An Open Letter to Congress
12/17/20
Dear
I want to urge your strong support for passage of an economic stimulus package this week. It is urgently needed here in California.
Unemployment Insurance (UI): 4.8 million Californians are receiving UI benefits over the last month, of whom 1.4 million are receiving coverage due to the CARES Act. https://edd.ca.gov/newsroom.htm Our average weekly UI benefits are $345. https://www.ppic.org/blog/unemployment-benefits-in-the-covid-19-pandemic/ Our unemployment rate due to the pandemic has finally fallen below 10% (9.3% last month); before the recession we were at 3.9%. https://ycharts.com/indicators/california_unemployment_rate The recent UCLA Anderson School forecast predicts, our state’s economy will start to robustly recover during the next spring when the vaccine is widely available and distributed. https://www.anderson.ucla.edu/centers/ucla-anderson-forecast/december-2020-economic-outlook
· Coverage for gig workers and the self-employed expires this month; it urgently needs to be renewed. They have little or no recourse until the economy returns to full health.
· $300 supplemental weekly benefits on top of existing UI benefits. Average UI benefits are not sufficient to pay California’s sky-high rents, our food costs, utility costs and other essentials. Our unemployed workers desperately need the added federal supplement to stay in their homes and feed their families.
· An additional 16 weeks of coverage is desperately needed. The Covid 19 recession began last March; while some jobs have come back, many service sector jobs, particularly those involving face-to-face contacts cannot be restored until next spring. https://www.anderson.ucla.edu/centers/ucla-anderson-forecast/december-2020-economic-outlook
It is imperative that California upgrade its systems at the Economic Development Department so that it stops sending fraudulent checks to prisoners and starts sending checks to those actually eligible in a timely fashion. https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2020/12/02/unemployment-payments-weeks-late-in-nearly-every-state and https://www.kcra.com/article/its-frustrating-californians-waiting-unemployment-benefits-stunned-by-edd-inmate-fraud-scam/34791009# and https://abc7news.com/ca-edd-coronavirus-covid-file-a-claim-certify-for-benefits/6271545/
Small business PPP grants of $300 billion. Small businesses employ about half of California’s workforce and have accounted for 2/3rds of our job growth. https://www.gov.ca.gov/2020/11/30/governor-newsom-announces-immediate-assistance-for-businesses-impacted-by-covid-19-including-temporary-tax-relief-and-500-million-in-grants/ Those in the hospitality and leisure industries are being badly hurt by the COVID 19 as are small retailers. https://www.anderson.ucla.edu/centers/ucla-anderson-forecast/december-2020-economic-outlook They need targeted grants to help them get through until spring.
We do not need or want to see a repeat of last spring’s gold rush to the large corporations that did not need or merit them. https://www.washingtonpost.com/business/2020/12/01/ppp-sba-data/
Health Care Over 300,000 of our fellow citizens are already dead from the pandemic. Our California health systems are overwhelmed by the crush of new, desperately ill patients with Covid 19. https://www.latimes.com/california/story/2020-12-16/icu-hitting-capacity-hospitals-desperate-measures Our essential workers are endangered by the lack of sufficient supplies of PPE. https://www.latimes.com/california/story/2020-08-12/coronavirus-unemployment-ppe-study-california It will be a challenge to distribute the new vaccines both due to their scarcity and the difficulty with storage and distribution in rural regions with insufficient super cold storage. https://calmatters.org/health/coronavirus/2020/11/covid-vaccines-coming-soon-california/ Hospital revenues are down (loss of elective services paid by private insurance) while their expenses (to care for severely ill COVID patients) are up. https://www.chcf.org/wp-content/uploads/2020/06/FinancialImpactCOVID19CAHospitals.pdf
· $35 billion for hard hit providers. The initial CARES Act funding was distributed based on a provider’s Medicare caseload. This was a poor substitute for helping those facilities and providers actually overwhelmed with COVID patients.
· $6 billion for vaccines (development and distribution). We have two highly effective vaccines approved or nearly approved; two more may be approved by the end of January. But we have insufficient supply and an as-yet-untested and unproven distribution system. We need more funds to increase the supplies of the approved vaccines and more funds to help distribute them to all Americans who so desperately need them.
· $7 billion for testing and tracing. For nearly a year, we have had insufficient testing, tracing and quarantine, abetted by a national communications strategy that downplayed mask wearing and social distancing; thus the disease has spread like wildfire. We need to fund testing and tracing adequately until the spread of the COVID disease is under control.
Student loan repayment obligations: $1.6 trillion is owed in student debt. This is tough to repay in the middle of the severe COVID recession. Debt is unevenly distributed with the greatest burdens falling on a small number of borrowers in medical schools, business and law schools. https://www.marketwatch.com/story/cancel-student-debt-this-chart-breaks-down-who-owes-what-11608064316 A pause is necessary until the economy gets going at full steam again. Student debt forgiveness, if any, should be carefully structured so that it does not further exacerbate income and wealth inequality.
· Repayment should be paused until the end of April.
Schools: Students are not getting the educations they need and are falling further and further behind. Distance learning has been ineffective; schools have been closed to the special education and low-income students who most need in person learning. Students are dropping out or giving up because the quality of remote learning is so poor and their access to their classes through the Internet is so poor. State and local budgets that primarily support public education have been decimated by the Covid 19 recession. https://www.americanprogress.org/issues/education-k-12/reports/2020/07/21/487865/k-12-education-needs-federal-stimulus-funding/ Education has been the source of many of the layoffs plaguing Californians. https://www.anderson.ucla.edu/centers/ucla-anderson-forecast/december-2020-economic-outlook The lack of adequate supports for childcare combined with the closing of schools is costing women their jobs and their families the desperately needed income.
· $82 billion for schools. They must reopen very soon with safety protocols in place; our children, particularly those in low and moderate income families have lost a year of vital education.
· $10 billion for child care https://www.aei.org/poverty-studies/childcare-funding-as-stimulus/ and https://www.bizjournals.com/washington/news/2020/12/04/child-care-merits-greater-investment.html
· $6.25 billion for broad band and $3 billion for connective devices to make distance learning work.
Rent and mortgages $25 billion
Ten million Americans or more face eviction or foreclosure because they are behind on their rent or their mortgage; the moratorium ends December 31. https://www.kake.com/story/43049615/99-million-americans-not-uptodate-on-their-rent-or-mortgage-payments The need for rental assistance may be as high as $100 billion and the numbers of Americans impacted could run up to 40 million. https://www.vox.com/21569601/eviction-moratorium-cdc-covid-19-congress-rental-assistance-rent-crisis Over 30% of California renters may be impacted. https://news.bloomberglaw.com/banking-law/millions-of-americans-expect-to-lose-their-homes-as-covid-rages The proposal from the Gang of 8 extends eviction protections through January 31
Nutrition -- $26 billion
One in six Americans are going hungry due to the recession. https://www.cnn.com/2020/12/07/perspectives/snap-benefits-stimulus-food-banks/index.html Food banks are stretched to their breaking points. https://www.bbc.com/news/world-us-canada-55307722 Food stamps need to be increased in value and more funds have to be made available for food banks. https://www.cnbc.com/2020/12/11/millions-of-kids-are-going-hungry-and-it-could-get-worse-this-winter.html The Gang of eight proposals include:
· 15% bump for food stamps
· More funding for food banks and food pantries.
Airlines and transportation -- $45 billion
Needless to say, people are not getting on planes, buses, subways and trains during the pandemic, so they are not getting revenues to sustain their services. Therefore we have an entire mass transportation infrastructure that is not being used to anywhere near its pre-pandemic levels. We need to sustain both the skilled workforce and the complex infrastructure so that when we get back to our normal lives, we can use their vital transit services. https://www.masstransitmag.com/management/article/21164761/bipartisan-908-billion-emergency-relief-framework-includes-funding-for-transportation and https://www.flightglobal.com/strategy/us-lawmakers-reportedly-earmark-17b-for-airlines-in-new-coronavirus-stimulus-package/141396.article The Gang of eight proposal includes:
· Funding for airline workers -- $17 billion
· Funding for airports, mass transit and rail -- $15 billion for mass transit, $1 billion for Amtrak and $8 billion for buses
State and local aid -- $16o billion
State and local governments provide our vital local services, like police, fire, education, social services and roads; they cannot run budget deficits like the US government can. States and local governments experienced revenue losses to varying degrees depending on the structure of their tax systems and the economic impacts of the Covid recession on the industries in their states. The proposal from the Gang of eight would distribute these funds based on a combination of population and revenue losses. https://taxfoundation.org/bipartisan-state-and-local-support-and-small-business-protection-act-of-2020/ According to the Brookings Institute analysis, these anticipated revenue losses are not just one-time losses, but linger over the next several years. https://www.brookings.edu/blog/up-front/2020/09/24/how-much-is-covid-19-hurting-state-and-local-revenues/ The recent report by the California Legislative Analyst concludes that the state of California will have a $26 billion windfall in the coming fiscal year followed by several years of red ink. https://lao.ca.gov/Publications/Report/4297
Stimulus checks -- $300 billion The economic revival is slowing; retail sales are slowing; there is widespread agreement among economists that a second round of stimulus checks to low, moderate and middle income individuals are urgently needed to sustain the economic recovery until the vaccinations take hold in the spring. https://www.cnbc.com/2020/11/23/economists-want-second-1200-stimulus-checks-where-the-relief-stands.html At its December 2020 meeting, the Federal Reserve emphasized that what struggling Americans most need right now is cash to get through the next four months. https://www.npr.org/2020/12/16/947261107/fed-issues-economic-assessment-and-forecast-for-2021 Our economy’s K shaped recovery to date means that cash infusions are most urgently needed right now for low and moderate income individuals and families. https://www.businessinsider.com/k-shaped-recovery-recession-worse-for-bottom-better-for-top-2020-11
I hope you will support and pass the economic stimulus package this week that includes all of these necessary supports for the American economy, the health of all Americans and the millions of Americans struggling to keep food on the table, a roof over their heads and education for their children’s future.
Sincerely,
Lucien Wulsin
Founder and Retired Executive Director of Insure the Uninsured Project