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The $2.1 Trillion Coronavirus Relief Bill - What’s In, What’s Not, What’s Next?

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Federal aid to New York is coming, but how much (photo: Benjamin Kanter/Mayor's Office)

On Friday, the president signed into law The Coronavirus Aid, Relief, and Economic Security (CARES) Act. The $2.1 trillion CARES Act provides significant support for people, states, the health care system, small businesses, and yes, big businesses too. 
The historic legislation is the third in a series of swift responses by Congress to ameliorate the immediate and unparalleled toll of the COVID-19 pandemic. According to early estimates, New York State is set to receive $15.1 billion in federal relief, including in human services, education, homeland security, housing, transit, independent agencies, and more. 

We’ll dig deeper into the full range of relief for human services in the coming days, but below are some of the key provisions – some of which will temporarily make whole those whose jobs were sacrificed to protect the public’s health. However, there are serious concerns with respect to housing, cash assistance, nutrition, and state relief. Moreover, many programs will be arbitrarily cut off instead of automatically being tied to economic indicators that signal a recovery is truly underway.
Unemployment Insurance (UI)
There’s a lot to like in the UI provisions, including: $1 billion in emergency grants to states and 100 percent federal funding for extended benefits in states with an unemployment rate above 10 percent; a significant expansion of eligibility to include part-time workers, independent contractors, the self-employed, and so-called gig economy workers such as drivers for taxis, Uber, and Lyft; an additional $600 per week increase in UI benefits for up to 4 months; an additional 13 weeks of UI (beyond the number of weeks each state provides); and full funding for states with existing work-sharing programs, such as New York.
Cash Payments
Eligible adults will receive a one-time payment of $1,200 and eligible minors under the age of 17 will receive an additional $500. Amounts will be phased down above a threshold of $75,000 for individuals, $112,500 for head of households, and $150,000 for joint filers.
It is deeply unfortunate that Congress excluded millions of immigrants and their families across the country, many of whom pay taxes and are on the front lines caring for the ill and putting food on our tables. By excluding workers who pay federal income taxes with an Individual Taxpayer Identification Number (ITIN) from receiving stimulus payments, Congress has left out more than 5 million children – most of whom are U.S. citizens.

Additionally, vulnerable populations – such as those who receive the bulk of their income from untaxed sources such as Social Security, veterans benefits, or disability benefits, and those whose incomes are so low they don’t have to file a return – will have to file a tax return. The Treasury can and should use its discretion to prioritize getting checks out as quickly as possible and ensure Volunteer Income Tax Assistance (VITA) programs are sufficiently funded to reach those who do need to file a return.
Finally, these payments do not take into account geographical differences in the cost-of-living. In New York City, for example, the full $1,200 for a qualifying individual doesn't even cover one month of median rent.
State Fiscal Relief
New York State will receive $7.543 billion through the Coronavirus Relief Fund. The Fund – available until December 21 – helps states mitigate massive budget shortfalls due to widespread joblessness, plummeting tax revenue, and an increase in human needs.
However, New York’s share is just five percent of the $150 billion available for all states, even as New York is reporting nearly half of all confirmed COVID-19 cases in the U.S. Already, New York State is forecasting $10 to $15 billion less than previously expected in tax revenue as a result of COVID-19 measures, and Citizens Budget Commission predicts up to a $20 billion shortfall in New York City revenue over the next three fiscal years. In other words, state fiscal relief is likely to be significantly insufficient. (It’s worth noting that Senator Schumer requested a much larger sum of $750 billion and has said he’s working on another relief package.)
Congress approved $15.5 billion to support increased participation in the Supplemental Nutrition Assistance Program (SNAP), $450 million for food banks through The Emergency Food Assistance Program (TEFAP), and provided temporary flexibility for states to expand SNAP. However, Congress missed the opportunity to modestly increase maximum SNAP allotment by 15 percent and minimum SNAP benefit from $18 to $30 per week.
Food pantries are being devastated as joblessness among low-paid and vulnerable workers is skyrocketing (as many as 750,000 may have lost their jobs in March alone).
Increasing benefits for the SNAP program would ease pressure on food banks. Furthermore, every $1 in SNAP spending resulted in $1.74 of economic activity during the depths of the Great Recession.
The CARES Act provides $4 billion for Emergency Solutions Grants to help people escape from or avoid homelessness and $3 billion for public housing operating funds and rental assistance, boosts energy assistance programs, and places a 120-day moratorium on all evictions from federally-assisted housing.
However, housing funding still falls short of existing unmet needs, let alone anticipated increases in costs from the COVID-19 crisis. Congress should follow the House’s lead by meaningfully boosting investments in rental assistance, operating support, and homelessness prevention, and by including mechanisms that take into account the impossibility of catching up on suspended rent payments that will accrue during this crisis.

As COVID-19 spreads, with peak infection possibly weeks away, we face the possibility of a long-lasting and deep downturn. It is therefore urgent that Congress address legislative gaps, such as a few we’ve summarized above, in addition to a growing list of needs in child care, education, front line worker safetytesting, treatment, and prevention, income supports, and more.

Derek Thomas is Senior Fiscal Policy Analyst and Gaurav Gupta-Casele is Fiscal Policy Analyst at FPWA. On Twitter @dlthomasNYC & @FPWA.

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