In a not-so-shocking, but still unbelievable, turn of events, Congress has adjourned for the summer without settling on a new stimulus package. While we can’t pass a bill to get rid of the virus, Congress can make attempts to alleviate the economic impact.
To follow the CARES Act and its expiring measures, the GOP introduced a trimmed down stimulus package called the HEALS Act and Democrats countered with their own proposal called the Heroes Act. Congress was unable to reach a compromise in a classic stalemate for the two parties — Republicans want to spend less, and Democrats want more comprehensive measures.
Since they have until Labor Day (when lawmakers return to D.C.) to mull it over — we have some ideas on what the package should include.
1. Extended eviction ban
Due to the pandemic, 23 million people could face eviction this fall. Some form of eviction protection or rental assistance should be in the next stimulus package, as well as measures to aid landlords who can’t pay a mortgage or face foreclosure due to an inability for their tenants to pay rent.
Though President Trump has called for Congress to extend the eviction ban under the CARES Act, his recent executive order regarding housing doesn’t solve the issue. The memorandum simply lays out instructions for the Department of Health and Human Services (HHS) and the Centers for Disease Control (CDC) to explore whether it is reasonably necessary to place a ban on evictions to prevent COVID-19 spread. The U.S. Treasury Department and the Department of Housing and Urban Development (HUD) have also been instructed to find funding for assistance for renters and homeowners having trouble making rent.
Diane Yentel, president of the National Low Income Housing Coalition (NLIHC), responded in a statement by calling the executive order, “an empty shell of a promise that does nothing to prevent evictions and homelessness and acts only to mislead renters into believing that they are protected when they are not.”
2. Hazard pay for essential workers
Despite pushes to social distance, wear masks and stay home — an estimated 55 million essential workers are at risk of catching COVID-19 every day to provide essential services. This is especially true for health care workers who are in the frontlines of the disease. Hazard pay is an additional compensation for workers risking their lives to do their jobs and a pandemic that has caused over 170,000 deaths certainly qualifies.
Some cities and states are already enacting their own hazard pay program. Representatives of both parties have expressed interest in the idea. The Heroes Act includes an allocation for hazard pay, and Sen. Mitch Romney (R-UT) introduced a proposal in May.
3. Detailed student loan relief
Extended student loan relief isn’t high on the list for a streamlined stimulus package among representatives. But with $1.6 trillion in collective student debt, among 45 million borrowers, we’d argue it’s important.
President Trump signed an executive order in early August that extends the CARES Act student loan relief through the end of 2020. Student loan payments will continue to be paused and won’t accrue interest. Not every benefit was explicitly stated, however, and may not be covered by the memorandum. It’s unclear if the order includes borrowers in default, if debt collections can resume and whether the months of non-payments would count towards Public Service Loan Forgiveness.
Not only should the new relief package include details about these benefits, but it should also extend student loan relief into 2021. With a vaccine years out, the economy in a recession and the time it takes for new relief bills to pass, it’s best to plan ahead for the inevitable.
4. Sufficient unemployment benefit
The extra $600 per week unemployment insurance benefit has expired and left many without enough to make ends meet. When you’ve forced businesses to close, causing a spike in unemployment, you can’t leave workers on the sidelines. President Trump seems to agree. The administration has issued an executive order that guarantees those on unemployment an additional $300 per week ($400 if your state decides to relegate funding to it.) In order to qualify, you must be receiving at least $100 in unemployment (which could leave out part-time and tip workers.) Arizona and Texas have already started paying out the extra benefit, with more states on the way.
That’s half of the original benefit the CARES Act introduced, and when paired with a lack of eviction protection, it’s not enough to protect many Americans. Both the Heroes Act and HEALS Act propose an extra unemployment benefit, so it’s likely to exist in the new package in some form.
Though we’ve seen signs of an improving economy and job market since the pandemic first hit and the unemployment rate has dropped from its peak, joblessness is still at a historic high. It could be important to extend the benefit timeline and increase the number of weeks people can collect jobless benefits as reopening remains uncertain.
5. Another stimulus check
A poll by the Financial Times found that the pandemic has impacted 73% of American’s income. Another stimulus check is a small salve in a time of uncertainty, but it’s better than nothing. It also encourages economic stimulation. Some major retailers and restaurants like Wendy’s, Chipotle, Walmart, Apple and Lowe’s reported an increase in spending when Americans received a stimulus check in April.
But despite the momentary spending relief, consumer behavior alone should not determine economic wellness. Another stimulus check is a necessary lifeline for many, not an additional monetary compensation. Luckily, both parties proposed a second stimulus check with the same structure as the CARES Act.
Too long, didn’t read?
Congress’s inability to reach a compromise on the next stimulus package is disappointing, to say the least. Many American’s are facing an immediate crisis, and protections are expiring. The next round of legislation should focus on policies that can sustain the incomes of people unable to work or whose financial security has drastically changed due to the pandemic.
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Originally posted at https://www.thesimpledollar.com/financial-wellness/five-things-the-next-stimulus-package-needs-to-include/