COVID-19 reveals the need for sweeping U.S. welfare reform to help low-income and struggling individuals.
Millions of Americans have fallen into poverty since last May. Nearly 30 million face food insecurity. Over 10 million individuals in the United States are unemployed. Faced with this extreme suffering, the U.S. Congress finally passed and President Donald J. Trump signed a $900 billion relief package that extends unemployment benefits, authorizes another round of relief checks, and provides food support, rental assistance, and small business loans to U.S. households.
Yet before the ink dried on the relief legislation in late December, critics on both sides of the aisle decried the inadequacy of the $600 Economic Impact Payments that the federal government will send out to most U.S. households. Why send $600 when you could send $2,000?
This question misses the mark, badly. Boosting near-universal relief checks to $2,000 would do little to respond to the needs of those individuals who have been hit hardest by the pandemic and economic downturn. The bulk of the payments would go to households spared the most dire consequences of the pandemic-induced economic collapse. Meanwhile, many people who are truly suffering need more support for a longer period. Rather than focusing on checks for most Americans, Congress should expand and strengthen the nation’s inadequate safety net programs.
The pandemic has had drastically unequal effects—with low-income people and people of color disproportionately affected in terms of both health and employment. They are both more likely to become ill and die from COVID-19 and more likely to lose their jobs.
For those individuals most affected by the pandemic, the relief legislation comes up short. It provides reduced weekly unemployment benefits compared to the first round of relief legislation, down from $600 to $300. Moreover, these unemployment benefits expire in just three months, by which time it is unlikely that the United States’ epidemiological and economic crises will be over.
The relief legislation also ignores state and local governments, which employ millions of people and support essential services such as hospitals, public health departments, and schools. It fails to extend health insurance coverage to millions of uninsured Americans at a time when many are struggling with costly medical bills.
Furthermore, the relief that the package does provide will not reach everyone who needs it. This is in part because existing U.S. transfer programs feature gaps that leave out vulnerable groups. It is also due to administrative complexities and technological problems that thwart eligible beneficiaries seeking relief. Mixed-status families, certain workers who were unemployed pre-pandemic, and individuals with limited access to the internet have been consistently disadvantaged by, or excluded from, COVID-19 relief packages.
At the same time, the recent legislation provides support to many who do not need it. Other types of support include expanded tax deductions for business meals—the so-called “three martini lunch” deduction—and business deductions for expenses purchased by tax-free Paycheck Protection Program loans.
The recent relief package did, however, include two more important targeted policies for poor Americans. It extended the national eviction moratorium through January 2021 and included a $25 billion assistance fund. It also strengthened food assistance in the same manner that it did at the start of the Great Recession—an action that Congress should have taken at the beginning of the pandemic. Congress increased the Supplemental Nutrition Assistance Program (SNAP) for all food stamp beneficiaries by 15 percent. The earlier COVID-related changes to SNAP excluded the poorest Americans who were already receiving maximum benefits.
Unfortunately, achieving even these few positive steps took months, as Congress waited to act while millions of Americans suffered and slipped into poverty. For many of these people, the latest relief aid will come too late. Thirteen percent of all adults in the country reported they did not have enough to eat last month, compared to 3.4 percent of adults throughout 2019. In addition, one in five adult renters is already behind on rent.
But it is not too late to pick up the pieces.
The new Congress can move beyond politically popular—but poorly targeted—checks and instead do the hard work of making the U.S. safety net more equitable and responsive. In a recent essay published in the Minnesota Law Review, we lay out how Congress can do so. Specifically, Congress should work toward enacting universal health insurance coverage, legislating a child allowance that meaningfully supports all families in need, and streamlining existing safety net programs including Medicaid, SNAP, and unemployment insurance to provide faster relief in difficult times.
These three policies we propose would also make meaningful—albeit not sufficient—progress to root out the ways in which legal institutions discriminate against people of color. Those changes will only come from sustained popular mobilization and pressure on policymakers.
All this is not to say the most recent relief legislation is not welcome. Although the delays caused unneeded suffering across the United States, the aid is better late than never. But it represents an inadequate response to the poverty and inequalities exacerbated and generated by today’s crisis, and it is a missed opportunity to shore up our safety net for future crises. The next Congress should work with President-Elect Joe Biden to build a safety net that protects all individuals when illness and unemployment strike.