existed before the coronavirus pandemic. The prerequisite for a strong recovery, though, will be enabling a robust public health response now and minimize the economic damage that households, small businesses, and communities experience over the coming weeks.
Enabling a robust health care response: The prerequisite to a strong economic recovery
The Trump administration has erroneously framed the current moment as a trade-off between physical health and economic health; without a robust and nation-wide strategic approach to constraining the spread and effects of COVID-19, on top of dire health consequences, the economy will suffer longer-lasting, deeper damage. While the country waits on administration officials, governors, and mayors to use the tools at their disposal for a coordinated public health response, Congress must prioritize the economic relief and public health spending that will allow Americans to stay home as much as possible.
Evidence is mounting that the coronavirus is disproportionately harming communities of color; in some parts of the country (where racial demographics are available), African Americans represent a disproportionate share of COVID cases as well those dying from the virus. We need to ensure that funding for our health infrastructure is adequately focused on communities of color.
Ending community transmission. If the country experiences several waves of large-scale viral infections because of half-hearted containment measures, it will be more disruptive to public health and the economy than it would be to implement an evidence-based plan immediately. A strong public health response now will ultimately strengthen the economic recovery, as evidenced by past public health crises. In order to be confident in the safety of reopening components of the economy, we must begin with a 45-day stay-at-home policy starting as soon as possible. State and local orders may be helping to flatten the curve in some areas, but a patchwork of guidance endangers those in areas where local officials have been slow to act in addition to places where those residents travel. Vastly ramped-up virus testing levels and contact tracing will allow for more thorough isolation of those who may be asymptomatic spreaders. While some components of this plan are outside of Congress’ purview, providing additional funding for the following priorities will allow public health officials to contain community transmission more quickly:
- Continued swab testing
- Continued funding for PPE
- Operational funding for state and local public health authorities to conduct both diagnostic and surveillance testing (including training volunteers) and to build tracing teams
- Funding to set up and maintain drive-through centers
- Funding to research immunity issues
- Funding for serological tests
- App development (or funding for state licensing of the technology if privately developed)that will be necessary for instantaneous contact tracing
- Installing protective separation partitions for bus driversand all appropriate transportation professionals
- Funding for establishing fever check procedures in airports and elsewhere, purchasing items,and training personnel
- Funding to states for temporary isolation areas, as well as hotels for frontline health care workers
- Funding for daily deep cleaning for planes, trains, buses, and other forms of public transportation and public places
- Additional funding for developing a national disease surveillance program going forward
Ensuring transparency around Trump administration decisions on allocation of Strategic National Stockpile supplies, including ventilators, PPE, and tests. It is essential that the Trump administration be required to provide a clear and transparent allocations process to meet state requests for federal support in order to ensure decisions are not politicized. The American public needs to have confidence that the federal government allocation process is fair.Likewise, states need to have clarity about how the allocation process works. Congress should consider imposing public reporting requirements, including on Coronovirus.gov, for the following:
- The U.S. Department of Health and Human Services and FEMA’s allocations of equipment and supplies out of the Strategic National Stockpile.
- Any federal government purchase orders under the Defense Production Act and follow-on distribution decisions and actions.
- All requests for support by states filled by the federal government, responses to which should be guided by state need and health criteria.
Supporting and protecting essential workers while they keep the rest of us safe. Stay-at-home orders still require millions of workers to stay on the job to enable the rest of the country to stay safe. From doctors and nurses to delivery workers and grocery store employees, these workers make it possible for the country to continue to function during the crisis. And yet, in many cases, these workers are not being provided the pay, dignity, or basic protections they need. While some of these occupations (such as doctors and registered nurses) receive higher wages and workplace benefits, many essential workers (such as home health aides and retail cashiers) are paid low wages and are less likely to have access to paid leave. Many of those positions are disproportionately likely to be held by women, especially women of color, as well as by immigrants. These workers are more likely to have child care and family caregiving responsibilities at home.
In order to keep these workers safe while they keep us safe, Congress and the administration must enact standards to ensure that workers are safe from airborne infectious disease; are paid wages of at least $15 dollars per hour and receive hazard pay, as under the framework released this week by Senate Democrats; have access to benefits including paid sick leave and family leave; and have the ability to join a union. These standards must be paired with sufficient resources and a clear enforcement mandate for compliance with the law and surfacing problems when they arise. Moreover, Congress must provide a significant increase in the Child Care and Development Block grant so that states can ensure that workers have access to safe and affordable child care during the crisis and that employers respect their right to come together in unions.
In order to require that corporations comply with these protections, workers should be permitted to take action against companies that violate their rights, and, when courts rule in workers’ favor, they should receive back pay, damages, attorneys’ fees, and injunctive relief. Community and worker organizations that have access to workers should receive funding to help report on violations. And Congress should consider putting in place a special oversight board to ensure that workers are protected at any firms receiving government aid.
Finally, Congress also must ensure that components of public infrastructure, such as the United States Postal Service—which is critical to maintaining stay-at-home orders—are provided the resources needed even amidst significant revenue shortfalls.
Extending and expanding relief from initial packages
The public health response CAP has outlined is only possible if households, workers, communities, and small businesses receive the support they need to get through a period of extended economic shutdown. The CARES Act provided a necessary down payment on that support, but it is almost certainly too small, too short in duration, and too limited in the extent of the relief it provides.
A first step will be for the administration to make sure the CARES Act is fully, fairly, and quickly implemented, with relief getting to those who are entitled to it under the law. Already, there is reason to be concerned about how the administration is undermining the CARES Act. The administration has limited access to paid leave provisions and sought to avoid oversight of corporate aid proposals. Moreover, the administration has not yet demonstrated the ability to get legislated small business relief and unemployment insurance quickly into the hands of those who need it.
Congress must both hold the administration accountable for implementation of the CARES Act and provide any resources necessary to administer it. But it also must extend and expand relief to workers, households, states and cities, and small businesses—likely on an order of magnitude at least as large as the $2.2 trillion allocated in the CARES Act. Already, it is clear that the elements of the CARES Act—a single direct payment, unemployment aid through only June, a capped small business lending program, and a state aid program that only fills a fraction of the gap that is emerging across the country—will not be nearly enough. Congress must show the American people that aid will be available for as long as is necessary to take on the public health crisis, with expanded assistance that automatically extends throughout the crisis.
Expanding aid to states and localities who are under dire stress. States are facing a dual challenge as a result of COVID-19. The need for state services, including health care, is rising rapidly, while their revenues are dramatically falling due to important public health measures. This is especially true because states are being forced to take these stringent social distancing measures because the federal government mismanaged testing early in the crisis. Unlike the federal government, virtually every state is subject to a balanced budget constraint. This requirement sharply limits states’ ability to engage in the emergency spending they need and can create a feedback loop of austerity that can prolong the effects of a short-term shock. Preliminary media reports paint a stark picture, with states already reporting revenue shortfalls that could exceed 25 percent in some cases—and it is easy to imagine these figures getting more drastic as the crisis extends. Research indicates that a 1 percentage point increase in the unemployment rate can result in state fiscal shortfalls of $45 billion or more. Given forecasts estimating increases in the medium-term unemployment rate by several percentage points, state and local aid will likely need to be several orders of magnitude greater than what Congress has allocated.
Earlier stimulus packages included an important down payment on state and local aid—the second coronavirus package increased the share of Medicaid payments borne by the federal government (the so-called FMAP) by 6.2 percentage points for the duration of public health emergencies, and the third package included $150 billion in state and local aid. The second package also included an essential maintenance of effort provision; during public health emergencies, states may not adopt new Medicaid eligibility restrictions or take away Medicaid coverage. During negotiations on the third package, some lawmakers tried to weaken these consumer protections but ultimately failed. Congress must continue to reject such attempts in future COVID-response bills. This increase in funding also continues to be threatened by the Trump administration’s efforts via its so-called “Medicaid Fiscal Accountability” rule, which pursues policy changes that would limit states’ ability to raise their share of Medicaid funding. If finalized, these restrictions would undercut the fiscal relief provided by the FMAP increase. Congress must block this rule in order to protect states’ ability to fund their Medicaid programs.
But Congress must do significantly more than block these harmful proposals in order to both allow a robust public health response and ensure that this crisis doesn’t necessitate major layoffs of teachers, first responders, and other public employees or massive cutbacks in public services. And it is especially important that states get aid commensurate to the costs they are bearing, both as a result of the cost of the public health response and the attendant decline in revenues.
Additional aid to states should come in three forms. First, Congress should provide another increase in FMAP by at least 10 percent for both traditional and expansion Medicaid. This aid must be continued for the duration of any recession—not simply for the public health emergency. This would provide sufficient relief to help fortify the public health response and prevent a more dire state fiscal crisis. As was proposed in the House bill for the third package, FMAP relief should be automatically pegged to increases in state unemployment rates to ensure it provides assistance over the course of the crisis.
Second, Congress should provide flexible state and local aid on an order of magnitude higher than the second package. While the $150 billion Coronavirus Relief Fund was a necessary down payment to states and cities, it is both insufficiently large and overly limited in its permissible uses, as Congress precluded states from using the funds to pay for items that were already in state budgets. Given the magnitude of the revenue shortfalls, states and localities need greater flexibility to use the money to fill in their budget gaps, which we were not of their own making. Moreover, given the strain being put on both state and local finances, additional money needs to be allocated directly to localities (including smaller localities) without having it trade off against state needs.
Finally, as noted elsewhere in this piece, the federal government should provide support for specific areas where states are facing the direst need, including both K-12 and higher education, child care, transit, and other programs that are facing either increased need for services and/or shortfalls of incoming revenue.
In all three cases, Congress should heed the experience of the financial crisis, when state and local budget shortfalls led to both deep cuts in services and a lasting drag on economic recovery. Congress should immediately allocate funding at least three times as large as the roughly $250 billion in state and local aid in the previous bills, with triggers that automatically extends and/or expands this aid based on public health and economic conditions.
The CARES Act guaranteed U.S. territories far less than states, and it categorized Washington, D.C., as a territory. Washington, D.C., has a greater population than two states, and COVID-19 cases are much more prevalent than in other parts of the country. For the purposes of ongoing aid allocation, the District of Columbia should be treated like a state, and legislation should immediately rectify the existing funding allocation.
Continuing direct payments until the economy recovers and ensuring that they reach those who need them most. The CARES Act provided for direct cash payments to individuals and families. In general, $1,200 for each adult and $500 for each child. As CAP and others have emphasized, putting cash in people’s hands can be an important lifeline for those who are strapped, helping to fill in the gaps in other relief programs that might not reach everyone or take effect soon enough. The final legislation was a major improvement over the draft introduced by Senate Majority Leader Mitch McConnell (R-KY), which provided smaller relief payments or none at all to low-income households. The final version phases out the payments only for those above certain income thresholds (the payments are reduced by income starting at $75,000 for singles, $112,500 for heads of households, and $150,000 for couples). The payments should arrive automatically for people who filed tax returns in 2018 or 2019 and for those who received Social Security benefits in 2019 whether or not they filed a tax return. Many, including Senate Democrats, are urging the Treasury Department to ensure that other nontax filers receive payments automatically based on information the government already has. This would include recipients of veterans’ benefits, nutrition assistance (SNAP), and Supplemental Security Income (SSI), and would avoid the need for them to file a new tax return amidst the pandemic.
This first round of direct payments is a good start, but more will be needed. The draft proposal from Speaker Pelosi had provided for larger payments: $1,500 per person, including children. Congress should provide for an additional payment at that size while triggering further automatic payments that continue until the economy recovers, as measured by labor market indicators.
In addition, the CARES Act direct payments left out two large groups of people, and Congress should ensure that they are included in future legislation. First, while families will receive $500 apiece for children under 17, families will not receive anything for adult dependents such as 17-year-olds, college students, or relatives they support who are elderly or who have disabilities. Meanwhile, adults who are dependents of others cannot claim the $1,200 for themselves. Many college students pay rent and other bills, and they may be laid off from part-time hourly jobs or work study, but they could be deemed ineligible for the immediate payments based on their status as dependents on prior tax returns.
The CARES Act also regrettably left out millions of immigrant and mixed-immigration-status families. It required that an individual must have a Social Security Number (SSN) to qualify for a stimulus payment, including $500 for children. If filing jointly, both spouses must have an SSN, except if one is a member of the military. Unfortunately, this leaves out undocumented individuals and mixed-status families where even just one parent is filing their taxes with an Individual Taxpayer Identification Number and the other parent and all children have an SSN. Those families also do not get the $500 for their children. These households pay taxes in the United States and continue to do many of the jobs that our society relies on, and they should be eligible for emergency relief payments to help ensure they are able to afford shelter and food during this crisis, regardless of what taxpayer identification number they use.
Strengthening the unemployment insurance system’s critical role in providing aid to those who have lost their jobs—with a particular focus on work-sharing to keep people on payrolls. In other countries such as Denmark, the Netherlands, and the United Kingdom, policymakers have made more universal efforts to ensure that workers can stay attached to their employers even as economic activity shuts down. This should be a paramount priority in the United States, through both the unemployment insurance system and small business relief programs—even as we make sure that workers who do get laid off receive robust benefits.
The CARES Act did provide a major step forward in providing additional temporary relief through the unemployment insurance (UI) program, including through a temporary boost in the size of benefits; expansion to workers who are typically left out of the UI system; and additional weeks of benefits. However, for assistance to the unemployed to have its maximum impact, Congress must still take additional action to ensure the UI system can handle unprecedented volume and set up the system for the longer haul of the pandemic and the recovery. Higher weekly benefits, longer-duration benefits, and programs that include self-employed and contract workers who are not typically eligible for UI will provide a cushion for many. But with claimant records shattered each week, it may take months for those who have been laid off to get back to their pre-crisis hours or stability. The economy will be on a better footing if—when Americans can return to their normal activities—they have been receiving robust wage replacement for hours or jobs lost, and they have been able to continue purchasing the necessities without fear of exhausting benefits before businesses return to normal hiring.
Our unemployment insurance system was already insufficiently robust to handle any recession, let alone one of this depth. Unemployment insurance is state administered, and 10 states reduced the number of weeks of benefits for which workers are eligible in the wake of the Great Recession. Necessary fixes include standardizing the minimum of 26 weeks of eligibility across states and requiring higher levels of income replacement for the duration of the crisis. Some components of the unemployment insurance structure are intended to automatically kick in during economic downturns, but the instigating triggers need reworking. For example, the Extended Benefits (EB) program should automatically increase the number of weeks for which people are eligible for benefits during a downturn. However, because EB is partially funded by cash-strapped states, states may structure their unemployment rate trigger to give fewer people access to benefits. EB should also be structured to kick in faster and provide benefits for as long as they are needed. And rather than turning off UI benefits after four months, UI and other stabilizers should be automatically tied to economic conditions, so that continuing and future crises don’t require ad hoc action.
While robust unemployment benefits are crucial for people who lose their jobs, the best outcome is, as noted above, for people to remain connected to their employers—both to increase the likelihood they have a job when regular activity resumes and to maintain health insurance and other benefits, especially in the context of a public health crisis. One way to achieve that is work-sharing (also known as Short-Time Compensation), an arrangement in which the government covers workers’ lost wages when hours are reduced. This approach has been successful in the past in European countries during recessions and is being used now in countries such as Germany to more effectively avoid massive increases in unemployment during a period of economic stoppage. The CARES Act included full funding for existing or new work-sharing programs, plus 50 percent funding for states beginning these programs. Incentivizing companies to keep employees on their payroll can allow those workers to maintain their health insurance and other benefits, and it eases their transition back to work when the time is right. More funding will allow all states to stand up work-sharing programs and do the administration and outreach necessary to encourage employers to use those programs. Moreover, Congress should make sure that work-sharing can complement the small business lending programs it has supported, given the shared goal across these initiatives of maintaining workers’ attachment to firms.
Shoring up small businesses in all communities so that they weather the storm. The CARES Act established a lending program funded at $349 billion designed to help small businesses and nonprofits cover payroll costs, rent, utilities, and interest on mortgages and other debts. Called the Paycheck Protection Program, the program allows banks and other lenders to make loans 100 percent guaranteed by the SBA, with the possibility of forgiveness on some or all of the loan if certain targets around employee retention are met.
The program is intended to provide borrowers with funds that can help cover both payroll and nonpayroll costs, while creating incentives (and, ideally, the ability) for firms to keep workers on while activity is shut down. But while the terms are generous enough to spur high demand, there are reasons to be concerned that the PPP will not be nearly enough to stem the challenges facing small businesses. First, the SBA and the Treasury Department have struggled to quickly stand up the program in a way that allows lenders to get up and running, with enough ability to meet the expected flood of applications. Even once the program gets up and running, limited lender capacity—alongside the $349 billion cap in loans—means that many of the hardest-hit firms are likely to end up at the back of the line for support. Smaller firms; minority- and women-owned firms; those facing acute distress; and those without existing relationships with lenders are likely to be deprioritized by lenders when compared to larger firms that already bank with participating lenders. The firms struggling most, many with fewer than 20 employees—whether a small child care facility or the ice cream shop on Main Street—lack the resources and existing banking relationships to get to the front of the line.
Moreover, loans are limited to 2.5 times a borrower’s monthly payroll, so even those borrowers lucky enough to finally receive a loan approval may find the amount far short of what is needed to not only retain employees but also to meet fixed expenses until health officials determine that businesses can resume. As a result, even if and when the program becomes fully operational, there are reasons to be concerned both that many firms will be left out and that the firms struggling most will not receive aid large or generous enough to maintain operations.
Congress must make a clearer, firmer commitment that any small business that has ceased operating or that is experiencing a major decline of revenue as a result of COVID-19 should receive support that allows them to both keep workers on payroll and weather the other costs that might otherwise force them to close permanently. And Congress must take more aggressive efforts through the SBA, the unemployment insurance system, the tax code, and grant programs operating together to achieve this goal, with a particular emphasis on making sure that access to this assistance is not centered on the most well-connected or well-resourced firms.
This includes, as noted above, further expanding access to work-sharing programs that can make it much easier for firms to keep workers on payroll even with significantly reduced revenues by using the unemployment insurance system to compensate workers for reductions in hours. The administration must ensure speedy implementation of the Paycheck Protection Program and enhance both its size and its terms so that the assistance is enough to help small businesses in distress keep people on payroll. The administration must also create “backstops” within the program so that struggling small businesses who cannot find a lender have options to get relief on similar terms.
At the same time, Congress should pass new tools that can provide both a lifeline to small businesses and fill in gaps. One of the fastest means for aiding small businesses would be reducing their costs, many of which flow to parties, such as banks and large property companies, far better positioned to access credit and manage this period of uncertainty. Preserving liquidity for small businesses also helps avoid flooding the federal and state legal systems with wasteful and costly claims. Accordingly, there should be a moratorium on collections against small businesses (and consumers), effectively freezing foreclosures, evictions, repossessions, utility disconnects, garnishments, and other related actions. Small business credit card lines of credit should also be increased, and rates and fees capped. Congress must also protect small businesses—particularly those in communities of color—from unfair business practices and the growing challenge of market concentration.
Given the lag time and insufficient funding under the CARES Act SBA program, consideration should also be given to establishing a cash grant program under the Treasury for the smallest businesses, particularly those in underserved areas. Amounts could be determined up front based on the business’s 2019 revenues and payroll, as proposed by Sens. Merkley, Murphy, and Van Hollen, then adjusted at the back end when businesses file their 2020 tax returns next year in order to ensure funds were spent largely on workers and justified expenses and to prevent unjust windfalls.
Far too little is being done to address the plight of minority-owned small businesses, where racial wealth gaps further aggravate their abilities to weather the storm and even their abilities to access to capital. For example, the $10 million designated for the Minority Business Development Agency (MBDA) represents less than .003 percent of the more than $350 billion designated for small businesses overall—this funding should be increased to $350 million, and the MBDA should be authorized to administer direct cash grants for minority-owned small businesses to cover employee salaries; paid sick or medical leave; insurance premiums and mortgage; rent; and utility payments. Future packages should also create an accelerated track for minority business enterprises seeking COVID-19-related assistance through the PPP.
In addition, funding for the mission-driven Community Development Financial Institutions—which lend in hard-to-reach small businesses often in rural American and communities of color—should be increased dramatically; the State Small Business Credit Initiative and the Small Business Lending Fund should be rebooted to support community bank lending and loan forbearance; and credit unions should be allowed to raise supplemental capital on a temporary basis strictly for pandemic-related forbearance and lending purposes and temporarily make pandemic-related small business loans without counting them toward their Member Business Lending cap. Conditions should be set for these programs such that the COVID-expanded lending capacity is converted after the crisis into resources that help small businesses better secure themselves against future systemic shocks, such as natural disasters and extreme weather.
Finally, since this is not the last time the United States is likely to see a pandemic, federal support should enable the development of private pandemic insurance. This insurance would cover business interruptions, allowing coverage to kick in automatically in the future, with private insurance underwriters maintaining skin in the game to police for waste and abuse and incentivize better preparation for forthcoming systemic shocks.
Including all workers in emergency paid leave protections. In the Families First Coronavirus Response Act (FFCRA) and the CARES Act, Congress included important protections to provide up to two weeks of emergency paid sick days and up to 12 weeks of emergency child care leave (10 weeks paid), which could help as many as 87 millionworkers during the coronavirus outbreak. These are critical protections to prevent the spread of the coronavirus to the public as they allow workers to stay home if they are sick or self-quarantining or need to provide care while maintaining their economic security. But the law includes loopholes and exemptions, added by Congressional Republican leadership in the negotiations process, leaving millions of workers without guaranteed access to both types of paid leave. Furthermore, the final rules issued by the Department of Labor (DOL) interpreting the law have widened and worsened these loopholes, making it harder for more workers to access critical protections. Large employers with 500 or more employees are not covered by any of the requirements in the law to provide either emergency paid sick days or paid child care leave. And the law creates an exemption for small employers with fewer than 50 employees that permits them to request a waiver from the law’s requirements if they can show economic hardship. The DOL rules have interpreted this exemption so broadly that have largely abdicated their oversight responsibilities, instead allowing small employers to self-determine that they are exempt from providing the paid child care leave protections in the new law, without any approval required from the DOL. The DOL rules also effectively go beyond the employer size threshold carveouts in the law and explicitly exclude health care providers and emergency responders from both emergency paid leave protections. Additionally, the law allows the Office of Management and Budget to decide to exclude federal workers from both emergency paid leave protections.
Depending on how these exemptions are ultimately implemented, the majority of workers may be excluded from these emergency paid leave protections. This includes at least 61 million and potentially more than 96 million private sector workers from both large and small employers and more than 2 million federal workers. These exclusions cover many workers deemed essential who are required to continue working during the pandemic, including workers at all of the major grocery store and pharmacy chains, delivery drivers—whether employed by a large company such as UPS or as gig workers for apps like Instacart—and “any individual who is capable of providing health care services necessary to combat the COVID-19 public health emergency.” The law as it is being implemented pursuant to the DOL’s regulations does not come close to providing the comprehensive paid leave protections necessary to help workers weather the extended COVID-19 pandemic and remain attached to the workforce. And even for workers who are able to access the emergency paid leave provisions in the law, the amount of leave available is too limited for workers who need to address their own illness or care for an ill loved one. The law provides for two weeks of paid sick leave but no additional paid medical or caregiving leave if a worker or their family member needs more time to recover. Congress must act in the fourth coronavirus package to expand coverage of the emergency paid leave protections, such as those included in the P.A.I.D. Leave Act, and fix efforts by the administration to undercut paid leave protections through the regulatory process, which run counter to the legislative intent of Congress.
Greater protections for workers and taxpayers in programs that aid large corporations. Congress provided the Treasury with the ability to extend hundreds of billions of dollars—potentially levered up substantially by the Federal Reserve—in assistance to large corporations. The administration has already signaled its intention to ignore oversight measures Congress put in place—such as strong provisions around a special inspector general and a Pandemic Response Accountability Committee—making it even clearer that stronger restrictions need to be put in place on the Treasury’s discretion around the program. And recent firings of inspectors general have only emphasized the degree to which the Trump administration appears intent on skirting accountability.
Congress should mandate that eligibility for aid be determined by transparent criteria applied by a publicly accountable board and eliminate the Treasury’s ability to waive limits on buybacks, dividends, golden parachutes, and layoffs by recipients. Worker protections need to be strengthened—workforce-level requirements should be determined by pre–pandemic levels and extend to the end of the pandemic; all recipients should provide paid sick leave throughout the pandemic; and large firms should meet the requirements already established for medium-sized firms. All firms should provide (through the SEC) full disclosure of their impacts on stakeholders and the public, including for any financial intermediary the carbon emissions financed by its portfolio. Financial penalties for violations of terms protecting the public and workers must be built into loan agreements. The minimum level of equity warrants should be at least 10 percent of loan value, and private firms must provide equivalent protection for the public. The Congressional Oversight Committee should also be given subpoena power.
Ensuring fair elections even as we protect public health. Although November’s general election is months away, steps must be taken now to protect the integrity of the democratic process. Indeed, many precautions required to stem the spread of COVID-19, such as social distancing and the shuttering of community spaces, pose significant challenges for election administration that most state election systems are ill-prepared to handle. State officials will be responsible for making critical decisions to update electoral procedures in order to keep communities safe and ensure all Americans can exercise their most fundamental right—the right to vote. It will take states substantial time to effectuate significant modifications and educate voters about these changes, which is why additional funding must be provided immediately. To keep voters and election workers safe while ensuring access to the ballot box, all states must significantly expand vote-by-mail opportunities; implement at least 14 days of early voting; adopt online and same day voter registration; and update in-person polling place procedures in compliance with public health guidelines. The House of Representatives proposed providing $4 billion to states to fortify their elections, and the third legislative package provided a down payment of $400 million to help states start the process. Congress must appropriate additional funds and require states to take these critical policy steps to ensure an efficient, safe, and fair election.
Filling gaps to ensure that the most vulnerable communities are not at risk
With people out of work and communities in financial distress, it is crucial that future legislation address gaps that were left in the previous packages. The CARES Act failed to meet the need for assistance to the populations who are most vulnerable in times of public health crisis and economic distress. Health care coverage, food assistance, education, and child-care are crucial needs right now, particularly as people lose jobs or have their working hours cut. Programs must be designed and funded to address the needs of specific populations; people with disabilities, people who are in need of domestic violence services, and those who may be discriminated against must be centered in future legislation.
Determining that everyone has access to comprehensive health care coverage during the public health emergency. Any response to the COVID-19 pandemic that does not ensure access to comprehensive, affordable health care coverage is incomplete. If enacted, CAP’s universal coverage proposal—Medicare Extra for All—would guarantee that all Americans could enroll in the same high-quality plan, which would ensure that everyone could be tested and treated for COVID-19 and future pandemics without financial risk.
This comprehensive solution may be difficult to achieve under a president committed to undermining health insurance coverage through his attacks on the ACA. For this reason, Congress may need to take a more intermediate approach to ensure that uninsured individuals—including people who become uninsured because they have lost their employer-sponsored insurance due to the COVID-19 pandemic—are enrolled in health insurance coverage during this crisis.
First, Congress must provide funding for outreach and enrollment to help people access existing health care coverage options in the marketplaces and in Medicaid. The Affordable Care Act allows people who lose their employer-sponsored insurance to enroll in a marketplace plan during a special enrollment period (SEP). The current SEP gives newly uninsured people 60 days to enroll in a plan, and if their income is between 100 percent and 400 percent of the federal poverty level, they will also qualify for help in paying their premiums. Enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) is open any time of the year for people whose income qualifies them for those programs, but Congress should ease paperwork requirements to make it easier to enroll and stay enrolled in the program. Without additional funding for public education and enrollment assisters, eligible individuals may not know about these coverage options.
Second, Congress must establish a COVID-19 SEP. Unfortunately, not all uninsured people will qualify for a marketplace SEP, because that SEP is triggered by loss of insurance, not by job loss. For that reason, not all newly unemployed people will be able to enroll in marketplace plans. President Trump has the authority to create a new COVID-19 SEP to allow all newly jobless or uninsured people to enroll in the marketplaces, but he has refused to do so. Congress must step in and establish a SEP that extends until the start of open enrollment later this fall.
Third, Congress should expand financial assistance in the marketplaces, making this source of coverage more affordable. It should increase the generosity of premium tax credits and cost sharing reductions to include all COVID-related testing and treatment. The Trump administration has encouraged the proliferation of junk plans as an alternative to marketplace coverage; Congress must also act to require these plans to fully cover COVID-19 testing and treatments with no cost-sharing.
Fourth, Congress must create new coverage options for people who fall into the Medicaid coverage gap. Fourteen states have yet to expand their Medicaid programs to all adults with incomes less than 138 percent of the poverty level. For millions of people across these states, this means that they are ineligible for Medicaid, but their incomes do not qualify them for help in affording marketplace coverage.
It is possible that one of these states may decide to expand Medicaid, particularly as COVID-19 continues to spread and if Congress adopts a full 100 percent FMAP for the Medicaid expansion population. But given these states’ 10-year opposition to the law and the health care repeal lawsuit led by Texas, Congress must explore other ways to cover this vulnerable group.
Although Medicare Extra builds on the existing Medicare program, we recommend that for the next legislative package Congress focus on expanding access to marketplace plans because this approach is administratively simpler. Moreover, these plans would offer greater out-of-pocket financial protections, and they are already designed for the under 65-year-old population. Congress could expand the availability of premium tax credits to people with incomes between zero and 100 percent of the poverty level and extend cost-sharing reductions so that there was no cost-sharing for this population. If Congress took this approach, it would need to include a maintenance of effort requirement so that states that expanded their Medicaid programs did not reverse this decision.
The COVID-19 pandemic has created a significant increase in the need for mental health and substance use disorder services. In addition, due to weakened infrastructure of health care systems, as well as public health measures that call for people to stay home to avoid the risk of transmitting or catching the virus, “ongoing mental health and substance use services to continuing clients will be very vulnerable to disruption.” The next coronavirus package should include a significant funding increase for the Substance Abuse and Mental Health Services Administration (SAMHSA) in order to increase community based mental services and other key initiatives such as the National Suicide Prevention Lifeline and the National Child Traumatic Stress Network. Future COVID-19 response bills will need to continue to focus funding in this area.
Ensuring access to testing and treatment for people regardless of immigration status. The Families First Act created an optional state Medicaid program for COVID-19 testing. Under this option, the federal government pays for the entire cost of the testing, but this particular Medicaid provision only pays for testing for uninsured people who otherwise meet the Medicaid program immigrant eligibility requirements.
While extending testing and treatment to all people regardless of immigration status is the right and equitable thing to do, it is also critical for the success of our common efforts to flatten the curve and combat the coronavirus. President Trump admitted as much at a press conference in March when he made clear that it is in the country’s interests to provide testing to undocumented immigrants. At the press briefing, U.S. Surgeon General Jerome Adams similarly observed that the virus “doesn’t judge based on where you’re from.” According to the Migration Policy Institute, an estimated 6 million immigrant workers are employed in frontline industries, including in health care, retail and wholesale, manufacturing, and agriculture. And CAP finds that more than 200,000 DACA recipients—nearly one-third of all individuals who are currently protected by the program—are working in industries and occupation groups that would make them “essential critical infrastructure workers” under the Department of Homeland Security’s own guidance. While tens of millions of Americans are sheltering in place and working from home, these individuals are still out in public and are reporting for work, which means they are both at heightened risk of becoming infected and spreading the infection if they are unable to access testing and treatment when needed. To ensure both testing and treatment are available to all people who need it regardless of immigration status, Congress should confirm that treatment for COVID-19 or a related condition is treatment for an “emergency medical condition” under 42 U.S.C. 1396b(v).
Making new vaccines and treatments available to all. Taxpayers are funding much of the basic research that will result in the eventual vaccine and treatments. Simply placing out-of-pocket protections for consumers is insufficient – there must be requirements that these life-saving products be priced reasonably, otherwise pharmaceutical companies will set extraordinarily high prices that will raise premiums and further cost taxpayers through raising costs for Medicare and Medicaid.
Prioritizing food security. While the CARES Act included some funding for entities such as food banks to combat food insecurity, the next round of legislation must make meaningful investments in the country’s largest food assistance program—SNAP. Congress should approve a minimum 15 percent increase in SNAP benefits while also expanding the ways benefits can be used to ensure that the most vulnerable families have the flexibility to buy what they need. That includes allowing SNAP benefits to be used to purchase hot foods; restaurant take-out and delivery; and hygiene and cleaning supplies. Congress should also consider the use of the current SNAP EBT cards infrastructure as an avenue to deliver targeted supplemental payments to low-income families beyond the one-time cash assistance secured in the CARES act. These are changes that would both stimulate the economy in a recession and keep people from going hungry amid a crisis. The Trump administration has stated that it remains committed to limiting people’s access to food, despite a judge’s ruling that a national health crisis should pause administrative actions to limit states’ abilities to waive work requirements for some SNAP recipients. Any legislation moving forward must also officially suspend the finalization and implementation of regulatory attacks from the past year that are designed to weaken SNAP’s ability to reach all those in need.
Meeting the education system’s needs at an unprecedented moment. The CARES Act provided just a drop in the bucket in the amount of funding needed to make up for state budget shortfalls that put education funding at risk. If left unaddressed, these shortfalls will cause tuition spikes at public colleges and universities as well as massive increases in student loan debt. The next round of legislation must prioritize larger funding for public higher education that flows through states, along with maintaining efforts to avert cuts and provisions to ensure the distribution of dollars to institutions that have greater need. Congress also needs to prepare for an extended pause of student loan payments by all loan borrowers. Cancellation of $10,000 would be well-targeted for lower-balance borrowers who are at the greatest risk of default. Finally, policymakers should resist calls to weaken existing accountability and oversight around colleges.
The CARES Act also provided some needed support for K-12 schools as they attempt to provide remote learning, school meals, special education services, and more. However, without a much greater investment in public education, states and school districts will suffer the same fate they experienced during the Great Recession, with massive cuts to education funding as a result of depleted state revenues. Multiple studies have shown the lasting negative effect of these cuts on student outcomes, particularly for students from families with low incomes. It is policymakers’ responsibility to prevent this harm from happening again. This additional funding should be targeted to school districts with the greatest need, and districts should be required to focus resources on students who suffer the greatest harm from both the immediate crisis and ongoing disinvestment. Congress should also make sure that states and school districts do not reduce spending on education by including a robust maintenance of effort requirement.
Sustaining the child care industry, a critical piece of infrastructure. The CARES Act included additional funds for the Child Care Development Block Grant to support access to child care for essential workers, help providers with the increased costs of cleaning and sanitation, and to cover some of the additional expense of recalibrating their programs to serve smaller group sizes to comply with social distancing guidelines. However, the needs of the child care industry run deep and require significant investment to ensure providers survive this pandemic. Child care providers were already struggling with a broken market system where families struggled to find affordable child careand providers couldn’t afford to pay teachers a living wage. The coronavirus pandemic has exacerbated these challenges, and with most child care providers operating on razor thin margins, it is not surprising that nearly 50 percent of providers indicate they could not survive a closure of more than two weeks without significant public support. This reality could prove devastating to the economy’s ability to restart once the pandemic passes, with child care being such a critical piece of infrastructure for working families. Congress needs to provide a dedicated investment to support child care providers dealing with the impact of the coronavirus. States need flexible funding that can be used to support access to care for essential workers, help providers who are closed to cover their ongoing costs, and support the predominantly female early childhood workforce who are at significant risk of economic crisis due to lost earnings.
Bolstering support for people with disabilities. People with disabilities and underlying conditions are the most likely to contract COVID-19. However, the CARES Act did little for people with disabilities and their families. Congress needs to invest significant dollars in home- and community-based service grants to fund direct support professionals and the home-health workforce. Congress must also require that paid family medical leave language includes caregivers who cannot work because they are caring for an adult family member with a disability or an aging family member whose support program has closed or whose care worker is unavailable because they’re sick. As families shelter in place, Congress must make it easier for people with disabilities to obtain access to medications and supplies. Individuals must be able to access medication and supply refills for at least 60 days to allow for self-isolation without superfluous trips to a pharmacy. Given the push for online education, increased funding for the Individuals with Disabilities Education Act would give schools what they need to make sure that disabled students are not left behind.
Means-tested programs such as SNAP, LIHEAP, and SSI are subject to asset limits, excluding people not solely on income but on savings as well. SSI asset limits are particularly punitive for people with disabilities and their families, precluding them from building savings without threatening crucial health benefits. These limits should be raised or eliminated to ensure that families who suddenly lose income are not penalized based on their minimal savings.
Providing support for housing and protecting households who experience a sudden income shock. The CARES Act provided necessary—but insufficient—relief for those who may be struggling to pay for housing in light of sudden job loss. While some states and cities have stepped in with necessary protections, more is needed, particularly to support low-income renters and people experiencing homelessness. Blanket protection against eviction and strong legal safeguards against utility and broadband shutoffs will help ensure that people experiencing a sudden shock to their income remain economically solvent and would have clear positive public health outcomes as well. Emergency housing grants to provide direct rental assistance should be paired with assistance for small-scale landlords in low-income areas to prevent further community distress. Keeping people in their homes during a pandemic has clear public health benefits as unsheltered people who are sick with coronavirus are two to four times as likely to need critical care, twice as likely to be hospitalized, and two to three times as likely to die than the general population. Permanent stable housing must be connected to wraparound services or a continuum of care that is flexible and tailored to the individual or household’s needs. In addition to permanent protections for renters to ensure that they aren’t pushed out of housing once it is obtained, rental and deposit assistance must also be targeted to currently unhoused people to guarantee their successful transition into longstanding housing. Housing costs were already an enormous burden for many, and immediate responses to this crisis demonstrate the need for longer-term investments in programs that prioritize Housing First strategies and the restoration and development of low-income and public housing.
The CARES Act also failed to establish sufficient protections against extraordinary costs and financial abuses during this time of crisis. In particular, stretched consumers (and small businesses) will be turning to credit cards and other expensive forms of credit and may get stuck with late fees, overdraft fees, and other expenses, including potentially abusive payday lending, through no fault of their own. Instead of leaving millions of working Americans mired in a vicious cycle of debt, Congress should cap consumer interest rates and facilitate the availability of affordable credit to all Americans, if necessary, through extraordinary facilities at the SBA or the Federal Reserve. In addition, to ensure that no one loses their automobile or has debts collected against them during these pressing times, Congress should establish a temporary moratorium on debt collections and enforcement.
Finally, the CARES Act neglected to include any substantial protections for consumer credit scores as a result of the coronavirus pandemic. Countless American families are currently experiencing severe financial shocks through no fault of their own. Americans should not be penalized for depending more heavily on consumer credit in these uncertain times. This is especially important for people of color, who have less wealth, depend more heavily on credit during emergencies, and are more likely to experience unemployment during economic downturns. Future relief packages should temporarily restrict the effect that high balance-to-limit ratios, new credit, and delinquencies have on credit scores.
Prioritizing funds for domestic violence and sexual assault organizations doing lifesaving work. While orders to stay at home are necessary to prevent the spread of COVID-19, home is not always a safe place for survivors of domestic violence, and survivors of sexual assault can become more traumatized and isolated. Although domestic violence and sexual assault programs are open and providing services, shelters and other services that typically involve communal housing or in-person supports for survivors lack the adequate resources to pivot quickly to virtual or other safer methods. Across the country, cases of domestic violence have surgedand without further resources, shelters already housing and caring for survivors in communal spaces risk severe outbreaks unless there is a significant influx of funding for vital operational resources. In order to continue their lifesaving work, domestic violence and sexual assault organizations need sufficient funding for operational accommodations (technology to support remote and digital support services, cleaning supplies, staffing changes, on-demand language access, and more); continued services and staffing; as well as to provide cash assistance, rental assistance, and temporary accommodation in hotels or motels for survivors. Specifically, we must prioritize increased funds for the Family Violence Prevention and Services Act (FVPSA) shelter funds; the Violence Against Women Act (VAWA) Sexual Assault Services Program (SASP); and the Domestic Violence Bonus via the Continuum of Care program at HUD, as well as waiver of matching funds requirement in the Victims of Crime Act (VOCA) grants. We must also ensure that resources are allocated to culturally specific programs serving the most marginalized survivors. Finally, we must ensure that all protections and resources are available to all survivors, including immigrant victims regardless of their status.
Ensuring that the response is equitable and that civil rights are protected. While COVID-19 will hit all communities, the public health and economic crises will exacerbate existing inequities. Communities that are disproportionately uninsured or underinsured—and that are more financially strapped—are already being disproportionately affected, and they must be centered in policy solutions. The following are illustrative of additional needs:
- Enhance funding for agencies’ enforcement of civil rights and anti-discrimination protections. Protections against discrimination are not expendable during a crisis. It is essential to ensure that the enforcement functions of agencies are well-resourced to investigate claims of discrimination or other violations of the law; identify problem areas; and target their activities where they are most needed. The insecurity and uncertainty caused during emergency situations can also lead to increased vulnerability for workers, who may decide to endure discriminatory practices rather than risk the loss of a job. For example, enforcement agencies such as the Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) must receive increased funding that is designated for the purpose of bolstering existing resources to better enforce anti-discrimination protections and strengthen investigatory tools. These resources could also be used to develop an interagency effort to monitor implementation to ensure compliance with the antidiscrimination protections in the new law. DOL and EEOC protections hold employers accountable and help to secure the civil rights of all Americans, particularly those most vulnerable during the current pandemic. Further, enforcement agencies should be prohibited from weakening or altering employer obligations to comply with all antidiscrimination protections.
- Provide critical health and economic information to people in the language in which they are most fluent. Language barriers prevent countless people of color from obtaining crucial information about disease treatment and prevention. More than 350 different languages are spoken in the United States. Thirty-five percent of Hispanic and Asian Americans and 14 percent of Native Hawaiian/Pacific Islander people are limited English proficient (LEP), meaning they speak English “less than very well.” LEP Americans have the legal right to access care in their preferred language. However, few hospitals require their medical residents to receive interpreter services training or offer medical staff formal assessments of their foreign language proficiency. While the third coronavirus relief package provided $25 million to the SBA for language services, no money was provided for health-related crisis information during the pandemic. We recommend providing additional funding to ensure official coronavirus-related publications are translated for single-language minority groups with a large presence in their jurisdiction.
- Secure critical services and medical care for LGBTQ people. Due to widespread discrimination, poverty, and significant health disparities, LGBTQ people are at high risk for extremely dangerous outcomes from the coronavirus. Unfortunately, there are not clear protections for LGBTQ people in federal law and agencies have dismantled rules ensuring LGBTQ people can access health care and federally funded programs and services free from discrimination. Gaps in relief endanger us all. To ensure federal relief reaches LGBTQ people, clear and explicit prohibitions on discrimination are needed to ensure that no person otherwise eligible will be excluded from participation in, denied the benefits of, or subjected to discrimination in the administration of programs and services funded under this act based on nonmerit factors such as (but not limited to) age, disability, sex, race, color, national origin, religion, gender identity, or sexual orientation. All recipients of funds under this act must treat as valid all marriages that are valid under federal law. There should be no waiver of anti-discrimination provisions in any supplemental funding deals or stimulus packages.
- Protect and expand access to reproductive health care.Reproductive health care is essential health care. Congress must act to expand access to reproductive health services, including abortion and contraception, especially given the unknowns about how pregnancy intersects with the coronavirus. This includes ensuring that no new abortion restrictions are included in funding packages, such as Hyde Amendment language. In particular, Congress should: increase funding for evidence-based family planning providers; ensure access to reproductive health care through telehealth; expand access to over-the-counter contraceptives; require insurance plans to cover a 12-month supply of contraceptives; and reduce barriers to accessing medication abortion, including restrictions on mifepristone via telemedicine. Finally, Congress should take steps to protect maternal health by extending pregnancy Medicaid coverage beyond 60 days postpartum to ensure no one loses health coverage two months after giving birth, especially during a pandemic. Additionally, pregnancy should be a qualifying life event for a special enrollment period, allowing pregnant women to enroll in or change their health insurance plans.
- Release low-risk and elderly incarcerated persons and secure additional resources and funding for currently and formerly incarcerated persons. COVID-19 is spreading rapidly throughout the country’s jails and prisons. The current environment for incarcerated persons is dangerous in the wake of this virus where social distancing is essential in not spreading this disease. Prior to the outbreak, prisons and jails already lacked public health resources such as clean water, single bathroom and shower use, and ample access to medicines. Today, when these public health protocols are even more necessary, incarcerated persons are at heightened risk, as are corrections staff and their family and friends. As such, multiple reports indicate that a number of staff members as well as incarcerated persons have contracted and died of the virus. In a confined setting, the presence of COVID-19 can spread quickly and widely. It is imperative that jails and prisons safely and expeditiously reduce their populations by, for example, releasing the most susceptible, which would include the elderly and medically vulnerable. Additional funding and resources are also necessary to ensure the public health protocols, including testing and treatment, are put in place to protect those remaining in confinement, since current funding increases in the CARES Act can be used for a wide range of public safety needs and will quickly be strained. Finally, anyone who has reentered their communities from incarceration, whether recently or otherwise, will face some of the most significant obstacles in obtaining employment, housing, and other essential needs in the current environment. Funding for reentry services, therefore, must be expanded significantly so justice-involved people can have a chance to lead healthy and stable lives.
Preparing for a recovery once the public health crisis ends
The measures we have laid out above are designed to end the COVID-19 pandemic as quickly as possible while cushioning the impact for families, small businesses, and communities. The most important step in getting people back to work and restarting our economy is to first get the public health response right. Only once we have taken all of the necessary steps to get the virus under control will people have the confidence to restart normal economic activity; a failed public health response could mean a future need for quarantines and stay-at-home orders.
However, while the immediate causes of today’s unemployment are temporary and a result of necessary policy choices to limit unnecessary contact, there is a heavy risk of lasting economic effects once businesses are allowed to reopen and normal behavior resumes. Even with a robust policy response to the immediate economic shock, it is likely that some businesses may be closed permanently; some families may experience income shocks that are not easily reversed; and some communities will struggle to get back to a stronger economic footing. Moreover, despite low headline unemployment rates, the economy that preceded the COVID-19 crisis was one that didn’t work for millions of Americans, with stagnant wages, growing income and wealth inequality, and chronic disinvestment in areas such as infrastructure, education, and public health.
Those weaknesses in our economy made the country more vulnerable to any external shock to the economy. We must begin taking steps to ensure a strong economic recovery as activity returns to normal. That starts with automatically extending programs such as direct cash payments, financial aid to states, and unemployment insurance for the duration of any period of elevated unemployment—not just during the health crisis. Similarly, the country must provide extended support for areas such as SNAP, housing, education, and child care. The more robust our efforts in these areas, the more likely the country is to experience a quicker and stronger recovery.
As businesses reopen, we will also need to invest in other areas that can provide stimulus to the economy. That can include investments in infrastructure. At the moment, the priority in this space should be investing in infrastructure that aids in responding to the pandemic—such as broadband, clean water, and health infrastructure, including creating additional hospital beds—as well as addressing imminent shortfalls that will occur as tax revenues that support state and local infrastructure programs continue to drop precipitously. Over time, we will also need to make badly overdue investments in areas including transportation, schools, and clean energy. In doing so, infrastructure efforts should make a down payment on transforming the United States economy from one reliant on fossil fuels to one rooted in clean energy while helping build resilience against the impacts of climate change. While these investments cannot provide immediate relief in the same manner as many of the other items that need to pass in the short-term, Congress should consider how it can set in motion today the critical planning by states and communities to support projects that will create new jobs later this year and throughout an economic recovery. At the same time, Congress should consider additional approaches to supporting reemployment postcrisis. These should include expansion of child care and long-term care jobs, building on subsidized employment approaches used in the previous economic crisis, and considering job guarantee models as laid out in CAP’s Jobs Blueprint for the 21st Century.
Conclusion
The most effective approach to ending the coronavirus pandemic requires Congress to aggressively build on the steps it has already taken, going much further to support both public health and provide economic relief. Congress and the administration should act quickly at the scale needed to tackle this challenge—enabling strict social distancing and stay-at-home orders, expanding substantially upon the relief already provided, and filling gaps that have left the most vulnerable populations at particular risk.
Members of the Criminal Justice Team, Disability Justice Initiative, Early Childhood Team, Economic Policy Team, Education (K-12) Team, Democracy Team, Health Policy Team, Immigration Team, National Security and International Policy Team, Postsecondary Education Team, Poverty to Prosperity Team, Race and Ethnicity Team, and Women’s Initiative contributed to this report.
Neera Tanden is the president and CEO of the Center for American Progress. Jacob Leibenluft is a senior fellow at the Center. Lily Roberts is the director of economic mobility at the Center.
To find the latest CAP resources on the coronavirus, visit our coronavirus resource page.