Memo: Republican Stonewalling of Real Relief Is Setting the Stage for a Series of Catastrophes for Working-Class Americans, Small Businesses, and Public Services

From: Lily Roberts and Ryan Zamarripa

To: Interested Parties

In June, CAP Action urged legislators to provide robust and predictable support to the economy by directing funding to cash-strapped state and local governments, extending federal pandemic unemployment compensation (FPUC), and tying the expiration of policies such as Unemployment Insurance (UI) to labor market conditions rather than an arbitrary future date. At the time, it was inconceivable that Senate Majority Leader Mitch McConnell (R-KY) would allow the Senate to leave for recess without acting, knowing that millions of unemployed Americans were about to lose federal support. Piecemeal, insufficient aid that’s difficult for states to administer will keep unemployed people mired in uncertainty about their ability to afford next month’s rent, pay utility bills, put food on the table, or buy necessary prescription drugs.

This summer should have been spent getting the virus under control, making advances in public health tactics, and preparing for a vaccine. It should have been spent determining ways for schools and child care facilities to provide safe education or care for children. Instead—in the middle of the summer hurricane season—the Trump administration raided the Federal Emergency Management Agency (FEMA) for a short-term and overcomplicated solution to the expiration of UI benefits rather than negotiate with Congress.

Deep cracks in the economic recovery are emerging as a direct result of the Senate majority allowing critical provisions to expire. The HEROES Act, which the U.S. House of Representatives passed with bipartisan support in May, would address the most important and time-sensitive problems plaguing America. Since then, the need for support has only grown. But instead of engaging in dialogue over the next round of stimulus in May, June, or even July, Leader McConnell and his allies thought the current crises did not warrant further federal action; the leader went so far as to opine that he didn’t “think we have yet felt the urgency of acting immediately.” Tens of millions of Americans are still out of work, and every week, more people say that their family doesn’t have enough food or confidence in their ability to pay next month’s rent.

The Trump administration and Leader McConnell are trying to excuse their inaction by pointing to the fact that Democrats are pushing for a more comprehensive bill. But in the continuing, slow-motion emergency that the nation faces, failing to pass a sufficiently large and sufficiently comprehensive package will have dire consequences as we enter the fall.

Below are eight reasons why Congress still needs to pass a comprehensive relief bill immediately.

1. COVID-19 cases are still incredibly high

The United States is quickly approaching 200,000 deaths from COVID-19, hovering around 1,000 deaths per day. As of late August, in 27 states, new cases of COVID-19 are either increasing or not decreasing; in 17 states, new deaths are increasing. Medicaid is essential to the health care system’s response to these crises.

What is needed now: The federal share of Medicaid costs—the federal medical assistance percentage (FMAP)—should increase to at least 14 percentage points, lasting at least through the June 2021 provision included in the HEROES Act. The better approach would be to leave the FMAP increase in place until labor market conditions improve, as recommended by the National Governors Association. An additional, targeted FMAP increase is necessary for home- and community-based services, as included in the HEROES Act. Finally, strong maintenance of effort protections must be included. Meanwhile, we must prepare for an efficient and equitable distribution of eventual COVID-19 vaccines, including funding for promotion and distribution of free vaccines to the public, administration to uninsured people, and oversight by the U.S. Department of Health and Human Services.

2. The economic recovery is backsliding

In July, the unemployment rate in several states—including Arizona, Florida, Kentucky, Maine, North Carolina, and Pennsylvania—increased after gaining back some of the ground lost since March. In some states, these increases were continuations from June. Moreover, the number of workers filing for UI also ticked up in August in a handful of states, including Maine, New Hampshire, and Nevada. Nationwide, initial UI claims increased the week ending August 15, 2020, and more layoffs are becoming permanent rather than temporary.

What is needed now: Congress must provide enough stimulus—including state aid, UI, and other supports—to address the still-high waves of job loss and bolster people’s incomes throughout the pandemic.

3. Federal Pandemic Unemployment Compensation expired

The CARES Act provided unemployed workers with a $600 weekly payment in addition to their state unemployment benefits. These payments, which expired at the end of July, were not only crucial to keeping utilities paid and food on the table but also were a critical lifeline to small businesses that relied on the extra spending power. Nationwide, nearly 25 million unemployed workers are now facing food insecurity and homelessness, while small businesses are deprived of $14 billion each week in extra spending.

What is needed now: Congress must provide an extension of the $600 weekly FPUC payment until jobs are safe and available. These payments should be tied to labor market conditions and back-dated to cover missed weeks.

4. Amid state budget shortfalls, public schools are ill-equipped to keep students, their families, and K-12 teachers and staff safe

America’s school crisis shows the urgency for state aid and a national public health strategy. Faced with slumping tax revenues and soaring expenses, states and localities are being stretched dangerously thin: Shortfalls for state budgets are expected to reach more than 20 percent in FY 2021. And because nearly every state must adhere to a balanced budget, this will mean huge cuts to services and schools; already there are nearly 600,000 fewer state and local education workers than this time last year. These teacher reductions will necessarily result in larger, more crowded classrooms, increasing the risk of transmission. Absent child care support, parents and teachers are being put in the impossible situation of navigating online and in-person school—and schools, the child care sector, and states need dedicated funding for a long-haul effort. 

What is needed now: Congress must provide at least $915 billion to states, localities, tribes, and territories and an additional $300 billion targeted for child care, K-12 education, and higher education.

5. The federal moratorium on evictions expired, putting tens of millions of families at risk of homelessness

Between 12.3 million and 19.9 million households—28.1 percent to 45.6 percent of all renters—are now vulnerable to evictions. And in early August, with state eviction moratoria expiring in 24 of the 43 states that initially passed them, renters began to face housing crises with new urgency.

What is needed now: Congress must provide at least $100 billion in Emergency Solutions Grants for emergency rental assistance and $11.5 billion for homelessness assistance in Emergency Solutions Grants combined with funds from FEMA.

6. Voting infrastructure must be prepared for the pandemic

Voters must be sure in November that they can vote safely and that their vote will be counted. With the pandemic still raging across the United States, states need to prepare for increased mail-in voting and ensure safe in-person voting. Congress has only provided a fraction of what states need to prepare their election systems for November.

What is needed now: Congress must provide $3.6 billion in funding for expanded access to vote by mail and safe in-person voting options, including extended early voting.

7. The U.S. Postal Service is being undermined

Postal workers are putting their lives on the line to ensure that seniors receive their benefit payments, veterans and people with disabilities receive their prescription drugs, and small businesses can stay afloat. Yet the U.S. Postal Service (USPS) is facing a massive revenue shortfall due to the pandemic, making it harder to protect its employees. Moreover, Postmaster General Louis DeJoy—the unqualified Republican donor appointed by President Donald Trump—has been taking steps to slow mail delivery, which could have serious consequences for millions of Americans and the November election. Further, he has issued misleading statements on his intent to address these slowdowns as well as the severity of the problem.

What is needed now: In addition to DeJoy’s resignation, all changes that he implemented and that are resulting in the current delays must be reversed; the USPS must be prevented from making any further changes that delay the mail; and the USPS must be provided with the necessary funding to protect its employees and continue to carry out its work.

8. The census is behind schedule

The COVID-19 pandemic has complicated the census process through which field workers contact the households that have not responded to the census in person; earlier this year, more than 2,000 census field operations were put on hold, thus delaying the accurate count of every person in the country. Without more time and resources, the U.S. Census Bureau is more likely to make errors and, as a result, give lawmakers an incomplete and inaccurate picture of the country for the next 10 years.

What is needed now: The enumeration period for census completion should be moved back to October 31, 2020, as previously announced. In addition, the U.S. Department of Commerce and Census Bureau should be afforded an extension of the statutory deadlines for apportionment counts to April 30, 2021, and redistricting data to no later than July 31, 2021.

Conclusion

With renewed COVID-19 caseload increases; tens of millions of Americans on the brink of eviction, food insecurity, and joblessness; and a slew of economic indicators heading in the wrong direction, the need for further stimulus is urgent.

To get the pandemic under control and the economy back on track, Democrats should continue to demand that the next coronavirus relief package address the real pain Americans are increasingly feeling and provide long-term stability—not just a short-term patch to set up further political hostage-taking.

At the Center for American Progress Action Fund, Lily Roberts is the director of Economic Mobility and Ryan Zamarripa is the associate director of Economic Policy.