How Congress can help Louisiana’s recovery

Congress reconvenes this week at a critical moment for our country. Record numbers of Americans are unemployed, and are facing the imminent loss of federal benefits that have helped them make ends meet. State and local governments are facing massive budget shortfalls that threaten their ability to educate children and keep communities safe. Federal action that is proportional to the task at hand is urgently needed. 

The next round of federal aid should adhere to these three principles: 

• It should be robust and comprehensive enough to adequately address the unprecedented crisis we are facing;
• It should target assistance to state governments and people who have been hit hardest, including people with low incomes, immigrants, and people of color; and
• It must last as long as needed and not end prematurely.

It is vital that the next round of federal aid meet the needs of the people of Louisiana who are struggling as the state charts a course to and through recovery. Congress should include these nine things in the next federal aid package: 

Ensure federal relief lasts until the job market recovers.
Without congressional action, many federal relief measures for workers and families will expire as soon as the end of July – far before the health and economic crises of Covid-19 will be over. If federal aid to states and families ends too soon, as it did in the Great Recession, it will only delay our economic recovery and make the current crisis more painful. In order to ensure federal aid responds adequately to the needs on the ground, the next round of legislation should:

• Tie key assistance measures to the state unemployment level, rather than to arbitrary deadlines or public health criteria, to avoid ending aid too early – especially in hard-hit states like Louisiana. 

Provide significant federal aid to state and local governments.
Covid-19 triggered a severe state budget crisis, with demand for state services on the rise while the sales and income tax revenue that pay for state services fell because stores are closed and people have less income. The Louisiana state budget faced a revenue shortfall of $293 million in the budget year that ended June 30, and a $970 million shortfall in the current budget year, representing declines of 3% and 10%, respectively. 

Cities in Louisiana face serious revenue shortfalls, too. New Orleans alone projects a budget shortfall of $170 million. The National League of Cities estimates that cities will lose $360 billion in revenue through fiscal year 2022. Studies on the Great Recession found that austerity policies, which force states to deal with severe budget constraints, dampen long-term economic growth, prolong high levels of unemployment, and extend recessions. To avoid causing needless and severe economic pain, the next aid package should: 

• Allocate sufficient resources in direct grants to states, local governments tribes, and territories;
• Increase the federal Medicaid matching payment (FMAP) from the 6.2% provided in the Families First to at least 14% for the duration of the 2021 state budget year; and
• Provide enough funding to the Education State Stabilization Fund to support both public schools and public colleges and universities as they respond to the crisis.

Increase SNAP benefits to help families keep food on the table.
Increasing benefits in the Supplemental Nutrition Assistance Program (SNAP) is one of the most effective policy tools for helping people keep food on the table and for boosting the economy in a downturn, since people spend their SNAP dollars quickly to buy food, and those dollars support local merchants. The need for food assistance has soared, especially among families of color, since the beginning of the pandemic. A temporary increase in the maximum SNAP benefit was one of the last items left out of previous federal Covid-19 relief packages, and should be included in the next round of aid. Congress must act to:

• Raise the maximum SNAP benefit by 15% for the duration of the economic downturn;
• Raise the minimum monthly SNAP benefit from $16 to $30; and 
• Suspend and halt the implementation of rules, such as work requirements, that would take away SNAP benefits from those in need.

Extend and expand unemployment insurance benefits.
Louisianans are facing catastrophic job losses, which are hitting Black and brown families the hardest. As of early July, approximately 760,000 Lousianans, representing 36.1% of the state’s February pre-pandemic labor force, had filed initial Unemployment Insurance (UI) claims since early March. At $220 per week, Louisiana’s average UI benefit is the lowest in the nation. The weekly $600 federal boost to the unemployment benefit is the only thing standing between many families of unemployed workers and devastating economic consequences. 

The $600 per week benefit boost expires on July 31, and the expansions of eligibility criteria and extensions of additional weeks of benefits will expire on Dec. 31 this year. The next relief package needs to shore up the unemployment system, as the CARES Act did, in three ways: 

• Preserve expanded eligibility through the Pandemic Unemployment Assistance program; 
• Continue to provide extra weekly benefits through the Pandemic Unemployment Compensation (PUC) program; and 
• Make additional weeks of coverage available beyond what is in the CARES Act to ensure that benefits do not run out while unemployment remains high.

Create an emergency assistance fund to help people left out of previous rounds of federal aid.
Nearly 1 in 3 households report experiencing economic hardship during the past 30 days – such as not being able to pay the rent, phone or utility bills not having enough food for everyone in the family to eat, or forgoing medical care. Many people – including those who were unemployed and looking for work prior to the pandemic now facing longer periods of joblessness, those ineligible for unemployment insurance, families facing a crisis including domestic violence survivors, those returning from jail or prison, and grandparents raising their grandchildren, among others – have been left out of previous rounds of aid. An emergency grant fund, like Sen. Ron Wyden’s Pandemic TANF Assistance Act, would create a targeted, flexible and simple way to get assistance to people who are most in need. Congress should act to: 

• Create a flexible emergency assistance fund – modeled on the TANF Emergency Fund during the Great Recession – for states to provide basic income assistance and emergency aid to families and individuals who face severe hardship due to today’s deep recession. 

Expand the Child Tax Credit and Earned Income Tax Credit.
A growing body of research says that expanding the Child Tax Credit (CTC) is probably the most important step policymakers can take to address child poverty. Yet, many of the poorest families don’t qualify for the credit because their income is too low. Additionally, expanding the Earned Income Tax Credit (EITC) to include very low-paid workers without children would reach a group that has access to much less aid from other assistance programs than families with children. Making these changes for the 2020 tax year would put extra money back in the pockets of working people early next year, including the families of an estimated 500,000 Louisiana children through the CTC and helping nearly 280,000 poor working adults through the expanded EITC. The next round of federal aid should: 

• Temporarily expand (for tax year 2020) the Child Tax Credit of $2,000 per child so that it is fully available to the 27 million children in low-income families who currently receive a partial tax credit or no credit at all because their incomes are too low.
• Expand the Earned Income Tax Credit for workers without children at home so that the federal tax code no longer taxes 5.8 million low-paid working people into, or deeper into, poverty.

Preserve protections for Medicaid health coverage
Preserving health coverage is a crucial part of responding to the Covid-19 public health crisis. People at all income levels need comprehensive health coverage that lets them access the care they need without worrying about whether they can afford it. To protect health care coverage, the next round of federal aid should: 

• Preserve the critical Medicaid “maintenance of effort” requirement in the Families First Act, which prevents states that accept additional Medicaid funds from imposing new eligibility restrictions.

Increase housing assistance.
Without additional aid, housing insecurity will spike as people see their incomes fall and they are unable to pay rent or cover their mortgage. Many could face eviction and homelessness, exposing them to extraordinary hardship and exacerbating existing health risks. While Gov. John Bel Edwards recently announced a new rental assistance program, much more aid is needed. In order to provide help low-income Louisianans afford safe, stable housing during the pandemic and economic downturn, Congress should: 

• Invest $26 billion in Emergency Housing Vouchers in order to reach approximately 500,000 extremely low-income individuals and families who are homeless, at risk of homelessness, or fleeing domestic violence; and 
• Provide $11.5 billion in Emergency Shelter Grant program funding for homelessness-related services to supplement the $4 billion that the CARES Act provided.

Improve economic stimulus payments.
Economic stimulus payments are a way to get cash quickly to families and workers who are likely to be harmed financially by the pandemic. Families with immediate unmet needs will likely spend stimulus funds quickly, thereby helping to sustain the economy. This applies just as much to immigrants and their families as to others. Currently, immigrants who pay taxes but don’t have a Social Security number are excluded from stimulus payments, while the immigrant workers left out of the rebates are concentrated in many of the most essential jobs. Parsing immigration status during an acute pandemic and economic crisis not only denies help to many of the families, children, and communities hit hardest by the pandemic, but is also unwise from an economic standpoint. The next coronavirus relief bill should:

• Retroactively fill the two main holes in the first round of stimulus payments by authorizing payments to immigrant households where an adult does not have a Social Security number and to dependents over age 16; and
• If a second round of stimulus payments is approved, it should also include these improvements.

Congress must act to get people the aid they desperately need to get through this recession. Louisiana and its residents can’t afford to wait.