Center for American Progress

Oversight and Implementation Will Determine the Effectiveness of the New Laws Responding to Coronavirus

Oversight and Implementation Will Determine the Effectiveness of the New Laws Responding to Coronavirus

The public health and economic recovery hinge on the effective implementation and oversight of Congress’ coronavirus legislation.

Fog blankets the U.S. Capitol dome as seen from North Capitol Street, March 2020. (Getty/Bill Clark)
Fog blankets the U.S. Capitol dome as seen from North Capitol Street, March 2020. (Getty/Bill Clark)

Congress has met the monumental challenge of the coronavirus pandemic with a historic response. The size and scope of the pieces of legislation addressing the public health and economic crises would have been unimaginable before March 2020—the CARES Act alone was the largest stimulus bill ever passed. The broad goals of the legislation passed to date were clear: allow the United States to effectively address the public health crisis while mitigating the economic harm to people, businesses, state and local governments, and the broader economy. While moving quickly was imperative, doing so meant that stakeholders and advocates did not have the opportunity to fully weigh in. The following analysis discusses areas for concern in implementing the legislative packages. It also makes policy recommendations to address those concerns with the goal of increasing the efficacy and responsiveness of the existing packages and laying the groundwork for meaningful future legislative packages to ensure that aid reaches the intended recipients and that vulnerable people are not left out of the recovery process. Some aspects of future packages will be primarily about additional funding. For example, the current $10 billion in loan authority for the U.S. Postal Service is insufficient and will need to be significantly increased to ensure the continued operations necessary for our supply chain and election administration. Despite the expansive nature of the legislation and the associated trillion-dollar price tag, there is grave danger that the legislation passed by Congress thus far will not achieve those goals. And while the interim emergency legislative package that passed this week did provide needed support for hospitals, testing, and small lenders, it did not address the core areas where the administration’s implementation has fallen short.

The legislative response to the coronavirus has been sprawling and complicated and has put in place new kinds of programs or modified long-standing eligibility requirements for existing ones, requiring quick action by agencies to promulgate rules or guidance. These laws also give wide latitude and discretion to the executive branch to disburse hundreds of billions of dollars—even where the current administration has shown its incompetence and willingness to condition federal aid on political support or opposition.

The Center for American Progress has identified three major areas for concern in execution of the first packages:

  • First, the complexity of many of the programs is making them difficult to implement in a timely manner. Not only are individuals and businesses struggling to obtain the benefits they are entitled to, but government agencies are also unable to meet the surge in demand for their programs.
  • Second, lack of oversight and accountability of the package opens the door to misuse and corruption.
  • Third, many of the country’s most vulnerable populations and businesses were excluded by design from the first legislative packages and can be further left out by their implementation. Their needs must be addressed in subsequent legislation.

Both public health and economic recovery depend on the successful implementation of the legislation passed so far and the passage of additional legislation to fill remaining gaps.

Questions to guide policymakers as they implement and develop new legislation

As states and federal agencies work quickly to implement new programs and drastically expand existing programs, they should prioritize implementation, oversight, and access. Realistically, there will be bottlenecks and processes that are difficult for eligible potential beneficiaries to navigate. Policymakers should prioritize outreach—rather than prematurely denying any applicant who may be successful when backlogs clear—and transparency in reporting on access and beneficiary demographics or details. The following questions provide a basic guide for evaluating implementation of the new laws and identifying prime areas of risk:

  • What steps do federal agencies or states need to take to put in place new benefits or programs? How quickly are those changes happening? Are they being socialized broadly enough to ensure full take-up, especially by underserved populations?
  • What new benefits, programs, or changes to existing requirements are likely to be the most difficult to put in place?
  • How long should it take for specific provisions to be implemented, and how can policymakers ensure they move as fast as possible? What are likely logistical bottlenecks—such as a skeletal or remote public workforce—or limited physical access points for people to claim benefits?
  • Will some governors or other elected officials slow or fail to administer a new benefit or program for political or ideological reasons? Is regulation or guidance needed to implement provisions of the law? Is the Trump administration promulgating them with due haste? Are they limiting access to relief in a discriminatory or political way or reserving discretion that could mean unfair application?
  • Are any provisions in the law (such as temporary or permanent waiver of requirements) having an unintended consequence or being exploited to accomplish an ideological goal?
  • With unprecedented new programs—such as the Paycheck Protection Program (PPP), the retention tax credit, and expanded unemployment insurance eligibility for self-employed and gig workers—is the program design (i.e., statutory language) working out? Are any changes needed?
  • For large pots of money with relatively limited oversight (or with hindered oversight by the Trump administration, such as in the context of his signing statement), how can we ensure that resources are equitably distributed?
  • Are policies having their intended effect?

The complexity of many programs is making them difficult to implement in a timely manner

Several interventions responding to the current economic crisis have eligibility and application processes that are so complex that potential beneficiaries have been stymied. In several cases, system capacity has also limited access: State unemployment websites have crashed due to a high volume of users, and benefits counselors and accountants have had limited official guidance to offer. Similarly, both the speed with which aid to small businesses is disbursed and the navigation of applying for that aid will hinder the smallest businesses—and those that have the most tenuous finances—in taking advantage of assistance for which they are eligible. As states and federal agencies work quickly to iron out the details of new or newly expanded programs, they must balance ensuring that applicants for assistance are not rejected prematurely because of capacity issues or challenges navigating new systems. Administrative resources will be necessary for system capacity building, outreach to those who are likely eligible, and assistance to applicants for navigating the process.

State unemployment systems were and are unprepared for a deluge of applicants and a much-needed expansion of eligibility to new categories of workers. The most significant implementation concern for the unemployment insurance expansions included in the CARES Act is the fact that many state systems are woefully out of date. This has posed significant hurdles to updating computer systems to account for newly eligible categories of workers and additional benefit amounts. Additionally, enormous numbers of unemployment claimants are overwhelming systems throughout the country, causing delays and frustration to the point where people may stop trying to apply for unemployment benefits. Although states can provide benefits retroactively back to January 27 as applicable, regardless of when applications are received and processed, people need to be able to take advantage of expanded benefits and increased eligibility as soon as possible in order to pay their bills. The Families First Coronavirus Response Act (FFCRA) provided a down payment of $1 billion in funding to states to aid with the administration of new applications for benefits. This funding has now been disbursed, but the formula used by the Department of Labor left some states receiving less than expected. Given the overwhelming crush of applications, it should be a priority for Congress to appropriate additional funding for state administration of their unemployment systems. Second, states may be able to take emergency steps to expand the capacity for accepting and approving applications for benefits. Most immediately, states could:

  • Temporarily reassign and provide basic training for state employees from other departments to receive and/or process claims, in some cases by phone from the safety of their homes,
  • Implement a callback feature to avoid applicants from having to wait on hold for long periods of time,
  • Refrain from rejecting applications that may not meet criteria for traditional unemployment insurance upon first review and holding them for further review under revised guidance or under the new Pandemic Unemployment Insurance program when it is fully implemented,
  • Temporarily streamline questions and reduce eligibility requirements by executive order or action to the extent allowed by law or seek legislative approval for such measures, and
  • Explore whether automatic conditional approval at a lower benefit amount based on the answers to certain questions—and followed by closer review after submission of documentation—could work under existing law.

The Department of Labor (DOL) is falling short in fulfilling its outreach and enforcement obligations, leaving millions unaware of paid leave eligibility and allowing employers to deprive their workers of leave. The agency has yet to outline or undertake a comprehensive, widespread outreach and education effort to inform workers and businesses about the new paid leave benefits. The Families First Coronavirus Response Act included the first federal requirement for paid sick leave for workers in the private sector, making outreach and enforcement crucial. Millions of workers remain unaware of the paid leave protections that became available to them on April 1, 2020, leading to many—especially low-wage and essential workers—continuing to go to work sick. The DOL also announced a temporary period of nonenforcement before April 17, 2020. This was a critical time to contain the spread of the virus and flatten the curve, but it meant that eligible employees who were denied paid leave had no remedy, and it will be important for the DOL to take appropriate steps to fully enforce the new requirements going forward.

More money is needed for small businesses—but funds to date have gone out too slowly and failed to reach the most struggling firms. Time is of the essence for small businesses who have temporarily closed as a result of the COVID-19 crisis. Nationwide, at least 4 million businesses with fewer than 250 employees are at immediate or near-term risk of failure. The Paycheck Protection Program created by the CARES Act has provided a partial lifeline for some of these businesses, but even prior to the exhaustion of the program’s funding, it was clear that the program was doing too little to reach many of those firms who needed help. While the package that passed Congress this week will provide additional money—and includes some important provisions to support smaller lenders—it is unlikely to address the core challenges faced by the program to date:

  • Problems with implementation have slowed money actually reaching small businesses. The fact that the $350 billion initially allocated to the PPP has been exhausted is less a sign of successful implementation than overwhelming demand, and recent weeks have been rife with stories of small businesses and lenders struggling to navigate the Small Business Administration (SBA) program’s rules. Unclear initial guidance slowed the participation of lenders and has created confusion over, for example, how forgiveness would be calculated. Moreover, challenges ranging from failing computer systems to slow approvals from the SBA have delayed the disbursement of funds in both the PPP and the Economic Injury Disaster Loan program to small businesses—even after loan applications have been accepted.
  • The program has allowed big banks to be the arbiter of who gets loans, favoring their existing customers. Under the terms of the program, banks receive generous fees—up to 5 percent of the loan size—but have total discretion as to which borrowers they accept applications from—and are under no obligation to extend credit to any particular applicant. As a result, many lenders have chosen to only make loans to their preexisting borrowers—both to ensure that their existing customers make it out of the crisis and to avoid the burden of complying with Know Your Customer rules and other provisions. The largest lenders have set up “concierge treatment” to shepherd applications from their wealthiest clients—those with net worth of $10 million or more in many cases—while smaller businesses have to wait in line or get rejected outright.
  • Aid is not getting to those who may face the greatest needed. The ability of banks to ration credit based on their own preferences have effectively led to many small businesses shut out of the program—with the smallest businesses, minority-owned businesses, and those with the weakest access to the banking system most likely to be excluded. SBA data published on its website do not indicate the size of the businesses that received loans before the funds were depleted on April 16, but anecdotal evidence and securities filings show that many larger businesses (including publicly traded firms) have been able to get loans, while smaller businesses have been shut out. The package passed this week dedicated money to the smallest lenders and to Community Development Financial Institutions, who are more likely to reach the smallest businesses, minority-owned businesses, and those who are at risk of being stuck at the back of the line with the largest banks. But as long as it is up to the discretion of lenders alone to determine where limited time and resources are applied, the most vulnerable businesses are likely to find it harder to get relief than their larger, healthier counterparts.

Student loan payment pauses must account for processing lag time and loan forgiveness programs. The Department of Education paused payments and collections activity for tens of millions of borrowers. This is an important step to protect borrowers from going delinquent or defaulting. Yet transitioning so many borrowers all at once creates risks that some borrowers may have made payments between the announcement of the suspension and before servicers could process it. There will also need to be careful work done to ensure payments properly count toward various loan forgiveness programs and that borrowers are properly noted when the pause ends so that there is not a large uptick in defaults and delinquencies.

Lack of oversight and accountability opens the door to misuse and corruption

With large budgets and short timelines, allocations from the CARES Act are particularly likely to be inequitably distributed or used to enrich powerful corporate interests. The creation of a congressional oversight committee is a valuable step toward holding policymakers and implementing agencies accountable, but responsibility for oversight must extend further. The Trump administration has frequently demonstrated its commitment to funneling benefits to the wealthy and corporations. Policymakers and the public should be wary that funds in the CARES Act that support health care and industry may be distributed in ways that tilt the scales further toward concentration or payoffs for President Donald Trump’s allies or friends. Small business-focused programs lack independent oversight, which is a concern for very small businesses urgently seeking to make use of the programs. Their challenges in obtaining assistance are likely to go unheard. Higher education funding must require institutions to report on student outcomes, so that colleges and universities are held accountable. And while these elements of financial support for various industries should be administered transparently, oversight of election funding by states is even more fundamental to democracy. Without accountability and standards, those in power may use the excuse of a public health and economic emergency to disenfranchise voters. Full implementation of the CARES Act requires targeting resources to the places and communities that have acute health and economic needs.

The CARES Act included an additional $100 billion for the Public Health and Social Services Emergency Fund for hospitals and other health care providers, but it provides little guidance on how to distribute that money among hospitals. The legislation states that the funds are intended for “health care related expenses or lost revenues that are attributable to the coronavirus,” and they are to reach hospitals quickly and on a rolling basis. The funding can only be used to pay for expenses that are otherwise not reimbursed from other sources, but providers can apply for funds to pay for a wide variety of expenses, such as construction of temporary health care facilities; medical supplies and equipment, including personal protective equipment and testing supplies; and workforce training. Other than these broad instructions, the legislation offers little guidance on how to distribute the $100 billion across hospitals. In addition, the following COVID-19 response legislation adds an additional $75 billion to this fund, again, with little guidance on allocations. As a result, Health and Human Services Secretary Alex Azar has vast discretion in allocating funding, creating a potential for widespread abuse.

President Trump has already decided he will use a portion of the fund as an alternative to allowing uninsured people to gain coverage through the ACA’s marketplaces. Paying hospitals for treating these patients is not a substitute for comprehensive health insurance, which goes beyond limited hospital-based, COVID-19 treatment. Under the White House plan, those who become sick from COVID-19 could still face large medical bills from follow up care and other nonhospital providers, including doctors, who typically submit separate bills for their services. This approach also encourages uninsured people to go directly to hospitals for care, when other settings may be more appropriate.

Moreover, draining this fund for this purpose will leave fewer resources available for hospitals to use for building additional capacity to treat COVID-19 patients. The Kaiser Family Foundation has estimated that using the funds to pay for treatment for the uninsured could reduce the fund by between $13.9 billion and $41.8 billion. This unnecessary transfer of funds is just paying lip service to the needs of uninsured people; the administration is refusing to take real action by creating a COVID-19-related open enrollment period that would help them far more. Without additional oversight, Secretary Azar could, for example, adopt formulas for allocating funding that benefit states whose leaders express admiration for the Trump administration’s actions. Azar could also favor certain medical supply companies based on their shows of loyalty to the administration.

There is already controversy regarding the allocation of the first $30 billion in this fund, which is being distributed to providers based on claims they filed to the traditional Medicaid program in 2019. Hospitals in existing COVID hotspots such as Florida, New York, and New Jersey are pushing back against this allocation method, arguing that the funding should be directed to hospitals treating the largest number of COVID patients. Instead, this methodology might not result in sufficient funding for hospitals that treat a disproportionate number of uninsured patients or Medicaid patients. And by focusing on payments to hospitals under the traditional Medicare program, this approach could also underpay hospitals whose Medicare patients are largely enrolled in private Medicare plans. Both New York and Florida have very high rates of Medicare Advantage enrollments.

In response, the Department of Health and Human Services (HHS) said that it plans to allocate the next tranche of funding—$30 billion—to hot spots and make up for unforeseen inequities in the distribution of the first $30 billion. But on April 22, the department announced that hospitals in hotspots will receive $10 billion, and an additional $10 billion has been allocated to rural hospitals and health systems. The administration still has not said how much of the fund will go to covering the costs of uninsured people.

For these reasons, significant oversight will continue to be important to make sure that the $30 billion is ultimately targeted exclusively for providers at the frontlines of the COVID-19 response. The remaining funding should also be given to these hospitals and other providers as originally intended—not as an inadequate substitute for comprehensive coverage.

In the CARES Act, Senate Republican leadership prioritized enormous support for large corporations. Now, the administration is providing negligible independent oversight for those bailouts. Congress made it possible in the CARES Act for more than $400 billion to be extended for the rescue of large corporations while allowing the Treasury Department nearly complete discretion over this huge program. Borrower eligibility is entirely left to the Treasury. While there are limits on buybacks, dividends, golden parachutes, and layoffs by recipients, the Treasury Department may waive them. There is a requirement that borrowers provide the government with equity warrants to compensate the public for risk, but no level is specified in the act. Recently released Treasury term sheets for air carriers essentially ask the carriers to make an offer on warrants. Moreover, the act is written to allow the Treasury to allocate some of the $400 billion in funds to set up special purpose vehicles, run by the Federal Reserve, to purchase assets and make loans. The Federal Reserve already has been given funds for this purpose, using, for example, $100 billion in Exchange Stabilization funds as “equity” to establish the Main Street Lending Program—which can make loans of $600 billion—and the Municipal Liquidity Facility, which can make loans of $500 billion. Using the same equity-to-purchase ratio, the Fed could be authorized to make asset purchases or loans of $4 trillion at the Treasury’s discretion. Oversight of rescue funds is to be exercised by a special inspector general; the Pandemic Response Accountability Committee (comprised of inspectors general from executive departments, overseen by a newly appointed executive director); and a Congressional Oversight Commission. The administration has indicated in its signing statement for the act that it intends to limit the operation of the special inspector general, and later fired the Department of Defense acting inspector general, blocking him from serving as the executive director for the Pandemic Response Accountability Committee as selected by his peers. The administration has nominated a White House lawyer as the special inspector general.

Ways to more effectively monitor and oversee corporate bailout funds include:

  • 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 prepandemic 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.
  • Financial penalties for violations of terms of the loans, especially those 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.
  • Given the administration’s intent to disregard requirements for the special inspector general and the Pandemic Response Accountability Committee, announced in its signing statement, the Congressional Oversight Committee should have increased authority, including subpoena power.

Higher education funding will require monitoring institutional spending and student outcomes. The Department of Education is standing up a new program to distribute funds directly to colleges. Half of these dollars will go to emergency aid. The Department of Education’s initial requirements set important restrictions on the funds for institutions, such as banning shareholder dividends and executive compensation. But it also chose to place limitations on the types of students that can receive the funds that excludes undocumented students and could force those who do not already receive federal financial aid to complete the onerous aid application. The disruptions around coronavirus have also caused millions of students to suddenly move online. While flexibility to respond to this disruption is important, the Department of Education must also do more to require colleges to report on which institutions have moved online. It should also be tracking statistics around the number of students who have aid refunded because they stopped out as well as how many students enrolled in the spring who are not identified as having graduated but do not take out aid in the fall.

Special oversight will be required on the issue of predatory behavior around COVID-19 relief programs. Already, predatory scams have flourished to take advantage of Americans’ fears and uncertainty around the pandemic and government response. Such scams include fake cures or personal protective equipment (PPE) sales as well as false claims around COVID-19 relief and schemes to co-opt COVID-19 stimulus checks. In particular, online scams are expected to be widespread and pernicious. Already, registration of coronavirus-related website domain names has skyrocketed, and researchers have found that coronavirus-related domains are 50 percent more likely to be malicious than other websites registered during the same time period. Along with email, text, and social media phishing campaigns, many of these sites will prey upon consumer fears around COVID-19 to steal financial details and offload malware onto their devices. Although online platforms have stated their intention to crack down on coronavirus-related fraud, coronavirus response disinformation and scams have continued to flourish. The Federal Trade Commission (FTC), Federal Deposit Insurance Corporation (FDIC), and the Federal Bureau of Investigation (FBI) have already warned against coronavirus scams, many of which mirror scams that followed the 2008 financial crisis—scams that are still being prosecuted to this day. Given advances in sophistication and scope of widely available digital advertising tactics, including microtargeting, even more resources will be needed to identify and stop scams around COVID-19 response.

Congress should ensure that resources are given to federal and state authorities for appropriate investigations, that these investigations are prioritized, and that oversight on these issues of both public and private entities is conducted by the appropriate congressional committees; inspectors general; the Government Accountability Office (GAO); the Consumer Financial Protection Bureau (CFPB); Federal Trade Commission; Department of Justice; the Congressional Oversight Commission; and relevant state regulators and lawmakers.

The CARES Act does not attach spending requirements to $400 million in state election funding, meaning that governors who perceive voter disenfranchisement as politically advantageous are not required to use the added federal funding to effectively safeguard elections. To fully prepare U.S. elections during a pandemic, states need upwards of $4 billion in emergency federal funding. Although the $400 million down payment provided by the CARES Act will help states begin modifying election processes, significantly more funding is needed to ensure they can finish the job. Another concern pertains to a 20 percent match requirement. Elections have always been severely underfunded, and many states simply do not have budgets for a 20 percent match, particularly if states receive the full amount of necessary funding with the match requirement. The requirement is especially burdensome as state resources are stretched thin in responding to the virus. It is problematic that the CARES Act fails to require states to spend funds on the upgrades that are the most effective in safeguarding elections and keeping Americans sake; states can misdirect spending toward matters of lesser importance. The U.S. Election Assistance Commission (EAC) provides a generalized list of allowable expenses, including preparing for potential surges in mailed and absentee ballots; sanitary equipment; and costs associated with ballot tracking software, among other things. However, the EAC lacks authority to direct state action. As such, states will have wide latitude for determining how federal funds are spent. In utilizing federal funds, states should prioritize expanding opportunities to vote by mail while safeguarding opportunities to safely vote in person. Additionally, states should implement at least two weeks of early voting to reduce lines at individual polling places and expand access to online and same-day voter registration to help ensure all Americans can register to vote and cast ballots safely this year.

Vulnerable people and groups need to be included in upcoming legislation

In several cases, federal agencies have developed exemptions to the FFCRA and the CARES Act that run counter to legislative intent and exclude significant numbers of potential eligible beneficiaries. It is no coincidence that those excluded are likely to be those particularly at risk for health and economic challenges rather than those who have powerful allies in the administration. 

Stimulus checks exclude many, and they may be delayed getting to many whose needs are acute. The IRS has begun to distribute stimulus checks, but many people are left out by design, and many checks will be delayed in reaching beneficiaries. Taxpayers who don’t have Social Security numbers have been left out, as have many students and people with disabilities. Children born this year will not be counted towards per-child checks because payments are based on 2018 or 2019 tax returns. People without direct deposit access or bank accounts will get their checks more slowly, and low-income people who did not need to file a tax return in 2018 or 2019 will have to provide the IRS with detailed information. These eligible people may not have a reliable address at which to receive mail or access to the IRS’ website, particularly as public libraries and many social services providers are currently closed. The administration has created greater uncertainty by initially requiring additional information from those likely to need benefits quickly, including Social Security recipients and about 2 million veterans and their survivors. Many Social Security beneficiaries were given only 48 hours to provide information about their dependents. Lawmakers have had to call on the Treasury Department repeatedly to issue checks automatically to those who already receive benefits, since the federal government already has their information on file. Each time, the administration has backtracked under pressure. In addition, recent news notes that Americans who receive paper checks in the mail will have that delayed by several days due to the unprecedented addition of President Trump’s name on the check.

The Department of Labor’s rule-making excludes millions from paid leave laws. The emergency paid sick leave and emergency paid child care leave included in the FFCRA and CARES Act are critical programs to help millions of eligible employees take paid time away from work to recover, self-quarantine, or provide care related to the coronavirus. However, these are also complicated laws that only cover employers with fewer than 500 employees and include many other possible exemptions, which may result in an estimated 68 million to 106 million private sector workers being excluded from paid leave protections. Final rules issued by the U.S. Department of Labor on April 1, 2020, without the opportunity for public notice and comment widen and worsen the scope of these exemptions, running counter to the stated legislative intent of Congress. For example, DOL’s interpretation of provisions exempting certain essential workers from the law’s leave protections relies on an overly broad definition of who can be considered a health care provider or an emergency responder—both critical workers on the front lines of fighting COVID-19—thereby increasing the number of workers who could be covered by the exemption and denied paid leave by their employer. The law also allows for a possible small business exemption when the paid child care leave requirements would “jeopardize the viability of the business as a going concern,” requiring the DOL to make a determination about whether a business qualifies for the exemption. However, the DOL’s interpretation of the small business exemption in the law effectively abdicates the agency’s required oversight responsibilities and instead permits small businesses to self-determine whether they qualify for the exemption.

Several grants administered by the HHS may be used to support programs that discriminate against eligible beneficiaries because they are LGBTQ. In November 2019, HHS announced that they would stop enforcing their rule prohibiting discrimination in certain HHS grant programs. LGBTQ people experience high rates of chronic illness, face significant discrimination and cost barriers to receiving health care, and are more likely to be experiencing homelessness—all things that put them at particular risk for COVID-19. Open access to health and social services is always crucial, but that’s particularly clear during a public health and economic crisis. The CARES Act allocates significant funding to HHS programs that are permitted to discriminate against eligible LGBTQ beneficiaries, including $100 billion in grants to cover unreimbursed health care-related expenses or revenues lost because of the crisis; $425 million for the Substance Abuse and Mental Health Services Administration to increase access to mental health services; and $955 million for the Administration for Community Living to support nutrition programs and community-based services for seniors and people with disabilities. Groups representing LGBTQ elders, adoptive parents and foster children, and homeless youth are all suing the HHS to reinstate anti-discrimination rules and enforcement.

The Department of Labor’s guidance limits the ability of independent contractors to access unemployment insurance programs intended to include them. Department of Labor guidance released on April 2 bears this out by narrowing the scope of people eligible for unemployment insurance. It states that independent contractors are eligible only if they are forced to suspend their operations. The DOL initially limited Pandemic Unemployment Assistance (PUA) to people who were infected, were caring for someone who is infected, or had been ordered to quarantine by a medical professional. This left out people unable to receive a test to confirm their suspicions of infection, and those hoping to avoid being infected, especially older or immunocompromised workers. These restrictions were later clarified at the request of Democratic Senators, after a confusing start. The guidance allows for those who are caring for a child during the school year to access PUA, but that person becomes ineligible once the school year ends. Many independent contractors are facing confusion about eligibility for unemployment insurance and the Paycheck Protection Program. The PUA was created to make independent contractors, gig workers, and the self-employed eligible for unemployment insurance benefits, but independent contractors and the self-employed are eligible for the PPP. There is ongoing confusion about whether independent contractors are eligible for just one of those programs, both, or neither as well as eligibility of those who haven’t been forced to suspend operations entirely but have had a significant diminution in hours.

The Paycheck Protection Program is unlikely to reach small and minority-owned businesses. As noted above, the big banks involved in the program thus far, such as JPMorgan Chase and Bank of America, are able to make loans fast but are focusing on helping existing customers first. This is already and will continue to hurt smaller and minority-owned businesses that are less likely to have accounts there as well as rural businesses that don’t have big bank branches nearby. In one study, similarly situated African American-owned businesses were 20 percent less likely to obtain financing at large banks than white-owned businesses. Women of color who own businesses are particularly likely to face barriers: The SBA processes intended to support groups traditionally excluded from business ownership place women of color in the “minority-owned” category rather than the “women-owned” category, making them less able to access the assistance that should be available to them. Detailed demographic reporting should be required of SBA pandemic-related assistance.

State and local law enforcement assistance funding should be usable to lower jail and prison populations. The CARES Act provides for $850 million additional funding for state and local law enforcement to prevent, prepare for, and respond to COVID-19. The language under the grant solicitation that the Department of Justice (DOJ) recently published allows for the funding to be used for a wide range of activities, including but not limited to overtime expenses; purchase of PPE; and addressing the medical needs of those incarcerated. It is unclear, however, whether the DOJ will allow states and localities to use this funding to lower jail and prison populations as safely and expeditiously as possible—a strategy that is consistent with and allowable under the language of the statute and the grant solicitation. Jails and prisons are highly susceptible to the spread of COVID-19 because they are often overcrowded, lack proper sanitization, and are by their nature confined spaces with hundreds of people inside. Cook County Jail became one of the largest COVID-19 clusters in the country. The DOJ should encourage states to apply for CARES Act grants to safely reduce jail and prison populations by, for example, transferring people nearing the end of their sentence to halfway houses and providing reentry services.


Future legislation must make it possible for the public to continue to engage in very strong forms of social distancing to fight the spread of the virus—both by supporting public health and ensuring that it is not financially impossible for as many people as possible to stay home. Policymakers must also ensure that programs that are already being enacted into law and those currently being formulated be supplemented by plans for clear and accessible implementation. Stronger oversight mechanisms—designed to hold institutions that receive support accountable for their behavior toward their workers, patients, or the public—must be integrated into future legislation.

For example, Congress must act immediately to ensure the administration implements the new emergency paid leave provisions to help and protect all workers. Congress should provide important clarity to the Department of Labor about the implementation of the existing provisions and the necessity of rigorous enforcement to ensure expansive and generous coverage for workers—not blanket waivers for entire sectors regardless of economic hardship. This should also include additional funding to the DOL for increased multilingual outreach, education, and enforcement of the new paid leave protections, such as sending funding to state agencies and local community groups to conduct “Know Your Rights” campaigns, ad buys, and social media outreach to raise awareness. In addition, there should be a dedicated paid leave hotline and website to aid workers who need assistance accessing paid leave. These are critical implementation tools to ensure all the workers who are covered can truly benefit from the new program.

Similar models of outreach should be followed for all programs intended to assist workers and families for the duration of the public health and economic crises, paired with sufficient system capacity, adequate funding, eligibility rule-making that matches legislative intent, and adequate oversight. Implementation processes must be built around accessibility to the most affected populations. 

Members of the Criminal Justice Team, Democracy Team, Economic Policy Team, Health Policy Team, Postsecondary Education Team, Poverty to Prosperity Team, Race and Ethnicity Team, and Women’s Initiative contributed to this report.

Ben Olinsky is the senior vice president for policy and strategy at the Center for American Progress. 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.

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