A fair amount of my writing for this site consists of updates on the development of major federal legislation affecting the budget, health care, and human services. My two posts earlier this week on President Trump’s weekend executive actions served that purpose. Implicit in those posts was the belief that the lawlessness of the Administration’s solitary, poor, nasty, brutish, and short unemployment program matters. This post explains why that is so.
To review, the “lost
wages assistance (LWA)” program that the President announced on Saturday is
supposed to be a substitute for new coronavirus relief legislation that will lift
the political pressure Republicans were feeling to negotiate with
Democrats. If it works as claimed –
which it surely will not – it would deliver $44 billion in aid to the
unemployed. As such, it would provide just
over one percent of the $3.4
trillion offered by the House-passed HEROES
Act. It does nothing about the
continuing shortages and delays in coronavirus testing,
it provides no food
or housing
assistance, and it actually worsens the $555
billion state fiscal crisis that threatens deep cuts in health and
education spending at the time when those are most needed. With most of the effects of the prior relief
bills largely dissipated, this solitary $44 billion – which could and should be
spent instead on housing
assistance, state fiscal relief,
or improving testing
– is grossly insufficient to prevent a rapid escalation of hardship, including many
families losing their homes. (Contrary
to what the Administration has suggested,
the executive
order on evictions and foreclosures provides no actual protection to anyone;
if the Administration was prepared to do anything substantial, surely it would
have included that action in the President’s announcement.)
The benefit the President
originally announced
was $400 per week, already a one-third reduction from the $600 per week
unemployed workers were receiving under the Federal Pandemic Unemployment
Compensation (FPUC) program that expired in late July. Because states’ fiscal crises prevented them
from coming up with the statutorily mandated
25% match, the Administration subsequently reduced the benefit further to $300
per week, half of what workers had received previously. Low- and moderate-income families that had
calibrated their household expenses to what they were earning cannot absorb
cuts of this magnitude without considerable hardship.
On-going chaos in the Administration’s
efforts to settle on ground rules for the program and the difficulties many
states will have reprogramming their computers to the Administration’s
specifications will delay the provision of this modest benefit still further,
likely until the end of August or some time in September. Because the Administration only set aside
enough money for five or six weeks of aid, many families may receive only a
single retroactive check.
Yet although the
program will be extremely short, it may be just long enough to dissipate the
political pressure on the Administration and congressional Republicans to agree
to new coronavirus relief legislation.
If it does, that will have huge implications.
This $44 billion is
grossly insufficient to prevent a collapse
of consumer spending
that could tip this severe recession into a full-blown depression.
Without
substantial fiscal relief, states will have to make massive cuts in basic
services. To get a sense of how large states’
gross $555 billion three-year budget shortfall is, that is slightly more than the
amount of state money states were estimated
to spend on education at all levels – primary, secondary, and higher education –
in 2019. With escalating and
unpredictable costs as schools try to resume instruction, these cuts impact
would be devastating. Obviously states will
not take the full amount of their cuts from aid to education, but the shortfall
is so great that they cannot shield any major components from deep cuts. And history tells us programs eliminated
during recessions often are not revived when the crisis passes.
The future of out
democracy is very much at stake. One of
the major sticking points in negotiations over new coronavirus relief
legislation reportedly was the House’s provision of more money to the Postal
Service to offset its steep decline in revenues and ensure it has the capacity
to administer mail voting. The President
largely
admitted
that he is blocking this funding to prevent mail-in voting. It likely is no coincidence that his
negotiators walked out on negotiations with Congress the same day the Trump mega-donor
recently installed
as postmaster general removed
twenty-three senior Postal Service administrators from their positions amid substantial
reductions
in services.
To be clear, this
program is unlawful. It is purportedly
established under a section
of the statute allowing kinds of aid “other” than those listed in the Stafford
Act when disaster unemployment assistance is a listed
benefit (but with conditions that do not serve the President’s purposes). Also, the Administration is paying the full
cost of the benefit with federal funds in defiance of the Stafford Act’s
unwaivable requirement
that states pay one-quarter of the cost.
(Allowing states to double-count their regular unemployment benefits as
their match when they are already counting those benefits to meet requirements
of unemployment
law
is expressly prohibited by longstanding fiscal integrity rules.)
And the program is
unworkable, to the point that many if not most states likely will not participate
either because they cannot complete the necessary extensive reprogramming of
their computers in time or because they are afraid that the Government
Accountability Office or Inspector General will note the illegality of the plan
and cause the states to be billed for the cost of the FEMA money they received. (Executive officials cannot make binding
commitments of federal funds not approved by Congress.)
The biggest
problem with this program, however, is its deceitfulness. If enough of the public is deceived into
thinking that this is viable and substantial to the point that they accept
Republican obstruction of new relief legislation, tens of millions of desperate
people will face severe hardship, our economy will decline even further, and
our democracy may not recover.
@DavidASuper1