Poverty

Contrary to suggestions by Treasury Secretary Steven Mnuchin and others, borrowing isn’t a viable substitute for the substantial direct federal aid that states need to offset their sharp revenue declines and cost increases due to the deep, pandemic-driven, recession, our

This week at CBPP, we focused on health, state budgets and taxes, federal taxes, the economy, and family income support.

As federal policymakers consider another package to address the deep economic downturn, one of the most effective steps would be to provide substantial federal grants to help states address their huge revenue shortfalls, as the House-passed Heroes Act would do. That would help states and localities avoid cuts in services and investments that would worsen racial inequities — as my colleague Nick Johnson recently wrote.

Unless federal policymakers provide enough aid to states, localities, territories, and tribal governments to offset all or nearly all of their massive revenue losses due to the pandemic, the longstanding inequities from historic and ongoing racism and discrimination — which have left Black and brown communities most harmed by COVID-19 and the economic crisis — will only worsen from the deep cuts in public services that these governments might have to make.

Federal policymakers should substantially increase the federal share of Medicaid costs to help prevent states from cutting payments to health care providers, which would likely hurt Medicaid patients and could threaten the sustainability of the health care workforce during the public health and economic crises.

This triggered increase in federal Medicaid assistance would go a long way toward closing the large recession-related gaps emerging in state budgets and reduce the need for harmful program cuts and tax increases.

Policymakers gave the IRS additional funds in the CARES Act of March, acknowledging that the agency is playing a critical role in responding to today’s economic crisis by delivering more than 150 million CARES Act stimulus payments.

Some policymakers are considering whether to make certain business tax credits temporarily refundable — that is, available to firms that don’t have enough taxable income to otherwise qualify — saying that would give cash to struggling small businesses to help them weather the recession.

Borrowing is not a viable substitute for the substantial direct aid states need to offset their sharp revenue declines and cost increases stemming from COVID-19.

The House is expected to vote today on a bill that would lead 4 million people to gain health coverage, the Congressional Budget Office estimates, while making coverage more affordable for at least 13 million more, likely benefiting well over 17 million people in total. The Patient Protection and Affordable Care Enhancement Act would strengthen both the Affordable Care Act (ACA) marketplaces and Medicaid.

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

As COVID-19’s health and economic impacts intensify, creating huge state budget shortfalls, states and local governments are laying off workers and slashing support for schools and other services, harming working families — especially in communities of color — and delaying the economy’s recovery. These cuts will be just the tip of the iceberg if the federal government doesn’t provide more fiscal aid for states and localities.

Some wrongly argue that federal policymakers should “wait and see” before giving states more fiscal aid to help address their huge, recession-driven revenue shortfalls, in part because they haven’t spent all the aid they’ve received so far. States, however, have good reasons not to spend all of that aid just yet. And, in any case, they’ll need far more to address their extraordinary shortfalls and avoid further layoffs and other cuts that would hamper an economic recovery.

The Supreme Court will likely decide the case in the spring of 2021, when the unemployment rate is expected to still be about 10 percent and possibly amid a continuing COVID-19 public health crisis.

Voters in Oklahoma and Missouri will decide on June 30 and August 4, respectively, whether their states will adopt the Affordable Care Act’s (ACA) Medicaid expansion, which would improve access to health care for hundreds of thousands of low-income Oklahomans and Missourians — including tens of thousands of American Indian and Alaska Native (AI/AN) people in these states.

The next COVID-19 relief bill should fix an unintended benefit “notch” under which, due to the pandemic and resulting recession, Social Security benefits will be significantly lower for workers who turn 60 this year and will be eligible for early retirement benefits in 2022. Those becoming eligible for disability or young survivors benefits in 2022 will also see lower benefits.

Here’s why:

In the midst of a global pandemic and major recession, the Trump Administration and 18 state attorneys general are expected to file briefs this week asking the Supreme Court to strike down the entire Affordable Care Act (ACA).

Millions of low-income families are at risk of missing out on stimulus payments because they do not file taxes or receive certain federal benefits. Medicaid application assisters, providers, and state and local agencies can conduct outreach to ensure they get the payments.

We are releasing ICYMI a day early this week, as the Center will be closed Friday to recognize the Juneteenth holiday and give Center staff a day to mourn, celebrate, and participate in collective action.

Many of our analyses this week continue to highlight racial disparities amid COVID-19 and ways to address them — issues we’ll continue to monitor.