Benefits

Now ten years old, the Affordable Care Act (ACA) has made health insurance and health care more available and affordable for tens of millions of people — and it’s bolstered the country’s ability to deal with both the public health crisis and the recession that’s likely to result.

Stimulus payments need to reach as many low-, moderate-, and middle-income households as possible to soften the COVID-19 pandemic’s financial blow to individuals and shore up the economy. That means that lawmakers must not only make low- and moderate-income people eligible for the full payments; they must also ensure that the government delivers the payments without imposing new requirements on individuals to file tax returns or fill out and submit other complex paperwork.

For more information, see Report: Some States Much Better Prepared Than Others for Recession.

This week at CBPP, we focused on the economy, the federal budget, federal taxes, state budgets and taxes, food assistance, and health.

Amid the frenzy in Washington to enact broad stimulus legislation, Senate Republicans are also proposing to address a tax issue that far predates the current economic emergency: an error in the 2017 tax law that affects the restaurant and retail industries. If policymakers plan to help retailers and restaurant owners by fixing the error — and including the fix in the emerging stimulus legislation — they also should take the opportunity to provide much-needed help for the millions of low-wage workers who wait the tables and sell the products in those establishments.

Let’s back up.

The Senate Republican proposal for a third bill to address the COVID-19 pandemic and economic crisis is woefully inadequate to meet the extraordinary challenges now facing the nation. Its centerpiece — direct cash payments to households — would miss the lowest-income households entirely and give millions of low- and moderate-income households much less than those who are better off.

The Families First Coronavirus Response Act provides broad flexibility for USDA and states to adapt SNAP to address people’s food needs during the current public health emergency.

States don’t have much control over the depth of an economic downturn, but they do have control over state policies to prepare for and respond to recessions.

States facing increased demands on their Medicaid programs due to COVID-19 should prioritize enrolling people in Medicaid and making sure they can stay enrolled. The new Families First Coronavirus Response Act requires states to take some steps in this direction, but they can and should do more.

Given the magnitude of the crisis, now is not the time for policymakers to worry about raising deficits and debt as they consider what steps to take.

An aggressive policy response is essential to mitigate the sharp drop in economic activity and increase in unemployment that are already underway.

The Families First Coronavirus Response Act — which the House passed, and the President is expected to sign — will give states broad, temporary flexibility and authority to supplement and modify SNAP (food stamps) and other nutrition programs during the current public health emergency.

Governors can use the flexibility that the pending Families First Coronavirus Response Act would give them to ensure that WIC benefits remain accessible even if COVID-19 concerns keep WIC clinics closed or parents away. The bill, already passed by the House, is expected to be enacted this week.

Congress should move quickly to take further bold steps to achieve the dual and related aims of lessening the threat of a major recession and cushioning the financial blow for millions of Americans.

This week at CBPP, we focused on the economy, the federal budget, state budgets and taxes, federal taxes, health, and food assistance.

The House COVID-19 bill’s temporary Medicaid funding boost, if in effect for all of calendar year 2020, would deliver roughly $45 billion in immediate, needed relief to states, which will face growing costs due to the virus and a likely economic downturn.

The already overburdened IRS “may face challenges ensuring compliance” with certain parts of the 2017 tax law, a Government Accountability Office (GAO) report finds, particularly the 20 percent deduction for certain “pass-through” business income. That’s one more reason why policymakers should boost funding for IRS enforcement and operations to offset nearly a decade of significant budget and staffing cuts.

The threat of a COVID-19 pandemic demands not only an aggressive public health response to contain and treat the virus’s health impacts, but also an aggressive fiscal policy response to try to avert a major recession, which is now a distinct possibility.

The Trump Administration’s budget plan for fiscal year 2021 mirrors its budgets of the last two years in the massive cuts it proposes for core public services that help struggling households afford the basics and access health care.

Governors and lawmakers in numerous states have proposed creating or expanding state Earned Income Tax Credits (EITCs) this year. By approving these proposals, states can build on the federal EITC’s well-documented, long-term benefits for children while improving racial and gender equity and thus the nation’s economic prospects.