March 20, 2020 under Featured

Federal Funding to Fight the Coronavirus Recession

by Derek Thomas

Early last Saturday morning, the U.S. House of Representatives passed comprehensive legislation that would begin to ease the economic hardships Americans are facing right now as a result of the developing coronavirus crisis. After modifications from the House that weakened sick leave provisions, the Senate voted Wednesday to pass the The Families First Coronavirus Response Act.

The legislation, which President Trump is expected to sign, provides free coronavirus testing, increases funding for states’ Medicaid costs, strengthens food security initiatives, enhances unemployment insurance, and provides paid sick leave and paid family and medical leave through refundable payroll tax credits.

Congress deserves recognition for acting swiftly on what’s being referred to as Phase Two of their response – Phase One being the $8.3 billion spending package that focused on tests, treatment, vaccines, and telehealth provisions.

However, business has grinded to a halt and millions across the nation are already unemployed. In New York City, The Center for New York City Affairs found that, as a result of public health-mandated closings, as many as a half-million low-paid and vulnerable workers in New York City restaurants, hotels, museums, movie and television production, taxis, ride-hailing apps, and other lines of work will lose their jobs and incomes. That’s more than $1 billion in lost wages. In March alone.

The severity of the coronavirus recession will depend on policy choices made now. And reflecting on the recent decade-long economic growth period – which, in part due to budget austerity, left too many Americans behind, and disproportionately people with low incomes and communities of color and immigrants  – is instructive.

We at FPWA and our coalition partners in the Federal Tax and Budget Response Team – which serves over 3 million New York City residents each year – are asking the city’s congressional delegation to prioritize low-wage and vulnerable workers and human service providers in Phase Three of the federal response to coronavirus and its effects.

By protecting those whose jobs have been sacrificed to protect the public’s health and those serving on the frontlines who are responding to the growing needs of their communities, Congress can stave off a severe economic recession.

In addition to these concerns, national advocates representing human service providers and low-wage workers are rightly concerned about the following (among other things):

The bill reduces the state’s Medicaid share by 6.2 percentage points, meaning New York will now pay 43.8 percent of costs instead of 50 percent. However, this may prove to be insufficient given the extent to which the state budget will be squeezed by falling tax revenue and increasing costs.

A paid leave provision that focused on survivors of domestic violence, sexual assault, and stalking and their leave was stripped from the bill, and; the Act does not ensure that caregiving covered by both paid sick days and paid leave includes all caregiving for adults and children with disabilities.

The revised version of the Act only provides paid family leave of up to 12 weeks to people taking care of kids who aren’t in school. In the original version, all workers who received paid sick time would have been eligible for another 10 weeks of paid leave at two-thirds pay.

The Act does not provide resources to shelter providers to quickly and permanently house people who are homeless and at high risk of infection.

Workplace safety standards for health care workers were scrapped by industry lobbyists.

Food assistance benefits through the Supplemental Nutrition Assistance Program (SNAP) should be increased across the board as they were in response to the Great Recession.

Although the Act ensures access to free coronavirus testing, even for the uninsured, the legislation does not address treatment costs for the uninsured, and those with private insurance may face complications in the event of hospital bed shortages.

And while the bill addresses nutrition assistance for older adults, it does not address health insurance affordability and access to home and community-based services to reduce the risk of infection.

The coronavirus outbreak is an unprecedented crisis, but policymakers can reduce the economic risk and human toll by acting with continued urgency towards passage of Phase Three.

Derek Thomas is Senior Fiscal Policy Analyst at FPWA. On Twitter @dlthomasNYC and @FPWA.

The New York Federal Tax and Budget Response Team works together to protect and strengthen federal human services programs and policies that support low- to middle-income New Yorkers. We are a state-based coalition whose members include FPWA, Catholic Charities Archdiocese of New York, UJA-Federation of New York, Fiscal Policy Institute, New York Housing Conference, LiveOn NY, Human Services Council of New York, United Neighborhood Houses, Food Bank For New York City, Urban Justice Center, and Children’s Aid. Together, the umbrella organizations represent hundreds of faith-based and human-service organizations and serve together more than 3 million New York City residents each year.