The HEROES (Health and Economic Recovery Omnibus Emergency Solutions) Act proposal is a needed Congressional effort to address the ongoing health and economic crises due to the coronavirus. This package, already passed by the U.S. House of Representatives, builds upon prior coronavirus response bills and presents a comprehensive approach that’s at the scale needed to respond to an economic crisis that is likely to be bigger than any other we’ve seen in our lifetimes. Now is the time for this comprehensive policy approach.
The scope of the economic downturn is staggering. Unemployment rates are higher than anything seen since the Great Depression. One in five American workers have applied for unemployment insurance since February. People of color are facing the highest levels of unemployment at the same time they are disproportionately harmed by the virus itself.
The coronavirus pandemic is affecting nearly every aspect of our lives, and the HEROES Act takes a multi-pronged approach to protect Americans’ health and livelihoods. It includes public health elements, like funding for testing, tracing, and treatment, and workplace safety standards; and protections for our democracy, like funding for the Postal Service, safe elections, and Census efforts. And the HEROES Act includes a variety of essential provisions aimed at alleviating hardship and preventing a deeper and more prolonged recession.
Economic supports for Americans and their families
The HEROES Act contains a package of policies targeted toward those facing the greatest economic hardships as a result of the coronavirus, including those who were left out of previous economic stimulus efforts. These measures include:
- A 15 percent increase for food assistance through SNAP, the Supplemental Nutrition Assistance Program. This is a win-win approach that helps families put food on the table and stimulates spending in grocery and other community stores.
- An extension of expanded federal unemployment insurance, like the additional $600 weekly boost, through January 2021. Without Congressional action, these benefits will expire July 31, 2020, despite continued high levels of unemployment. The Congressional Budget Office projects that unemployment will remain above 10 percent through most of 2021.
- A second round of stimulus payments sent directly to people. Importantly, this effort would include immigrants, teenagers and young adults, and adults with disabilities who were left out of the first round of stimulus payments sent in April.
- Boosting the incomes of lower-income workers and families through temporary expansions of the Earned Income Tax Credit and Child Tax Credit. These provisions would have a strong impact on reducing poverty, and reaching very low-paid workers without children (who have less access to assistance.)
- Additional housing assistance to help folks stay in their homes, make shelters safer, and provide temporary hotel-based housing for those who need it.
- Emergency aid and services to low-income people through the Social Services Block Grant. This effort will help those with very low incomes who are being disproportionately impacted by COVID-19 and the accompanying economic crisis; these are folks who are struggling to pay their rent, afford food, or get access to needed medical care.
Protecting education, health care, and other crucial state and local services
The HEROES Act contains essential aid for state, tribal, and local governments in the form of $540 billion in direct grants, as well as a boost to federal funding for health care through Medicaid.
The aid is much needed: with the economic recession caused by COVID-19, states are facing massive revenue shortfalls in many key funding sources, including sales and income taxes. The Center on Budget and Policy Priorities estimates that nationwide, states are facing revenue shortfalls of $555 billion over a three-year period, and that does not include the increased costs of responding to the pandemic. These budget holes can lead states to cutting much-needed services just as the demand for them increases; layoffs in public sector workers, such as teachers or public works employees, would make the economic recession worse. Across the country, 1.5 million state, local, school district, and higher education workers have been laid off or furloughed, including one million just in April 2020. The nonpartisan National Governor’s Association recently wrote a letter to Congress expressing support for much-needed aid to states and local governments.
Minnesota could receive an estimated $8 billion over the next two years, which could go a long way toward funding schools, health care, affordable housing, and other essential services provided at the state and local levels.
The economic boost that aid to state and local governments is clear. The Congressional Budget Office recently announced that this type of aid has a bigger positive impact on the economy than federal spending to reduce business taxes.
The HEROES Act would also continue to increase the federal government’s share of funding for Medicaid through the Federal Medical Assistance Percentage (FMAP) rate, and maintain that higher level through June 2021. The FMAP is an important and crucial tool in the toolbox that makes sure folks can receive health care coverage that is so vitally needed in this pandemic, while also protecting other essential state services that Minnesotans count on.
Room to improve
Of course, nothing is perfect. We’d like to see these relief measures tied to economic recovery, rather than ending on arbitrary future dates when the economy may or may not actually be working better for folks. The bill’s proposed temporary increases in income tax deductions related to state and local tax payments (also known as SALT) don’t help most folks: the 5 percent of households with the highest incomes overwhelmingly see the benefits of that proposal.
But overall, the HEROES Act is an important, essential way to respond to the grave crises facing our nation. We applaud the U.S. House of Representatives for taking action to help Americans during this time of unprecedented challenges, and we urge the Senate to do the same.