What will the next coronarvirus aid package look like?

Lawmakers, advocates offer ideas for Congress to fund relief as toll mounts from the pandemic

The national flag of USA sticking in a pile of american dollars
The national flag of USA sticking in a pile of U.S. dollars (Getty images stock photo.)

Elizabeth Carey was working part-time at the Eau Claire coffeeshop her husband managed when Wisconsin’s COVID-19 emergency health order went through, shutting down bars, restaurants and many other businesses. Both of them lost their jobs, but the federal $1,200 stimulus check and $600-a-week supplemental unemployment pay allowed them to hang on — so far.

“It definitely helped us be able, not just to pay the bills and stay financially stable through this time, but to put money back into our community,” Carey says. Without that support, she believes, small businesses like the one she worked for might not have survived. “A lot of small businesses are struggling now.”

In less than two weeks, that $600 weekly supplemental unemployment is scheduled to run out. One bill that would extend it has already passed the U.S. House of Representatives, but so far it’s stalled in the Senate.

This could be a critical week as Congress considers what will be in the next big federal legislative package for relief from the ravages of the pandemic to public health and to the economy. Renewing the supplemental unemployment payment is just one of several items on the agendas of lawmakers and advocates hoping to shape the legislation that would be the sequel to the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The U.S. Census Bureau has been mapping the pandemic’s economic impact over the last 10 weeks with surveys of the public. Nearly half of all households have reported lost work income every week since the start; around 40% have put off medical care; and one in four have gotten behind on rent or mortgage payments.

Wisconsin’s track record had been a little better during much of that time, with some exceptions: More households have reported putting off medical care than in the rest of the country, for example.

But in the most recent poll, the share of households in the state reporting that they’ve lost work income is close to the country as a whole. And with new COVID-19 cases already increasing at record rates over the last month, chances appear dim that conditions will improve soon.

Head shot of Tamarine Cornelius of Kids Forward
Tamarine Cornelius of Kids Forward

“I do think, given the scale of the crisis, that federal aid is going to be key,” says Tamarine Cornelius, an analyst for the Wisconsin Budget Project, sponsored by Kids Forward, a Madison advocacy group for families and children.

Carey would like to see the unemployment bonus extended, and perhaps additional payments to people like the one-time stimulus check. She’s heard about big companies that cashed in on the Paycheck Protection Program that was billed as a financial lifeboat for small business. “I’d like to see further financial aid to the middle and lower class instead of the top 1% of businesses,” she says.

What sort of aid will come and what the priorities in a new aid package will be remain uncertain. Democrats in the House of Representatives in May passed a batch of proposals they called “The Heroes Act” that included extending the $600 unemployment supplement —but that bill has stalled in the Republican-controlled Senate.

Sen. Tammy Baldwin headshot
Sen. Tammy Baldwin

“I would have hoped that the United States Senate would have taken up that legislation … immediately after receiving it from the House of Representatives back in May,” Sen. Tammy Baldwin (D-Wis.) said during an online media event with Wisconsin Citizen Action on July 8. “But unfortunately, Majority Leader Mitch McConnell has refused.”

Besides the supplemental unemployment extension, other provisions competing to be included in the next edition of COVID-19 relief include:

  • Relief for state and local governments. The pandemic is straining many services funded through municipal and state tax dollars, including public health — and it’s straining them at a time when the income supporting those services is stretched thin because of lost tax revenues.

“Clearly, revenue shortage is a major issue for us here in our state, but also every state in the union,” Gov. Tony Evers said during a telephone media briefing earlier this month — hurting the state’s economy as well as local government resources. The Heroes Act includes $500 billion for the states and $375 billion for local governments.

Lost revenues “could force the state to implement austerity measures,” says Cornelius of Kids Forward. Without federal relief, “states are going to have to shut down important services for families and communities.”

Evers favors federal help for the states and for local government. But 43 Republican state lawmakers have urged Wisconsin’s Congressional delegation to reject state aid, claiming it would reward “irresponsible” spending in other states.

  • Help for hospitals. “Wisconsin hospitals have experienced more than $2.5 billion in lost revenue but have received about $1 billion in relief,” says Eric Borgerding, president and CEO of the Wisconsin Hospital Association (WHA). “Hospitals and health systems should remain a priority in order to make sure all patients – COVID and non-COVID – have access to care.”

One group of hospitals particularly concerns the association: facilities that are neither in rural communities nor in places that the federal government has identified as COVID-19 hot spots. “Those hospitals seem to be falling through the cracks for relief but have not been immune to the significant lost revenue challenges,” Borgerding says.

  • Utility costs. Included in the state’s emergency health order that the Wisconsin Supreme Court canceled on May 13 was a moratorium on utility disconnections. The state Public Service Commission has since authorized utilities to disconnect customers for nonpayment starting July 25. The Citizens Utility Board (CUB) — a utility consumer-advocacy group — is calling on utilities to delay disconnections to consumers who, because of the pandemic, have been unable to pay their bills, according to Tom Content, CUB executive director.

Through the CARES Act, the Wisconsin Home Energy Assistance Program received $8 million in additional funding to help people who have been unable to keep up with their power bills. The state has also used CARES Act funds for a $25 million rental assistance project. CUB is part of a utility-consumer coalition that, along with the utility industry, has asked Congress for $4 billion to increase energy assistance funding.

  • Housing. The CARES Act put a moratorium on evictions for people who receive federally subsidized housing — about one-third of all renters — but like the supplemental unemployment pay, that expires later this month. State moratoriums on evictions, including in Wisconsin, are already expiring, and evictions are rising again.

Housing advocates want the federal moratorium extended and expanded “so that it covers all renters,” Sarah Saadian, vice president for public policy at the National Low-income Housing Coalition, tells the Wisconsin Examiner. That’s in the House-passed Heroes Act, along with emergency rental assistance for  tenants once the eviction moratorium ends; provisions to temporarily house homeless people in hotels and motels; and help for them to move into permanent housing.

“Especially now that we’re seeing a resurgence of COVID, especially in southern states, I think we’re going to see really large numbers of homeless and evictions,” Saadian says.

  • Child care and education. Senate Democrats, including Baldwin, are proposing $430 billion to go to schools, colleges and child care providers that would pay for a variety of costs, including for personal protective equipment (PPE) for staff, modifications to classrooms to make it easier to implement physical distancing to curb the spread of the virus and other pandemic-related costs. For the child care system — already losing more than a third of providers in Wisconsin due to the pandemic — the measure also seeks to keep providers operating and workers paid.
  • Unemployment, poverty, jobs. Other proposals from Baldwin, address several facets of jobs and the economy. One that extends the $600 supplemental unemployment benefit through the end of 2020 would also expand Work-Share, a federally enabled state program that allows employers with slack demand for labor to keep workers on at reduced hours, using unemployment compensation to offset their lost wages.

Another proposal from Baldwin and other Senate Democrats would fund an expanded transitional jobs program, subsidizing employment and training for public and private employers who put people to work. Although offered as a potential ingredient in the next COVID-19 relief plan, the bill would extend beyond the pandemic as a long-term poverty-fighting project, with additional federal assistance in times of high unemployment.  

"Ron Johnson" by Gage Skidmore is licensed under CC BY-SA 2.0
“Ron Johnson” by Gage Skidmore is licensed under CC BY-SA 2.0 CC BY-SA 2.0

Any or all of these proposals are likely to face resistance. Sen. Ron Johnson (D-Wis.), for instance, has criticized enhanced unemployment as a disincentive to work. Supporters of the bonus pay, though, say that’s part of the point: They argue it can help curb the spread of COVID-19 by taking pressure off people to go to work and increase exposure to the virus — for themselves or others. 

On Sunday, Axios published a report that publisher Steve Forbes and Stephen Moore, an economist, were telling President Donald Trump that he shouldn’t sign legislation extending the unemployment bonus for fear of wrecking the economy.

Carey, the laid-off Eau Claire coffee shop employee, says it “would be a huge mistake” if the extra $600-a-week gets cut off. She fears that any short-term economic rebound would just set the stage for a bigger economic crash to follow, while cash could help people keep their communities afloat so businesses can act with care to  reduce the risk of exposure.

Otherwise, “I’m worried that a lot of businesses are going to be forced to reopen entirely instead of focusing on online sales and keeping things safe for themselves and the community,” Carey says. “Or they’re going to be forced to close entirely.”