Week Ending May 15, 2020

House sends the Heroes Act with state and local aid to the Senate.

• House Passes Needed $3 Trillion COVID-19 Response Bill
• Voting Rights Amid COVID-19

House Passes Needed $3 Trillion COVID-19 Response Bill 

The House late Friday passed the "Health and Economic Recovery Omnibus Emergency Solutions Act," or The Heroes Act (H.R. 6800), and is sending it to the Senate. Our country is being ravaged by an unprecedented and extraordinary public health and economic emergency that touches all families. H.R. 6800 is a bold response to stabilize our economy and help families survive the health and economic harm caused by COVID-19. Importantly, it provides urgently needed aid to states and localities, protects workers on the front lines, provides front-line workers with premium pay, provides needed unemployment and food assistance, and addresses the health care needs of workers who have lost their jobs.  

Direct State and Local Aid Provided to Fund Front-Line Workers. Workers on the front lines deserve respect, not pink slips. The bill provides nearly $1 trillion to states and local governments to help replace huge revenue losses that are causing deep budget shortfalls and to help prevent layoffs of the front-line heroes. 

• The bill includes $540 billion for the Coronavirus Relief Fund ($500 billion for states, $20 for territories and $20 billion for tribes) and makes those grants flexible. It also retroactively treats the District of Columbia as a state.
• Under the bill’s Coronavirus Local Relief Fund, counties would divide $187.5 billion and cities, towns and localities would share another $187.5 billion.

Increases Federal Medicaid Funds to States. As states see revenues evaporate, they are seeing an increase in demand for Medicaid services due to unemployment rates approaching those last seen in the Great Depression. Medicaid accounts for over half of all federal revenue for states, but states are struggling to maintain their required share of Medicaid costs. The Heroes Act addresses this problem by shifting more Medicaid costs onto the federal government during this public health emergency.

• The bill increases the federal share of Medicaid costs by a total of 14 percentage points, starting July 1, 2020, through June 30, 2021. It would drop back to the earlier 6.2- percentage point increase if the public health emergency continues beyond July 1, 2021.
• For Medicaid home-and community-based services (HCBS), the bill adds a separate 10-percentage point increase on top of the 14-percentage point increase. These new HCBS funds can be used to increase provider rates, pay for personal protective equipment, training, sick leave, overtime and hazard pay.
• The bill temporarily increases Medicaid disproportionate share hospital (DHS) allotments by 2.5% to help safety net hospitals.

Protects Workers on the Front Lines. Workers on the front lines deserve respect in the form of personal protective equipment, strong safety protections and the recognition of the daily risks they take to serve our communities. 

• OSHA Safety Standard – Requires the Occupational Safety and Health Administration (OSHA) to issue an emergency temporary standard to protect workers at elevated risk of exposure. Protects all public sector workers at elevated risk by broadening the definition of “employer” to include all states and political subdivisions not currently covered by OSHA.
• Improves Access to Personal Protective Equipment – Shortages of personal protective equipment (PPE) and the national mismanagement of these and other medical supplies puts front-line workers and the public at even more risk. The Heroes Act expands and strengthens the use and oversight authorities of the Defense Production Act (DPA) to help America produce, procure, allocate and distribute vital PPE, like N-95 respirators and other needed medical supplies and equipment.
• New Heroes’ Fund – Provides nearly $200 billion to ensure that essential workers, including corrections officers, all EMS workers, home care workers and others who have risked their lives by working during the pandemic receive premium pay. Essential workers are defined as those who perform work that cannot be done by teleworking during the COVID-19 pandemic. These workers would receive pandemic premium pay in the amount of $13 per hour in addition to their base salary, up to a maximum of $10,000 and up to $5,000 for an essential worker paid $200,000 or more annually. A lump sum would be granted to the next of kin if there is a death. Premium pay is provided from Jan. 27, 2020, to 60 days after the COVID-19 health emergency ends.
• Supports Testing, Tracing and Treatment – Provides $75 billion for coronavirus testing, contact tracing and isolation measures, which help protect front-line workers and the public. These funds also ensure that every American can access free coronavirus treatment; the funds also support hospitals and providers.

Helping Families Survive. The Heroes Act includes numerous provisions to help families survive the economic turmoil from COVID-19.

• Maintaining Job-based Health Coverage – Provides a 100% federal subsidy for COBRA coverage and furloughed workers’ share of premiums. Subsidies are available through January 2021.
• Increasing Health Coverage Options – Requires new special enrollment periods for the Affordable Care Act and Medicare so that unemployed individuals have greater choice of health coverage.
• Cash Payments to Individuals – Provides another $1,200 refundable tax credit for each family member paid out in advance payments (similar to CARES Act). This credit is $1,200 per taxpayer up to a maximum of three dependents. This tax credit starts to phase out at $75,000 per person of modified adjusted gross income ($150,000 for joint filers; and $112,500 for head of household filers) at a rate of $5 per $100 of income. 
• Extended Unemployment Benefits – Ensures weekly $600 federal unemployment payments through next January, providing a vital safety net for the record number of Americans who are unemployed. Provides $925 million to assist states in processing unemployment insurance claims, and $15 million for the federal administration of unemployment insurance activities. Extends the previously created three pandemic unemployment programs through Jan. 31, 2021. Extends full federal reimbursement of extended unemployment through June 30, 2021. Short-time compensation is extended through Jan. 31, 2021.  
• Homeowners Assistance – Provides $75 billion in assistance for homeowners, $100 billion for emergency aid to help low-income renters avoid evictions, and $750 million for people living in project-based rental assistance properties. 
• Food Assistance – Provides $10 billion in new funding for the Supplemental Nutrition Assistance Program (SNAP) and $3 billion for child nutrition programs, among other food assistance. Provides $150 million for FY 2020 and $150 million for FY 2021 for state administrative expenses. Increases the SNAP benefit level by 15%. Increases the minimum SNAP benefit from $16 per month to $30 per month through Sept. 30, 2021. Waives all work requirements for SNAP and excludes the Pandemic Unemployment Compensation (PUC) as countable income for SNAP benefit calculation. Prevents the implementation of harmful proposed and final rules for nutrition. Allows the use of SNAP to purchase hot foods or hot food products ready for immediate consumption from authorized retail food stores. Provides additional $1.1 billion to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program.
• Paid Sick Days and Paid Leave – Expands emergency paid leave to cover more individuals and expands ability to use paid sick leave and paid leave. It also extends the sunset date from Dec. 31, 2020, to Dec.31, 2021 (including the employer tax credits) and eliminates the employer exemptions. 

Additional Funding for Census, Education, Transportation, and Other Programs.

• Census – Many federal funds are distributed based upon state and local population, making an accurate census count crucial to state and local funding. The Heroes Act provides the Census Bureau with $400 million to deal with pandemic-related delays to the 2020 count and $10 million for the current survey and programs (Census Working Capital Fund) for expenses incurred as a result of the coronavirus – including overhead costs.
• Education – Provides about $90 billion until Sept. 30, 2022, to prevent, prepare for and respond to the virus. About $58 billion (after some set-aside funding) would be distributed for K-12 education based on the Title I formula, and 30% of the remainder (about $27 billion) would be used for public postsecondary education, with 75% of the higher education funding based on the number of Pell Grant recipients not previously enrolled solely in distance education. Also provides $7 billion for the Child Care Development Block Grant (CCDBG).
• Transportation – Provides $15 billion for grants to support the ongoing state transportation work needed to mitigate the effects of coronavirus, including the salaries of staff and other administrative expenses. Also includes an additional transit emergency relief fund of $15.75 billion for operating assistance grants to support the transit agencies that require significant additional assistance to maintain basic transit services. Of these amounts, $11.75 billion will be distributed by formula and $4 billion will be available to any grantee or sub-recipient by application to the transportation secretary.

Tax Provisions.

• Repeals SALT Cap of $10,000 for 2020 and 2021 – Eliminates $10,000 limit on individual taxpayers’ itemized deduction of state and local taxes (SALT) for 2020 and 2021.
• Repeals $150 Billion Tax Break for Net Operating Losses (NOL) – This provision repeals a $150 billion tax break for the recently enacted NOL, which disproportionately benefits 43,000 taxpayers with annual incomes exceeding $1 million by providing them with an average $1.6 million tax break.

What You Need to Know: To become law, the Heroes Act must clear the Republican-controlled Senate, where Majority Leader Mitch McConnell (R-Ky.) has shown no interest in moving this much-needed emergency aid. But AFSCME continues to press for passage. Many jurisdictions are facing rising costs from the health pandemic and plummeting revenues because of the failing economy. Mayors, governors, senators and others from both sides of the aisle are recognizing that robust assistance to our state and local governments is instrumental to beating this pandemic and reopening our economy. President Saunders made it clear when he said, “A crisis of this magnitude demands the boldest possible response, and this bill meets the moment. … The House and the Senate must move quickly to include robust general grant assistance to states and municipalities so they can maintain services now and into the immediate future, when they are needed most.”

Voting Rights Amid COVID-19

On Wednesday, Sens. Amy Klobuchar (D-Minn.) and Ron Wyden (D-Ore.) assembled a press event with AFSCME President Lee Saunders, along with labor presidents from AFL-CIO, AFT, NEA, and SEIU, to discuss protecting voting rights in the time of COVID-19. Klobuchar’s efforts come on the heels of the introduction of the “Natural Disaster and Emergency Ballot Act” (NDEBA) of 2020 (S. 3529) along with 35 other Democrats.

• Provisions in the Bill – This legislation provides funding and commonsense resources to states to address the challenges this pandemic poses for upcoming primary and general elections and future elections. It ensures that Americans are still able to vote by expanding early in-person voting and no-excuse absentee vote-by-mail to all states; many of the provisions are in the Heroes Act, which passed this week.
• President Lee Saunders Statement – During the event, President Saunders said, “The fact of the matter is that labor rights and voting rights are deeply interconnected. When there is free and unfettered access to the ballot box, then an agenda that lifts up working people prevails. When we expand political participation, that’s when we elect people who believe in an economy that works for everyone.”
• Related Legislation – This week, AFSCME also worked with House Majority Whip James E. Clyburn (D-S.C.), Sen. Kamala D. Harris (D-Calif.) and Rep. Marcia Fudge (D-Ohio) on the introduction of the VoteSafe Act, legislation to expand voting options and improve the safety and accessibility of polling places across the country during the COVID-19 pandemic. 

What You Need to Know: Voting rights is and will always be a top priority. COVID-19 highlights the necessary reforms needed to keep voters and poll workers safe while also ensuring fair elections. The Heroes Act passed by the House this week provides $3 million to the Election Assistance Commission for FY 2020. It also provides $20 million for grants to states for risk-limiting audits, and vote-by-mail provisions, including the option for same day voter registration.