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Stymied Stimulus: The Far-Reaching Consequences of a Stalled COVID Relief Package

While the possibility of a second wave of federal stimulus checks has (rightfully) received a lot of coverage, the next COVID relief package was supposed to accomplish a lot more than that — arguably, some of the highest-impact measures have received the least attention, including proposed reforms in health care, criminal justice, public finance, and higher education.

There’s probably no greater example of the divorce between the needs of the American people and the priorities of the lawmakers who govern them than Congress’ inability to pass a new COVID-19 relief package. While Americans suffering record unemployment, food insecurity, and an eviction crisis await a second wave of aid, Congress and the Trump administration have prioritized politics, allowing infighting and rhetoric to skewer emerging compromises.

It’s been a rollercoaster experience since July, watching the House, Senate, and Trump administration come close to an agreement, only to have those efforts fall apart (sometimes, at the drop of a tweet). And all this despite how clear the American people have been that they need more assistance. The Democrat-controlled House and Republican-controlled Senate have clashed over how much money to spend on relief (Democrats favor substantially more; Republicans less), whom to provide aid to (Democrats are focused on individual Americans and state and local governments; Republicans want to target businesses), and the specific measures lawmakers and advocates have suggested for inclusion.

The back-and-forth helps explain why Sen. Mitch McConnell’s recent announcement that he plans to bring a Republican-backed COVID-19 aid bill to a procedural vote next week has been met with little fanfare: Few are hopeful about Congress’ ability to push anything through without a major effort at compromise between both parties.

And it’s more than a second stimulus check that’s on the line. The next COVID relief package could include a number of high-stakes relief measures that haven’t received nearly as much airtime, despite their urgent, even life-or-death consequences for American families. Here’s a look at the critical but lesser-known measures that are currently in limbo.

Protections Against Surprise Medical Billing

Patients and lawmakers have long advocated for ending surprise medical billing — a predatory practice where patients receive unexpected, often expensive bills from out-of-network providers — as part of a COVID-19 relief package. However, despite bipartisan demand for a legislative fix throughout 2019 and 2020, Congress has so far failed to take action.

In a poll late last year, nearly 94 percent of U.S. voters surveyed said that Congress should take action to protect patients from surprise medical bills. Since then, the pandemic and the economic fallout have only heightened the need for a solution. With more than 2 million people sickened by COVID-19 in the United States, and families facing financial hardship, the risks of receiving a financially damaging surprise bill carry even greater stakes than before.

Comprehensive surprise billing protections were loosely considered — and discarded — in the previous COVID-19 relief package, reportedly amid heavy lobbying by special interest groups that have a vested interest in maintaining the status quo. Additionally, the Trump administration took steps to prohibit surprise bills linked to COVID-19 care, but the protections were limited. As a result, patients still remain at risk.

The good news is that a bipartisan, bicameral agreement to end surprise medical billing — and limit health care costs — already exists. Congress only needs to include the legislation in the next relief package to protect Americans from potential financial disaster.

Life-Saving Criminal Justice Reforms

The HEROES Act, which already passed out of the House, includes several critical provisions that will help ensure the nation’s criminal justice systems have the resources to prevent the spread of coronavirus within corrections facilities, keeping the people held and working within jails, prisons, and detention facilities — and their families and communities — safe.

Since the start of the pandemic, corrections facilities have become reservoirs of the disease, which is then spread to the local community through the constant churn of employees, contractors, defendants, and many others who routinely step foot behind the stone walls and wire fences of jails and prisons. More than 143,243 incarcerated people have contracted the disease and more than 1,200 have died from it. Similarly, more than 30,000 corrections officers have contracted the disease and more than 80 have died from it. This is a dire health threat in red states and blue states, big city jails and rural prison towns — and it deserves immediate action.

Here are the top priority criminal justice measures a new COVID relief package could — and should — include:

  • COVID-19 Correctional Facility Emergency Response Act and the Emergency Community Supervision Act: These provisions will deliver federal support to local and state criminal justice systems that implement best practices to prevent the spread of the virus, including reducing prison and jail intake and preventing overcrowding. The Department of Justice will administer a grant program to facilitate the immediate release of low risk and vulnerable people. It will also expand testing and treatment and reduce incarceration for mere violations of probation or parole.
  • COVID-19 Safer Detention Act: This provision will expand eligibility for compassionate release and home detention to the elderly and sick. Prisons are already unhealthy places for the most vulnerable, and the threat of COVID-19 only compounds the risks people face behind bars. Meanwhile, the elderly, sick, and pregnant women pose the lowest threat to public safety and yet are among the most expensive to incarcerate. Freeing them early or allowing them to serve time at home will help prevent the spread of the virus and save public resources.
  • Paycheck Protection Program Second Chance Act: Hundreds of thousands of hardworking Americans were prohibited from accessing PPP loans due to prior involvement with the justice system. This provision, backed by a bipartisan coalition, will eliminate the barriers instituted by the Small Business Administration and allow justice-involved owners of small businesses to access these loans.

These criminal justice reforms are backed by a bipartisan coalition and poll well across the political spectrum. Two-thirds of Americans believe that people should be moved out of prisons and jails to help fight the COVID-19 virus. Sixty-nine percent want elderly and high-risk people moved into home confinement. And 60 percent think that Congress should not prohibit people from accessing PPP loans purely on the basis of their involvement with the justice system.

The American people want these reforms passed. The House has already approved them. The White House says it wants a “big deal.” Now the Senate has an opportunity to make real progress.

Rescuing Colleges and Keeping Them Accountable to Students

Without action by the federal government, public colleges in most states will face severe funding cuts, likely larger than those incurred during the recession of 2008-2009. And these cuts will have far-reaching implications. There has already been a large contraction in the industry’s work force: Institutions in Pennsylvania, for example, plan to lay off approximately 350 faculty members on an expedited timeline.

The problem is particularly acute for community colleges. In the spring, many governors used CARES Act funding to close their higher education budget shortfalls. Without further funding, substantial cuts may ensue, exacerbating existing resource inequities between community colleges. This comes at a time when colleges are facing increased costs due to the pandemic, such as supporting online infrastructure and purchasing  personal protective equipment and sanitation supplies. The impact of less state revenue and added expenses incurred by the pandemic may force colleges to cut important student services. The effects will be worse for poorer students, who need more support and are more likely to live in districts that have made the deepest cuts.

This is especially concerning given the fact that during times of economic recession, many more people are eager to reskill or return for more education. Predatory schools will look for these opportunities to heavily market their services to people in already vulnerable positions.

In the previous relief bill, education grants were given to schools across all sectors, including for-profit schools, with the requirement that half of funds go to support immediate assistance to students for housing, health care, and technology — and the rest could be spent at the discretion of the institution. This loose rule invites misuse.

Beyond passing the next round of relief, Congress needs to ensure financial support for higher education comes with strong accountability measures. We need to make sure relief money goes to institutions that will provide a solid return on students’ investments, and that students and taxpayers are protected from unscrupulous schools.

A Life Raft for Local and State Governments

State and local governments power much of the U.S. economy: One out of seven workers is employed by state and local governments — including public safety and public health providers on the front lines of the crisis. In their monthly state revenue report, the Urban Institute shows that state tax revenues declined 7.5 percent since March. It predicts revenue declines will continue as the pandemic continues to impact economic activity and jobs across the country. In other words, we may be looking at the beginning of a sustained downturn, rather than staring at the bottom. Given this, federal funding to state and local governments is critical to provide support for communities as they grapple with the dual effects of the economic downturn and the pandemic.

The Labor Department reported that employers added a little over 600,000 jobs in September, making it the third straight month of slowing job growth. Schools have been particularly hard hit. A federal relief bill with support for education would ease school districts’ budget constraints and could bring some of those jobs back. But, absent that assistance, and if state and local revenue fall further, school districts would face more budgetary cuts during a time when their costs to provide educational services are greater.

Help for Women — Especially Moms

The pandemic has had an outsized economic impact on women. Before March, women outnumbered men in the workforce, a trend that was expected to continue. Today, women are taking the brunt of job losses. Betsey Stevenson, a Labor Economist at the University of Michigan, associates this with two trends. The first is that industries that predominately employ women have been hardest hit by the pandemic. Second is the childcare crisis, which will likely have significant long-term effects, depending on the policy choices our country makes. Federal unemployment benefits could help ameliorate both of these issues by better supporting those in the “hardest hit” industries and by considering additional family leave and childcare policies.

Security for Older Americans

The tremendous uncertainty of this moment creates a unique situation for near-retirement adults as they weigh long-term decisions in a time of crisis. Experts point to the long-term losses from pulling money, stopping work, or taking Social Security that can lead to worse outcomes down the road. Federal assistance would likely stabilize markets and reduce uncertainty for older Americans.

With so much on the line for students, people involved in the justice system, the millions of unemployed, hard-hit mothers, those who are struggling to afford a surprise medical bill, and older Americans hoping to retire, here’s hoping lawmakers will listen to the needs of their constituents and demonstrate real leadership by passing a second COVID-19 relief bill that includes these measures.