Coronavirus Stimulus Bill: Who Will Be Left Behind?
The massive $2 trillion stimulus bill will provide relief for many Americans during the financial crisis created by the COVID-19 pandemic. But many vulnerable people will be ineligible for much-needed financial aid.
The Rev. Jim Wallis and Robert Greenstein, president of the Center on Budget and Policy Priorities, dissect the particulars of the bill, explaining how you can access the protections contained in the legislation. They also highlight the failures of the aid package that ignore the needs of the people on the margins of society whom Jesus calls us to feed, clothe, and shelter.
Greenstein calls us to apply the "golden rule" in the fight ahead, so that we can expand coverage to our brothers and sisters who need it most in the next round.
Full transcript below:
Jim Wallis:
Hello, this is Jim Wallis, and you're listening to a special edition of The Soul of the Nation, a podcast about how faith should shape our politics, and not the other way around. Today, I'm speaking with my dear friend, Bob Greenstein, about the economic implications of COVID-19. Bob Greenstein is an author, a domestic policy expert, and the founder and president of the Center on Budget and Policy Priorities. The center has been fundamental in informing faith leaders and so many of us nationwide. Bob Greenstein has been, for the faith community, our “numbers rabbi,” on all things that deal with poor and low-income people. He always knows what's happening, what's at stake, and how to protect those whom we call the least of these. So, thanks for joining us today Bob. Appreciate it very much.
Bob Greenstein:
My pleasure to be with you, Jim.
Wallis:
So, Bob, how has your spirit? Let’s start with where we’re heading in these days. How's your own spirit?
Greenstein:
Personally, my spirit is good. I am concerned for what lies ahead. I think on both the pandemic and the recession that we're entering; things are going to get substantially worse before they get better. And that just makes it all the more important that we protect people of limited means, people who are vulnerable, people who are sick, in the very tough months. I think it's months, not weeks, that lie ahead.
Wallis:
Indeed. So, in this crisis, in the months that lie ahead, the most vulnerable, as you know better than perhaps anyone, the people who are hungry, immigrants, people in poverty, people with disabilities, the elderly, are all in great danger. So how can we support economic protection and resilience among all those vulnerable people?
Greenstein:
I think the legislation that the House passed on Friday [March] 27 has important provisions in it that take important steps in the right direction. But it also has some really troubling gaps. So, we have to come back and do more. It has some very important provisions in the areas of unemployment insurance, and thankfully, it does not leave low income people out of eligibility for the stimulus checks. But as we can go into, a lot of work needs to be done to implement these provisions effectively. There is real risk that millions of very poor families will be left out of the stimulus checks, even though they're eligible for them, because they won't make it through the application process. There also are things we haven't yet done that we need to do. This bill, for example, does not provide free treatment for the coronavirus for people who are uninsured.
We have to provide treatment for everybody, especially people who are uninsured. It helps, but I don't think it does enough for people who, because they don't have income, could be evicted or end up on the streets, or are already on the streets or crowded into homeless shelters. Those are not the places to be in a pandemic that spreads this easily. The package does not include an increase in SNAP or food stamp benefits, and that's something we didn't do in the great recession in 2009 and 2010, but it isn't yet done here. So, there are important first steps to help protect low income and vulnerable people, but they're insufficient and incomplete. We need our policy makers to do more. And finally, Jim, I'd note that the bill has $150 billion that will go out to the States to help them meet these huge budget holes that are developing in the states.
Unlike the federal government, states are required to balance their budgets every year, and their revenues are plummeting. They're plummeting. A third of state revenues come from sales tax revenues. People are buying much less, for obvious reasons. So, on the one hand, the $150 billion will cover only a portion of the state budget holes. And we'll see many states now start to think about, what do we cut to balance our budget? We all have to make sure they don't cut key support for low-income and vulnerable people. And secondly, governors will be making decisions of, how do I use my share of the $150 billion Washington is sending me? What do I do with that? We have work to try to prioritize the needs of low-income people, vulnerable people, [and] sick people. So, a lot of work lies ahead.
Wallis:
I like the way, the clarity, of how you're expressing the gaps. So, when people see these numbers, these large numbers, and because the bill was bipartisan, they think, well, this is going to hopefully fix all this here. Talking about gaps, which I’d like you to unpack a bit like the first one, how and when will this be implemented, and how, in the way it's done, what's the danger or jeopardy of low-income people even in getting what is in this bill?
Greenstein:
So, I think one of the most striking parts of the bill, is its expansions of unemployment insurance on two fronts: number one, making eligible for unemployment insurance many people who now don't have a wage income, but who wouldn't qualify for unemployment insurance under the normal rules. Maybe they can't work now because they have got to stay at home and care for a sick elder or others who are vulnerable to the virus, or there could be other reasons. And through July, the bill also provides a substantial increase, funded by the federal government, in the level of the weekly unemployment benefits. Those things should take effect quite quickly. The one concern there, is that there are so many people, millions of people, newly applying for unemployment benefits. We have to make sure the state unemployment insurance systems can handle the load and get the benefits out promptly. But we're off to a good start there. Now, turning to the stimulus checks, [it’s] unclear how long it'll take the Treasury [Department] and the Internal Revenue Service to get them out. I want to briefly divide people into three categories: So, people who are below the income limits for the check, which are well up into the middle-income range, people who are eligible and who filed a tax return in either 2018 or 2019 will get the checks automatically. I'm not sure whether they'll start going out in a month or it'll take two months, but I think they'll start going out pretty quickly. Category number two: people who receive Social Security, are elderly or disabled, and are not required to and don't file a tax return. The law leaves it up to the Treasury Department whether those people, there are millions of them, need to newly file a tax return in order to get the stimulus checks, or whether they'll get the stimulus checks automatically. One of the main things we're working on today at the Center on Budget, is trying, frankly, to get some constructive pressure on the Treasury Department, because it can absolutely do it, to rule that those people will get the checks automatically and don't have to file a tax return. And while there is no final decision yet, as far as I'm aware, all the early signs point to the likelihood that the Treasury will agree to provide the checks automatically to people on Social Security without filing a tax return. That might take a little longer to go out then the checks were the people who have filed a tax return. But then there's a third group of people. The third group of people include a lot of low-income people who haven't filed a tax return and don't get Social Security. They could be poor mothers and children on SNAP, and maybe temporary assistance for needy families, or they could be others. And those people will need to file an application of some sort in order to get the stimulus payments, and they're probably going to need to file a tax return to get them. Now there will be an incentive for them to do it. If you are a mother and two children, you're eligible for a $2,200 check. If you're a two-parent family with two children, you're eligible for a $3,400 check. But there will be a need for a lot of community resources to reach those people to let them know they need to file and help them if they have difficulties in the filing process. This at a time when those people can't walk into a social service office, or a volunteer tax assistance, or H&R block clinic, because most of those are shut down for social distancing. So, we all have a lot to do to help the most vulnerable people in our communities, who, on the positive side, they're eligible for these checks, they're eligible with one caveat that I'll come back to in a second, but if they haven't filed a tax return and don't get Social Security, they're probably going to have to newly file a tax return to get the check. Now there's one group of four: families who were left out. I think this is very unfortunate. The new law, or well it has passed the House and the Senate, as soon as President Trump signs it it'll become the new law, it does say that you are ineligible for these checks unless the filer, if it's a married couple filing jointly, both spouses and the kids have Social Security numbers. What that means, is that there are some millions of immigrant families, where in most cases, the children were born in the United States and are U.S. citizens, but one or both parents does not have a Social Security Number — they're flatly ineligible for the stimulus payments. Very unfortunate. Under the 2017 Republican tax law, they at least made [them] eligible for the child tax credit – children who are U.S. citizens and have Social Security numbers, even if their parents don't. And we and others made an effort in the final stages of this bill to try to persuade policymakers to at least make those children eligible for the $500 per child part of the stimulus payment, but we were unsuccessful. It was something that a number of policy makers, primarily on the Republican side, resisted. I'm hoping that this can be revisited in the next bill. I think the health crisis and the economic recession we're heading into; I hope I'm wrong, but I think they're going to be of sufficient severity and duration that Congress will have to do at least one more substantial bill.
Wallis:
I want to go to that next bill in a moment, but what you said here is extremely important. It's in the weeds. It's detailed, but the issue is eligibility.
Greenstein:
Let me say on eligibility. We know the answer right now, and eligibility, everyone with income below $75,000 for a single filer and $150,000 for joint filers, is eligible for the full stimulus payment, so long as they have a Social Security number.
Wallis:
Got it.
Greenstein:
Above $75,000 and $150,000, it phases out gradually. It's not as though if you're at $76,000 then you get nothing, but the amounts begin to phase down. So, what this means is [that] every low-income person in the country who has a Social Security number should be eligible, but the question is, how do you actually get it? Everyone who filed a tax return for 2018 or 2019 is good, they don't have to do anything else. Our focus needs to be on lower-income people who didn't file a tax return for 2018 or 2019. I am hoping that, within only a few days, that the Treasury Department will publicly announce that everybody on Social Security will get it automatically and doesn't need to do anything else. But we don't know that yet. We're hoping that they also announce that people who receive Veterans benefits or Supplemental Security Income and don't get Social Security also will get it automatically, but they haven't ruled on that yet. We don't know the outcome. We do know that everybody who neither has filed a tax return nor gets one of those federal benefits people who may get SNAP or Temporary Assistance for Needy Families – yes, those are federally-funded programs, but it is the states who administer them, not the federal government – people that get those programs and did not file a tax return and are not on Social Security, they are going to have to file some sort of application [from] the Treasury. Hopefully, in short order, we'll make clear exactly what it is they need to do. And as soon as Treasury clarifies this, we will put out information on it.
Wallis:
Great. So, information … you've made the eligibility issue clear and how to get it, and then what the outstanding decisions are that have to be made, so right now, before anybody forgets, tell us the best way to contact the Center. What's the email address? How can people get this information, especially as it changes over time?
Greenstein:
Well we're going to have all this information on our website, so it's just I think www.centeronbudget.org or just put “Center on Budget and Policy Priorities” into your . . . what is it called? Your browser? you know, whatever…
Wallis:
Google it.
Greenstein:
… Google it and it'll come up and click on it and you'll get our website, and we'll have the information on our website. And if people need more information, they can email me or one of my colleagues at the center.
Wallis:
Let me just say, this is going to be the most important and reliable place to get information on eligibility, how to get it, and the outstanding issue still at stake for low-income people. So, go there, go there. Now, next time we need something more … explain why you and we in the faith community felt like an increase in SNAP was so important, and we didn't get what we wanted there, so why is SNAP so important in a time like this, and how can we focus on that for this next bill?
Greenstein:
Okay. So, let me make three points. First, SNAP . . . basically the way SNAP works is low-income people are given a debit card and their monthly benefits are loaded onto the card. They're usable only for food purchases, but each time they go to the store, the cost of the groceries they're buying is just taken from the debit card for as long as the benefit lasts. So, it's a very efficient way to get food assistance to people who are very low-income. And I would also note it's really helpful not just for food purposes, but for things like paying the rent or being able to buy a pair of shoes for your kids, because in the absence of SNAP benefits, poor families would have to spend a substantial share of their income to put food on the table each day, often leaving too little income left to meet other needs. The fact that they can get SNAP benefits also not only enables them to put food on the table, it enables them to have more money left to meet other basic needs. And boy, never ever, that I can recall, has it been more important than now if you're a poor family to be able to pay the rent. Amidst a pandemic, the last thing you want to do is be on the street, or be doubled up with somebody, or be in a crowded shelter. We have to make sure people have the resources to pay the rent. Okay, so that's one reason SNAP is so important.
Now, an issue with SNAP, is the benefits are modest. They average about $1.40 cents per person per meal. Too many people run low on food assistance benefits in the final week or 10 days of the month, even in good times. It's our view, that of me and my colleagues at the Center on Budget, that the SNAP benefit level should be higher. but we have a really important precedent here, in 2009, during what we call the Great Recession, President Obama proposed, and Congress agreed and enacted, to provide a temporary increase in the SNAP benefit level. It was an increase of about 15-20% in the amount of benefits that people received. And the subsequent research showed that it had a big effect in reducing the rise in poverty during the Great Recession, in greatly limiting the rise in food insecurity during the Great Recession, and, very importantly, the research found that it was one of the most effective ways to keep the recession from becoming deeper. When we go into recessions, people get laid off, and they spend less because they purchase fewer things. Businesses sell fewer things, so businesses lay more people off, those people spend less, and the cycle continues. How do you break or moderate the cycle? You have to keep purchasing up so businesses can sell their goods and services and don't have to lay people off. Now, if we were to give a big tax cut to very wealthy people, they would not spend that much of it. They largely save it because they're already wealthy. They don't live paycheck to paycheck. When you increase the SNAP benefit, by contrast, the research shows low-income families spend virtually 100% of the increase in the benefit, which means the money gets into the economy quickly, it keeps up consumer purchases and it leads to businesses laying fewer people off than they otherwise would. So. it's just a winning policy in a recession all the way around.
Now, the bad news is that we and others really wanted to get this into the bill that's just finished today. I know Speaker Pelosi and Senate Minority Leader Chuck Schumer pushed hard for it. I'm sad to say the White House resisted and it did not make it into the bill. We really need to get it in the next bill. However, there is one piece of good news, about 10 days ago, Congress passed, and the president signed an earlier bill, I think it's called the “Families First Coronavirus,” and that bill provided flexibility to states and to the U.S. Department of Agriculture. It provided flexibility to states to seek to increase the SNAP benefits of people who were getting less than the maximum benefit, particularly if they had children who would normally get pre-school meals, but who aren't getting them because their schools are closed. And I'm happy to report, Jim, I just learned this three hours ago, that we now have 10 states that have applied for and received waivers from the Department of Agriculture so that, starting within a matter of days, they'll be able to increase food stamp benefits for a significant share of the people on the caseload.
Now, ironically, they will not be able to increase benefits for the poorest families, because the poorest families get the maximum benefit amount, and the Agriculture Department ruled that it doesn't have legal authority under the Family's First Act to increase the maximum benefit amount, which, of course, is one more reason that we need to get that increase in the maximum benefit in the next stimulus bill. But, for right now, we now want to encourage every one of the other 40 states to immediately seek the same kinds of waivers, which will now enable them within a matter of weeks to start increasing the SNAP benefits of a substantial share of the SNAP caseload. Since 10 states have already secured approval for these, we know that if a state asks, the Agriculture Department will grant this authority, so we now need the other 40 states to ask for this.
Wallis:
So, feeding the hungry helps to stimulate the economy. That's the win-win, this powerful combination. Feeding the hungry, which is in fact core to all of our religious traditions, also will help stimulate and restart the economy. That's a wonderful thing for people to keep in mind.
Greenstein:
Yeah. Jim, you and I have at times talked about Jesus and Moses, and I think that both Jesus and Moses would approve, don’t you?
Wallis:
Maybe not the Senate and Congress, but Jesus and Moses. So, in the name of Jesus and Moses, when do we have a chance to go back at the Congress and Senate with this kind of a sensible and moral proposal?
Greenstein:
Great question. Congress is scheduled to come back to Washington April 20th. Now, of course, we don't know for sure that they'll be able to, I think it will depend in part on the virus. But I think that even if the spread of the virus prevents them from coming back physically, I'm assuming they will find ways to work remotely, because the country just can't afford at this time to have Congress not working beyond April 20th. Having said that, I can tell you that I know for a fact that some members of Congress and some leaders of Congress are already beginning to think about the next bill. I know that we at the Center on Budget, we are already getting inquiries from some congressional offices; please advise us on what are the priorities for the next bill. And part of that is that, given the crisis we're in and the need after April 20th to move quickly, and just the way the legislative process works, no one should think that there won't be any work on this till April 20th and then they'll start from scratch. Key leaders in both parties, probably the White House, whatever… people in the weeks ahead will be putting together their priority lists for the next legislation. So, all of us who want to make sure that various things are done in the next bill, that there is an increase, as long as the economy is in recession, in the maximum SNAP benefit. Can we get some broadening regarding the stimulus payments so at least citizen children in immigrant families receive them, if not broader? Those kinds of issues, we believe, we all need to start advocating for them right away starting next week. Not waiting until April 20th, because we don't want people to say to us on April 20th, “Gee, we didn't hear from you in time. We already have a full list that uses off as much as we think will be available in the resources.” We want to get on those lists early and we want to be high on the list of priorities. And I think in addition to the individual requests on SNAP, on children in immigrant families and the like, we clearly want to lift up a broader message. I think the religious community is key to this. A broader message that the needs of the poorest, the least among us, the most vulnerable, either financially or physically and the sick, that their needs have to come first. They have to have the top priority. And we can note that when you meet those people's needs, you're also, by doing that, doing some of the best and soundest economic stimulus you can do. So, it is a twofer.
Wallis:
Well Rabbi, that's the sermon. And that gets us back here to Jesus and Moses. So, on Twitter, you shared this, “Saving lives and saving the economy are not in conflict right now. We will hasten the return to robust economic activity by taking steps to stem the spread of the virus and save lives.” Can you explain how caring for human lives and saving the economy are not mutually exclusive?
Greenstein:
If we reopen the economy, if we undo social distancing too soon, I just think it'll be a disaster. Many more people will get the virus, and many more people will die, and having more people get the virus and more people die is itself adverse economically. But beyond that, if we reopen too soon and the virus takes off, it will then force us to close the economy down again. We will be closing it down again from a much less favorable position, [and] we will probably then have to do it for longer. It's just the worst case scenario for both health and the economy. The single most important thing for the economy right now is to flatten the curve and stem the growth of the virus as soon as we can, and as greatly as we can. We will never be able to get the economy back to operating as it should until we have addressed the spread of the virus first.
Wallis:
It often seems rare in this country among politicians and even economists to say that morally sound and economically sound policies really work and belong together and you're saying they should, and they can.
Greenstein:
And in this circumstance, they particularly do. When one is in a recession, one wants to keep purchasing power up to keep consumer purchases from falling through the floor, because when that happens, it leads to more businesses going under, more layoffs, and a deeper recession. We know that in a recession, if you simply gave money to a business because it was in trouble, because people weren't buying its products, giving more money to the business, maybe it would keep it from going bankrupt, but it doesn't help the business sell any more products. It doesn't lead necessarily to the business stopping layoffs, because businesses generally don't employ people they don't need. And if few people are buying the firm's products, then the firm doesn't need the same number of employees. Similarly, if in a recession you put a lot of money in the pockets of affluent people who already have more income and more wealth, then the amount they spend week to week, then by and large, giving them more money may put more money into their bank account, but again, it doesn't lead to much in the way of more consumer purchases that are needed to keep firms from laying off more staff. By contrast, when you put money into the pockets of low-income people who live paycheck to paycheck, who struggle to meet their bills even in good times, and really encounter difficulty in bad times, then all of those dollars get spent. They go into the economy, they go into purchases, and that helps keep businesses afloat and keeps them from doing more layoffs. So particularly in a recession, we see that what people like you and I, Jim, think of as a moral imperative taking care of the least among us in the people who really meet hard times, and can spiral into crisis when the economy goes downhill. Helping them helps the economy. It's a real marriage of helping the most vulnerable and helping shore up the economy for everybody at the same time.
Wallis:
So, this coronavirus, this COVID-19, has revealed the inequities in our health care system, and really in all of our systems. That's become more apparent, things that we have maybe for too long accepted on both sides of the aisle. So how could this crisis help us to see that more, and maybe lead us or open us to change that? How can we move forward now by what has been revealed by this crisis that we often have just either ignored or accepted and not paid attention to? Could this help us go forward in a better and different way in those changing of those systems? And how?
Greenstein:
It can. You know, a little anecdote in the last recession in 2008, final year of President Bush's presidency, the economy was heading into recession and Congress voted stimulus payments smaller than the ones in the new bill. In the stimulus payments they voted in 2008, however, people with the lowest incomes were in eligible. If we fast forward to a week ago, Senator McConnell, the Republican Majority Leader in the Senate rolled out in the initial draft of a bill and under Senator McConnell's bill, on the positive side, there were stimulus payments. On the not positive side, people with very low incomes were entirely shut out and many of the working poor and people with modestly low-incomes, would only get half of the amount that people up at a middle, upper-middle income levels would receive. I thought it was noteworthy that among the first senators speaking out and saying everyone should be eligible for the same amount – low income people shouldn't be shut out or get less – among the first people speaking out were several of the most conservative Republican members of the Senate, and I think that is something to build on. I wish, but I'm not counting on, sad to say, the President playing a moral leadership role on behalf of low-income people on that front, but I think we all should be talking to members of Congress of both parties because particularly, given what I would view as a lack of both substantive and moral leadership in the White House amidst the current crisis, it makes it all the more important to have moral leadership from members of both parties on Capitol Hill.
Wallis:
Hmm… and maybe finally, in light of that, or building on that, I don't know anyone who helps me figure out more what to say to members of Congress and senators about how they should in fact defend and protect the least of these, and you do that all the time. What do you have to say now, not just to senators or members of Congress, but the rest of the country, individuals, citizens, consumers—what's the moral leadership that we all need to show in a time like this, in our own lives, our own behavior, our own communities, our own institutions? How can all of us take that kind of moral leadership that you call upon our legislators to do all the time? How can we all do that?
Greenstein:
Well, it's a big question. You know, Jim, just a few minutes ago on this podcast, we were talking about how particularly at a time like the present, that government policies to protect the poor and the most vulnerable not only can help those people, but they help all of us because they're among the most effective policies to keep the economy from falling further. And I think the same thing is true with respect to these larger moral dimensions. You know, we often think of, and we all encounter, situations in our personal lives where maybe something that we know is morally right, might not be the most advantageous for us in terms of whether it's our own financial bottom line or might be just something else. But here we are in a situation where if there's one thing one can say about the coronavirus, it's very democratic. You don't escape it because you're a member of one racial or ethnic group rather than another, because you have a lot of money in the bank or a big stock portfolio. Nobody is immune. It can affect everybody. None of us have immunity from this brand-new virus. And one of the things that means, is it's in everybody's own personal selfish interest to make sure that all of our fellow Americans, really, all of our fellow residents of planet earth, are protected to the greatest degree possible. This started out with, as I gather, one case in China, and now the whole world is facing this with rising numbers of deaths. I can't remember any time in my lifetime when I thought of something where we were all so much in this together, where the bonds of humanity are so important. There almost isn't a distinction or a clear line between what we need for others in the most vulnerable, and what we need for ourselves in our own families. We are all in this together. And that's true not only on the virus front, but the worst the recession is, the more everybody gets hit in one way or another, whether you lose your job, or your 401k goes downhill because of the plummeting in the stock market. We really are all in this together. We all have to pull together. So, it takes some of us sometimes longer to see that than others. And that's one of the reasons why I'm particularly glad at the present time that we have moral leaders of many faiths and denominations beginning to speak up and get involved, and why I'm so grateful, Jim, to work with you and your colleagues and grateful for the moral leadership you provide.
Wallis:
Well, this is where loving your neighbor as yourself makes a world of sense.
Greenstein:
Well we could say, Jim, fight the coronavirus by honoring the golden rule.
Wallis:
There's a sermon here at the end. Thank you, my brother. When we get ready to advocate around that second bill, that next bill, which you're saying we just started doing right now, we will turn again to you to help us to understand how and why and all of our constituency will hear your advice as they've heard it today. So, thank you so much for your work and for this time together.
Bob Greenstein:
And thanks to you, and to Sojourners and to all other religious groups and leaders who are jumping in to help our country at this time.
Wallis:
Be well, my friend.
Greenstein:
You too.
Wallis:
This is Jim Wallis with the Soul of the Nation. God bless you.