It’s Past Time for Congress To Extend Financial Relief as New COVID-19 Cases Spike
As the country enters the winter with promising news of a COVID-19 vaccine on the horizon but cases spiking in the meantime, Congress must buy time for public health by passing financial support measures for households and businesses. A growing number of local and state officials—without the support of a national strategy—are taking action to reduce transmission by pausing indoor dining and other high-risk activities. Federal lawmakers must also prioritize financial supports for businesses, such as bars and restaurants, and households as part of their public health strategy in the lead-up to the distribution of a vaccine.
Congressional action in March and April provided additional aid to those who were unemployed, financial support to households, and emergency paid leave for workers who were sick or providing care for others. This relief kept people from having to choose between going to work, and thereby risking their health and that of others, and losing work hours or their job entirely. It also allowed people to pay bills and rent, staving off larger ripple effects in the economy. Now, with this financial support slated to expire at the end of the year, the federal government must take immediate action to make it financially feasible for as many people as possible to stay home over the next weeks and months. Failing to extend this aid will hurt families—particularly people of color—and will hamper economic recovery as businesses permanently close. Congress cannot wait until 2021 to revive and extend those lines of support and to ensure plans are funded and underway for vaccine distribution.
The financial lifelines that have kept Americans afloat during the pandemic are coming to an end
In March, the duration of the pandemic was unforeseeable. Congress set many of its provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act to expire at the end of December 2020, under the assumption that the urgency that inspired bipartisan action in the spring would continue for as long as the public health emergency necessitated it. But that urgency waned, with lawmakers uninterested in supplying further aid for workers who are still facing elevated levels of unemployment and uncertainty about the future of their jobs. Many families cannot return to work because they don’t have reliable, safe child care options and must contend with closed schools. Numbers of confirmed COVID-19 cases have increased to more than three times the rate in the spring, child care facilities are closing in droves, and major school districts continue to be remote—all of which translates into more challenges for families. Between caregiving demands, workers hoping to avoid dangerous health situations, and limited hiring, long-term unemployment will continue to rise.
At the end of December, 12 million Americans who have lost their jobs will lose the unemployment insurance (UI) benefits that have kept the economy and families afloat in a tumultuous year. And as coronavirus cases surge and schools transition to entirely remote learning, up to 60.5 million private sector workers will lose access to emergency paid leave, which allowed them to stay home to recover or isolate due to exposure to COVID-19, care for a loved one sick with COVID-19, and care for their children—and has been proved to reduce the spread of the coronavirus. Without this support, families might have to cut back hours at work or leave the labor force altogether, which translates to less spending and a further slowdown of the economic recovery.
This comes as long-term unemployment is surging: The proportion of unemployed workers who have been out of work for 26 weeks or more increased from 19.1 percent in September 2020 to 32.5 percent in October 2020. At the median, workers have been out of a job and looking for a new one for more than 19 weeks—an increase of 10 weeks from a year ago. Women have lost the majority of jobs in this recession—with the service sector most heavily affected by the downturn—and they continue to feel the impacts, with 5.5 million fewer women currently employed compared with pre-pandemic levels. Black workers and Latinx workers make up an increasing proportion of the unemployed. While many white workers have been rehired, the industries and occupations that are still the most affected are more likely to be staffed by Black and Latinx workers. Asian workers, particularly Asian women, have also seen sharper increases in unemployment than white workers during the pandemic, while systemic labor market discrimination favors white workers in rehiring decisions. Occupations such as hospitality and food service are unlikely to rehire staff to reach pre-pandemic levels any time soon; in fact, employees in these sectors may face further rounds of layoffs as colder weather takes hold in much of the country. But without continuing support from UI, people may be forced to take whatever job is available to support their family, even if that job endangers their health and raises the potential for further community spread—or there may be no job available to them at all, and without the minimal support of UI, families could face eviction, foreclosure, debt, or hunger.
Public health has to be the priority—and Congress must make that financially plausible
Flattening the curve becomes more possible when fewer people must regularly leave their home to work and when those who are sick or are living with someone who’s sick have the financial and job security to be able to stay home to recover or provide care. Short of paying people to stay home in the first place, this approach is dependent on robust UI and extended and expanded paid leave.
Providing dedicated funding to cover rent or other fixed costs for small businesses, such as restaurants, bars, and music venues, would allow those businesses to fully cease indoor operations for the weeks or months necessary to flatten increasing case rates; this is particularly important for the small businesses that were largely unable to access earlier support. Aid to states and localities will relieve the pressure to allow businesses to be open for dangerous activities in order to maintain their tax revenue levels. Measures such as continued eviction moratoria help to safeguard public health: People who face a financial crisis or lose their home will be unable to isolate or distance to protect themselves and their communities. The economy and public health are inextricably linked, and financial support to individuals, businesses, and communities is a crucial element of any public health strategy during COVID-19.
In order to keep local and regional economies dynamic in the years ahead, support must target locally owned, smaller businesses specifically. Otherwise, the trend toward monopoly and the dominance of the economy by large corporations with less community engagement will continue even faster than before the pandemic began.
Congress must also prioritize funding for a comprehensive COVID-19 vaccination program, which would include an unprecedented vaccination advertising campaign, the assurance that all individuals can be vaccinated without out-of-pocket costs, and $13.3 billion for 3,000 additional community vaccination clinics nationwide—the number necessary to vaccinate 100 million people.
Another pandemic-related economic downturn is fast approaching
As COVID-19 case rates and spread eclipse spring levels in many parts of the country, the slow and uneven economic growth of the summer will take a hit. Early warning signs are here: an increase in long-term unemployment and decreases in consumer spending and time spent outside the home. Local officials may enact limitations on indoor businesses, but even in places without restrictions, consumers change their behavior out of fear.
Speed is key for intervention. Congress is set to gavel out for the year ahead of the winter holidays, but it is not yet done with its work 2020: Lawmakers have only two short weeks to come to a compromise and pass an end-of-the-year government funding bill by December 11. Attaching crucial aid to an omnibus spending bill, passing a continuing resolution, or bringing this aid to the Senate floor on its own is imperative to avoid the irreparable harm that will occur without action. In earlier relief legislation, Congress was smart to waive the constraints of yearly budget caps for earlier relief legislation—it should do so again, given that there is more than enough fiscal space to act. House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) have already indicated their desire to negotiate. Senate Majority Leader Mitch McConnell (R-KY) and his Senate allies should either come to the negotiating table or be prepared to own the public health and economic consequences. Lives and livelihoods depend on Congress acting with urgency.
Lily Roberts is the director of Economic Mobility at the Center for American Progress. Topher Spiro is the vice president of Health Policy at the Center. Maura Calsyn is the managing director of Health Policy at the Center. Ryan Collins is a director of Government Affairs at the Center.
Members of the Center for American Progress’ Women’s Initiative contributed to this column.
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