Week Ending March 27, 2020

Congress Responds to Coronavirus Crisis with Massive $2.2 Trillion Relief Package

Helping Americans and the Economy

Congress has passed a third coronavirus response package. The Senate approved it by a 96-0 vote late Wednesday and the House by voice vote on Friday. The massive bill includes $2.2 trillion to help Americans and stimulate the economy. The “Coronavirus Aid, Relief and Economic Security (CARES) Act” (H.R.748), includes direct cash payments of $1,200 to adults and $500 per child, with these amounts starting to phase out for those earning $75,000 a year (individual) or $150,000 (joint) and will be fully phased out at $99,000 (individual) and $198,000 (joint); loan and assistance programs for businesses, states and municipalities; and funding increases for hospitals and health care providers. The package also includes large increases in funding to many public services, including for education, child care, disaster relief, and much more.

Negotiations lasted five days between Senate Republicans and Democrats, the speaker of the House and the administration. Senate Democrats blocked two procedural votes to advance the bill because an earlier version prioritized corporations and not workers. Important concessions were won to ensure stricter oversight over the funds. At the last minute, three Senate Republicans held up the bill because they were concerned that expanding Unemployment Insurance would encourage workers to stay home because they would be paid more via unemployment than what they were making while employed. Their amendment failed.

Laying down a robust marker earlier in the week, House Democrats introduced the “Take Responsibility for Workers and Families Act” (H.R. 6379), a $2.5 trillion stimulus package that influenced negotiations and also covered other needs, including a major expansion of vote-by-mail programs, emergency rental assistance, broadband for low-income people, forgiveness of some student debt and a massive investment in a permanent emergency fund for public health crises. These and other issues that didn’t make it into the final bill are still on the table for a subsequent package that will become necessary later in the spring.

Although the third coronavirus relief package, H.R. 748, does not cover everything needed to alleviate the dire health crisis the nation faces, it is a start. It includes some important assistance to state and local governments and needed funding to help with this pandemic, but more will be needed to address fiscal issues that are confronting governments at all levels as the economic effects of COVID-19 are fully realized. The following are key provisions of interest to our members:

  • Direct Grants to State and Local Governments$150 billion in a Coronavirus Relief Fund that appropriates direct grants to state and local governments. After an $11 billion set-aside for Washington, D.C., Puerto Rico, territories and tribal governments, and a minimum grant of $1.25 billion per state, the remaining funds would be allocated to the states based on population. Localities with populations exceeding 500,000 people are eligible for direct federal assistance based on a formula that that multiplies the percentage of the state’s population in the locality by 45%. These funds may not be used to address the effects of collapsing revenue due to the economic recession. AFSCME will continue to fight for additional assistance.
  • Extension of Loan Authority to Municipal and State GovernmentStates and municipalities are eligible to participate in loan programs capitalized by $454 billion. Under criteria developed by the Treasury Department and applied by the Federal Reserve Bank, governments and businesses may receive direct loans, the Fed may purchase bonds in the secondary market to support the bond market and collateralized loans will be available. The $545 billion allocation will be leveraged to provide as much as $4.5 billion in loans to support liquidity in the public and private sectors. Details on how the various programs under the law will operate should be available very soon. The bill directs the Treasury Secretary “to endeavor to implement a program” that provides liquidity to the financial system to support lending to states and municipalities. This would operate along the same lines as previous financial stimulus laws. This would provide secondary market liquidity.
  • Education: Direct Grants and Student LoansThe bill provides $30.75 billion for education, with $16.5 billion to states for K-12 schools and $14.25 billion to higher education institutions.
    • The legislation also helps current borrowers with their student debt burden. It suspends payments on student debt for six months with no penalties and requires that suspended “payments” count toward Public Service Loan Forgiveness (PSLF).
    • The bill also provides $750 million for Head Start and $3.5 billion for the Child Care and Development Block Grant (CCDBG) to cover, among other costs, salaries and wages for providers and copays for parents.
    • It also mobilizes emergency child care for workers deemed “essential to the coronavirus response by public officials” and strips income eligibility requirements to ensure that health sector workers, emergency responders, sanitation workers and others have access to child care. The funds are also available to all child care providers, even if they do not serve children receiving subsidies, for the purposes of cleaning and sanitation and other activities necessary to maintain or resume their programs.
  • Hospitals and Medical Facilities – The bill provides more than $100 billion in needed funds for hospitals and medical facilities. These funds will help address critical gaps in personal and protective equipment for health care workers, testing supplies, increased workforce and training, and an increase of the Strategic National Stockpile.
    • The bipartisan deal doesn’t require the president to invoke his authority under the Defense Production Act to order industries to produce personal protective equipment and medical supplies that are in dire shortage. But $1 billion is available to finance the Defense Production Act mobilization to pay for industry contracts to quickly ramp up production of personal protective equipment, ventilators and urgently needed medical supplies, and billions of dollars more for federal, state, and local health agencies to purchase such equipment.
    • The bill still leaves unprotected workers who are putting themselves in harm’s way because it fails to direct the Occupational Safety and Health Administration (OSHA) to issue a temporary emergency standard on COVID-19. Health care workers and others at high risk are working in a “Wild West” situation, without rules, with dwindling levels of protection due to the lack of protective equipment, and without a standard.
  • Medicare – The bill helps keep seniors and individuals with disabilities safer by making some changes to Medicare. Medicare Part D plans will now be required to allow fills and refills for covered prescription drugs for up to three months. When there is a vaccine for COVID-19, Medicare beneficiaries will be able to get it through their Part B coverage at no cost. The bill also increases telehealth opportunities so beneficiaries can visit a doctor without having to leave their home.
  • Delay in Medicaid Cuts – Medicaid cuts to safety net hospitals, which were scheduled to take effect in late May, are blocked through Nov. 30, 2020, and funding for Certified Community Behavioral Health Clinics is extended through that date as well.
  • Unemployment Insurance Expansion The bill includes $250 billion to establish two temporary UI programs that will quickly put money in the hands of those who have been laid off. The Pandemic Unemployment Assistance (PUA) program provides UI benefits to workers who are ineligible for regular benefits under state law, such as self-employed or independent contractors, and the Federal Pandemic Unemployment Compensation (PUC) program provides a temporary unemployment compensation of $600 a week to workers eligible for state or federal unemployment on top of their state or federal benefits, and to workers receiving benefits under the PUA. It also provides $100 million in grants to states that enact work-sharing programs that provide partial benefits to individuals with reduced hours.
    • Although these federal programs will quickly put money in people’s pockets, the bill includes a harmful emergency state staffing flexibility provision that allows states to temporarily waive merit-staffing requirements through Dec. 31, 2020. The bill also lacks additional funding for states to administer UI benefits.
  • Federal, State and Local Law Enforcement – The bill includes $850 million for the Byrne-Justice Assistance Grant Program (Byrne-JAG). Byrne-JAG is the most flexible of federal law enforcement grant programs, and will allow state and local police departments and jails to meet local needs, including the purchase of personal protective equipment and other needed medical items and to support overtime for officers on the front lines.
  • Transit Systems and Airports – $25 billion is provided to public transit operators to protect public health and safety while ensuring access to jobs, medical treatment, food and other essential services during the COVID-19 response. It provides $10 billion in grants to help U.S. airports as the aviation sector grapples with the steepest and potentially sustained decline in air travel in history.
  • Housing, Community Development Block Grants (CDBG)$685 million for the Public Housing Operating Fund, which will help Public Housing Authorities (PHAs) operate and maintain their public housing units. It also includes $5 billion to fund the Community Development Block Grant (CDBG) program, which is a direct flexible grant that participating jurisdictions can use to fund their priorities.
  • Election AssistanceCongress provides $400 million for states and localities to secure the 2020 primary and general elections. These funds fall far short of what state officials need, but are an important increase over the $140 million initially proposed. The funds are intended to ensure both the public’s safety and an inclusive and fair voting process. This includes an increased ability to vote by mail, expanded early voting and online registration and increased safety of voting in-person by providing additional voting facilities and more poll workers.
  • Nutrition Funding – The bill includes $15.5 billion in additional funding for SNAP to handle current and increased caseloads due to the virus. It also includes $8.8 billion in additional funding for child nutrition programs to ensure children receive meals while school is out. However, the bill lacks a 15% increase in allotments for individuals and households and increased benefits from $16 to $30 for a household of no more than two members.
  • Social Security AdministrationThe bill allows for $338 million for the Social Security Administration’s (SSA) Limitation on Administrative Expenses (LAE) account to fund the operating expenses of SSA programs and services for field operations via telephone or through the internet. This includes the OASI and DI programs, the SSI program and certain health insurance and Medicare prescription drug functions. This money allows SSA to perform its core responsibilities, including completing claims and applications for benefits and ensuring benefits continue to be distributed on time. The package temporarily defers the employer payroll tax payment to Social Security until Dec. 31, 2020, but it holds the Social Security Trust Fund and other funds harmless.
  • FEMA Disaster Relief Fund$45 billion for FEMA’s Disaster Relief Fund to provide for immediate needs of state, local, tribal and territorial governments to protect citizens and help them recover from COVID-19. Reimbursable activities may include medical response, personal protective equipment, National Guard deployment, coordination of logistics, safety measures and community services nationwide.
  • Paid Leave This package gives OMB authority to exclude certain executive branch employees from receiving both paid sick leave and FMLA. It clarifies that some workers who were laid off would now have access to Paid Family and Medical Leave if they are rehired. It also allows employers and those who are self-employed to receive advanced Paid Leave tax credits from the Treasury Department instead of having to wait to be reimbursed for the cost, but it failed to extend coverage to many workers excluded under the provisions of the second coronavirus relief package.
  • Safeguards on Bailouts for CorporationsBans stock buybacks for the term of the government assistance plus one year on any company receiving a government loan under the bill. It also establishes robust worker protections attached to all federal loans for businesses. In an important precedent, medium sized businesses (500 to 10,000 workers) who receive loans must commit to organizing neutrality for the life of the loan and cannot abrogate collective bargaining agreements.

What You Need to Know: Although this package provides much needed-funding to help front-line workers and the economy, a fourth coronavirus response bill is expected to be introduced to further assist with combating this virus and helping the economy. AFSCME will continue to push for more state and local funding, resources and equipment for our health care workers, first responders, EMS, and other essential personnel who have been on the front lines. We also will continue to push for further assistance to states and localities to meet increasing demands for services. The House and the Senate are not expected to be back in session until later in the spring.

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