Kilmer, Beyer: To Get Through the Pandemic, We’re Gonna Need a Bigger Boat via Roll Call
Automatic stabilizers can help provide some certainty during uncertain times
Posted May 12, 2020 at 7:32pm
Most of us remember that terrifying scene from “Jaws. “
Brody, played by Roy Scheider, leans over the boat and sees the shark that’s terrorizing the local summer resort town for the first time, and is blown away by its size. In shock, he staggers back to the boat’s cabin and reports to the skipper, “You’re gonna need a bigger boat.”
As we’ve seen the massive disruptions to the lives of workers, families and health care providers caused by the COVID-19 pandemic, it’s hard not to think of that scene.
The staggering impact of the coronavirus on our communities increases by the day — and that’s been the trend over the last six weeks. Beginning in early March, Congress took action, crafting and passing three bipartisan coronavirus response bills: the first was $8.3 billion, the second $104 billion, and the third, the CARES Act, $2.2 trillion.
And yet, the federal government is still struggling to keep up with the needs of communities in our regions and across the country. The Paycheck Protection Program to help small businesses weather the storm originally received $349 billion. That was exhausted in just 13 days. Congress then allocated another $310 billion. But that funding, too, could run out in days.
The same could be said of the funding for state and local governments. Even with the $150 billion provided in the CARES Act to help those on the front lines of this pandemic fund education, health care and transportation, the Center on Budget and Policy Priorities estimates that the combined revenue shortfall could surpass $650 billion.
In other words, despite significant (and bipartisan) federal intervention, it’s becoming increasingly clear that we’re “gonna need a bigger boat.”
To rise to this challenge, there has to be a shift toward being proactive — delivering help where it’s needed, when it’s needed.
A key to doing that could be the use of automatic stabilizers that would trigger additional assistance as negative conditions persist or possibly worsen. Steps like these could provide greater responsiveness to needs on the ground and provide some certainty and predictability for people and communities. Otherwise, vital programs intended to get help to families and small businesses rocked by this pandemic could run out too early. That’s why we, and our colleagues in the New Democrat Coalition, pushed to include automatic stabilizers in the latest coronavirus relief package unveiled Tuesday. While that did not happen, we will continue to advocate their inclusion in any future measures.
Automatic stabilizers are not a new idea. In fact, state unemployment rate thresholds are already used to automatically trigger “on” extended benefits periods, or additional weeks of unemployment compensation, which are financed jointly by the federal government and states. What’s more, benefits are frequently extended in recessionary periods
Automatic stabilizers are about building some predictability into a wildly unpredictable time. If you’re a small-business owner trying to decide whether or not to forge ahead or fold the tent, knowing that additional help will be made available could be a difference-maker. If you’re a family trying to budget for next month’s bills but don’t know what the future of this pandemic holds, you would feel a lot more comfortable if you knew there were programs in place to automatically kick in should you end up needing them.
One specific legislative proposal that incorporates this concept is the Worker Relief and Security Act. We have just introduced the legislative framework of this bill, which would tie the expanded unemployment benefits in the CARES Act — currently set to expire at the arbitrary date of July 31 — to the public health emergency as well as to national and state unemployment levels. As long as there is a pandemic or an economic crisis, American workers would get this expanded assistance, which could in turn help prevent this recession from becoming a depression.
Jason Furman, a top economic adviser to President Barack Obama, recently said, “It is essential that future COVID legislation include triggers that extend whatever assistance is needed as long as is necessary.” He supports the Worker Relief and Security Act as a good way forward to put the idea into practice.
For what it’s worth, automatic triggers could be valuable in determining when to turn off federal interventions as well. While economists of all stripes agree that investments are required now to defeat this virus, prevent a full-scale depression and recover from this recession, they also agree that, at some point, America will need to work to get a handle on its long-term fiscal challenges. Identifying those parameters at the front end could ensure a more predictable, more strategic path forward while ensuring we don’t arbitrarily end benefits too soon. Predicating the “trigger-off” for assistance on the reality of the health crisis and its economic fallout is critical for a robust and lasting economic recovery.
Folks feeling the effects of this crisis shouldn’t have to wait for Congress to pass another bill when no one truly knows how long this pandemic will last. Programs that automatically adjust to the need are the best way we can get ahead of the curve and position ourselves to weather this storm.
Otherwise, before you know it, we are — once again — gonna need a bigger boat.
Derek Kilmer is a Democrat representing Washington’s 6th District. He serves as chairman of the New Democrat Coalition. Donald S. Beyer Jr. is a Democrat representing Virginia’s 8th District. He is a member of the New Democrat Coalition and serves as vice chairman of the Joint Economic Committee.
Originally published at https://www.rollcall.com.