Senate Republicans are starting to release details about their proposal for a 3rd bill to address the #COVID19 pandemic & the sharp economic downturn that threatens. We are looking carefully at the information. But so far, we’re seeing some very troubling indications. 1/
While the proposal includes a number of provisions focused on businesses, which certainly are seeing sharp declines in demand, with many shutting entirely, the needs of workers & struggling families get short shrift.
Direct stimulus payments ($ to households) can help families make ends meet & bolster demand. Unfortunately, the Sen. GOP package would give the poorest households no help at all & millions of low- & moderate-income households significantly less than those who are better off.
That should be unacceptable on both humanitarian & hard-headed economic grounds. Low-income people are the most vulnerable during severe economic times. They are more likely to see their earnings fall & seldom have a substantial financial cushion to rely on.
Excluding or giving less to low-income households will mean that more households will face difficulties paying rent & putting food on the table. But that’s not all – it’s also strikingly bad economics.
Low-income households are far more likely to spend virtually all money they get – & spend it quickly – than higher income households, so you get more economic bang for the buck.
Unfortunately, reports suggest there also are other very big & disturbing gaps in what Senator McConnell is proposing. Here is just some of what’s reportedly missing:
1) Proposals to prevent homelessness, quickly help those who lose their housing, & support them with federal rental assistance so they are housed & safe, rather than on the streets or in crowded shelters. This pandemic makes safe, affordable housing more important than ever.
2) Fiscal relief for states: State revenues will plummet in this environment & w/o robust fiscal relief, states will have to lay off workers & cut public services, hurting residents & making the downturn worse. States could even shortchange public health response.
The fiscal relief in the #FamiliesFirstCoronavirusResponseAct was quite modest. More has to be done.
3) Help for workers who lose their jobs: W/o critical improvements, the Unemployment Insurance (UI) program will fail to reach many jobless workers entirely & provide benefits too low/short-lived for others. Families will face hardship & pull back spending, hurting the economy.
Some states are already reporting a sharp rise in claims for unemployment insurance, but the Senate GOP package appears to do nothing to expand the reach of unemployment insurance or make it stronger.
4) Expanded coverage thru Medicaid & ACA Marketplaces: These will provide critical coverage during the crisis, but could do more if eligibility were expanded & Marketplace coverage made more affordable. We must avoid having millions of uninsured people who can’t afford treatment.
5) Increase in #SNAP benefits. 1 of the most effective stimulus policies of the Great Recession was an increase in SNAP, which helps families hard hit by recession put food on the table & boosts consumer spending.
Given the grave risks to the economy, the breadth of what is missing is stunning — and in our view, not responsible.
The challenges facing the country are vast now, & we need a robust policy response to try to reduce the likelihood of a sharp & deep recession & an even starker health crisis. We will likely need to consider policies well beyond what we have done in prior recessions.
But some priorities are clear. We need to expand meaningful health coverage, provide robust fiscal relief to states, provide assistance to struggling families & workers who lose their jobs, & make direct stimulus payments & fully include low-income households.
For more on what an immediate & robust response should include, see @CenterOnBudget analysis released this morning: cbpp.org/research/econo…
