Just two weeks ago, the Trump administration signed into law the largest stimulus bill in U.S. history. The package, dubbed the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, is set to inject a desperately needed $2 trillion into the economy to curb the effects of the pandemic. Media outlets have praised the CARES Act for being a rare form of bipartisan legislation set to save our economy from financial collapse.
This type of irresponsible praise is expected; at first glance, the CARES Act looks like exactly what America needs. Among its nearly 250 pages, it provides around $300 billion in direct cash checks to American households, $350 billion in loans to small businesses, and $500 billion in relief to larger corporations. It’s set to dramatically expand unemployment insurance, providing for independent contractors and the self-employed to receive temporary Pandemic Unemployment Assistance; increase unemployment checks by $600; expand work-sharing programs that encourage businesses to reduce hours rather than lay off workers; and increase the federal share of states’ unemployment payments.
Yet once you start to chip away at this thin veneer of sympathy, it becomes clear just how much the CARES Act neglects working and middle class Americans already pushed to the brink. At its best, it’s an attempt to pass emergency legislation through a polarized Congress. At its worst, it’s a corporate bail-out. But at its core, the CARES Act continues an American tradition of handing citizens scraps to distract us from demanding concrete change to our economic and political reality.
For example: probably the most widely-known provision of the CARES Act will send adults making $75,000/year or less one-time checks of $1,200 each. Guardians in qualifying households will also receive an additional $500 payment for each dependent under 17. These benefits are based on either your 2018 or 2019 tax filing–meaning you must have filed taxes in either year to receive them. Those receiving social security benefits without filing taxes will be paid according to information provided by the Social Security Administration. Undocumented immigrants and dependents over the age of 17 (i.e college students, the elderly, and disabled adult dependents) are ineligible for both the $500 and $1,200 checks.
Additionally, while homeless Americans are eligible to receive funds, Street Sense media reports that they’re the most likely to fall through the cracks, as they may not have filed taxes or received social security and it’s unlikely that states will put in efforts to identify them.
For Education Management & Staffing Solution employee and parent Darlene Clendenen, this is unacceptable. “From a parental point of view, I am also frustrated a bit. I pay for school, clothes, feed, pay insurance, [and more] for my 20-year-old and neither her nor I get stimulus money,” Clendenen stated. “I would just like the same compensation for the 20-year-old I support that I get for the 14-year-old. Since she still lives at home and doesn’t have any bills, that is fine. For the kids that support themselves or rely heavily on FAFSA and other funding, they should get the full adult amount. Most of them have jobs that have probably been deemed unnecessary. Or they are working at jobs that we previously thought as menial which are now necessary.”
There are dozens of other issues with the CARES Act: just 9% of funding is dedicated to public services like hospitals, veterans’ healthcare, food banks, and programs like SNAP, despite expert warnings that hospitals will need much more than $150 billion to cover the costs of providing care. State and local governments, struggling to maintain balanced budgets in an unprecedented era of social distancing, are receiving just $339 billion in funds. If the crisis goes on past April (which is likely), states will be forced to either cut spending or raise taxes.
Four Trump hotels, two he owns and two his company manages, appear to qualify for small business loans under the CARES Acthttps://t.co/YJxtfJdfrV
— meg cramer (@Meg_Cramer) April 8, 2020
Meanwhile, a whopping quarter of the stimulus budget is dedicated to large corporations. Despite initial agreements to enhance oversight by making loan documents public and including an inspector general and oversight board to supervise the loans, the Trump administration has reversed these guarantees. As a result, $425 billion of the $500 billion funds for corporations are now designated as unchecked loans.
Furthermore, as CNN’s Ed McCaffery reports, the CARES Act contains a provision which could allow real estate moguls to benefit from losses in real estate property:
“Previously, if a married couple had depreciation deductions that exceeded their real estate business income, the couple could claim that ‘loss’ to write off taxes on a maximum of $500,000 in income from other sources, like wages from a day job.” Under the new change, such a couple can now “deduct an unlimited amount of ‘excess losses’ in real estate against income from other sources. These deductions not only apply to the 2020 year, but to 2019 and 2018 as well–meaning that rich landowners can file amended returns now, and get refunds of perhaps millions of dollars, sooner than we can produce the number of ventilators we might need for the coronavirus crisis.”
If we consider that we are only just starting to approach the worst of the pandemic, all of these measures look like shoddy, temporary bandages covering up a gaping wound in our economic system. While Congress is working on new stimulus bills to brace for an economic meltdown rivaling that of 2008, activists and experts alike warn that it may be too little too late.
“This system was broken before coronavirus hit,” said Gabi Rossner, president of George Washington University’s Disabled Students Association. “As a disabled person, I am intimately aware of all the ways that health is tied to class in this country. I have struggled before to get medications, to meet with the right specialists, to get the correct diagnosis. These struggles have half as much to do with an underfunded medical system as they do with one that ties good health to having money.”
“The government has never paid real energy into improving the economic security or health of disabled people.” Rossner added, “In the US, many disabled people still legally make sub-minimum wage, earning as little as 25 cents an hour. If someone wants the economic assistance of SSDI, they have to subscribe to an asset limit of $2000 … The government has never been concerned with the economic well-being of disabled Americans, and even less so with their rights to access critical services such as healthcare and education.” Rossner does not believe the stimulus package will do enough for the most vulnerable of Americans. She is calling for rent freezes and rent control, the cancellation of student debt, and Medicare for All now.
Across the country, tenants’ rights organizations, disability rights groups, racial equity and justice groups, and other organizations have called for similar provisions. Despite years of complaints that America cannot afford these “socialist” style demands, these groups have pointed to the stimulus bill as proof that America can, in fact, provide for the basic needs of its citizens.
As American economist and professor Stephanie Kelton wrote for The Intercept, we could have easily passed many of the basics that lawmakers and pundits complained we had no money for. “There was enough slack in the economy to allow Congress to bring clean drinking water to the people of Flint, to beef up programs that provide nutritional assistance to children, and to build housing for those sleeping on the streets. Congress could have addressed these and other emergencies by writing and passing spending bills without the need for so-called pay-fors. If the votes are there, the money can always be made available.”
Simply put, the stimulus package has exposed that our system is built on forcing the most vulnerable to fight over scraps. Despite the fact that we’re one of the wealthiest countries in the world, lawmakers have treated certain Americans as expendable in order to protect capitalism. We need more: we need acts that are focused on protecting and uplifting the working class. We need acts that truly care–acts that translate into long-term economic and social changes. We are at a unique position in American history where we have the power to demand more and get more; there are simply no excuses for not providing policy provisions for working parents, the disabled, people of color, and the working and middle classes at large.
It’s time to demand change.
