'The Federal Government Has the Resources That Could Stave Off the Economic Pain People Are Already Feeling'
Janine Jackson
Janine Jackson interviewed EARN’s Naomi Walker about Covid-19 relief for the April 17, 2020, episode of CounterSpin. This is a lightly edited transcript.
<a href="http://www.fair.org/audio/counterspin/CounterSpin200417Walker.mp3"><strong>MP3 Link</strong></a>
Janine Jackson: The absence of competent, much less compassionate, federal coordination and guidance through the economic shock of the Covid-19 crisis is becoming clear. State and local governments are struggling with the combination of new demands and a steep drop in revenue. And remember, unlike the feds, most states have to balance their budgets. That's why more than 180 organizations and state and local elected officials sent an open letter to members of Congress, calling for $500 billion in relief for state, local, territorial and tribal governments, along with other transformative investments.
We're joined now by Naomi Walker, director of the Economic Analysis and Research Network, a network of state policy, research and advocacy groups coordinated by the Economic Policy Institute, who spearheaded this open letter. She joins us by phone. Welcome to CounterSpin, Naomi Walker.
Naomi Walker: Thanks so much, Janine. Glad to be here.
JJ: It's not just the raw fact that the $150 billion that the CARES Act designated for state and local governments is not enough. This open letter underscores that that insufficiency of resources drives decisions that drive decisions that end up pushing real recovery further out of sight. Is that so?
NW: That's exactly right. You know, with the states and localities facing these shortfalls, and as you mentioned, they're not able to do deficit spending—like the federal government can and should—and so they resort to cutting budgets, and cutting budgets for programs that are really important, particularly in the midst of a pandemic and economic crisis. Ohio, for instance, just announced that they're going to do 20% across-the-board budget cuts, or at least that's what the governor has proposed, and that has real implications for people, and how quickly we can get the economy back on track after the crisis is over.
JJ: So these budget cuts clearly are going to fall—we know who they fall on, when someone says “austerity,” we know who gets hurt by that, and it's the people who are already hurting most now.
NW: Exactly. The most vulnerable workers, workers in low-wage jobs, communities of color, women; a lot of the groups that we see negatively impacted by a lot of the policies in place will certainly bear the brunt of the impact of the budget cuts.
JJ: Beyond the $500 billion, the letter—again, signed by a range of groups, from Atlanta Jobs with Justice to the Center for Disability Rights to Citizen Action Illinois—it urges Congress to “adopt a transformative approach” to protecting workers and businesses. What does that mean, a transformative approach?
 Naomi Walker: "This is really an opportunity to think bigger and think in a bolder way than we have before about what it's going to take, not just to fill the gaps in our infrastructure that the crisis has so clearly laid bare, but also to think beyond, about what we want our economy to look like."
NW: I think that this is really an opportunity to think bigger and think in a bolder way than we have before about what it's going to take, not just to fill the gaps in our infrastructure that the crisis has so clearly laid bare, but also to think beyond, about what we want our economy to look like, what we want our safety net to look like going forward, so that they're able to support an economy that works for everybody, not just the very richest among us.
And so one of the approaches that EPI is calling for, along with a lot of other groups, is that the US should be considering some type of payroll guarantee program, just like the United Kingdom and Denmark and the Netherlands have implemented. And that would allow workers to stay attached to their jobs. The national government in those models pays up to 90% of all payroll costs for employers that are impacted by the shutdown. And that really helps create an economic “deep freeze” that allows everybody to just hold tight. It holds workers and businesses as harmless as possible while the economy shuts down and people stay home to help stave off the worst of the pandemic.
JJ: Yeah, it's possible to have a pause, and not to have a crash.
NW: Right.
JJ: But framing matters so much here. Keeping ideas like a protected pause off the page or in the margin, I think, is legitimizing these fake and unnecessary choices that are lethal, that are killing people. But there's a sense that, “Oh, well, we have to make a trade-off.” And we don't have to make that trade-off. We can do something else.
NW: Yeah, there are other ways. You're exactly right. It's a false choice that’s being set up, and the federal government has the resources that it could really throw down right now and stave off the economic pain that people are already feeling, and if more significant measures aren't taken very soon, are gonna be feeling for a very long time.
JJ: Yes, pain and of course, insecurity—you know, “What's gonna come next?” But if you mention other countries, other models—you've mentioned the UK, Denmark and Netherlands—it's like “Avert your eyes!” You know, “We can't do that here, because it's not American something something freedom.”
NW: We've seen what the American system has gotten us, and it's left people vulnerable and exposed, and it's time to look for other models.
JJ: Well, what are some of the other things that this letter is encouraging Congress to do?
NW: So we think that one of the things that this pandemic has shown us, just like the Great Recession and the fake fiscal crisis before that in 2000 have shown us, is that our nation's unemployment insurance system is really not prepared for a crisis of this magnitude. And we think that...well, Congress took really unprecedented measures to expand unemployment insurance in a way we've just never seen before. And that's fantastic. There's more that needs to be done.
And so we want to make sure that the benefits that were included in the CARES Act continue for as long as economic conditions warrant. The CARES Act set kind of arbitrary guidelines for when some of this aid would end. Some of the new expansions in the unemployment insurance system end at the end of July. Who knows where we're going to be at the end of July? And so instead of tying it to random dates, we think it really needs to be tied to continuing as long as we're in this economic downturn.
We also know that unemployment insurance, even though it's vastly expanded who was eligible for the pandemic unemployment assistance, there's still some workers who are going to fall through the cracks. And it's not small numbers; these are significant numbers of workers. So immigrant workers who were left out of these expansions, and new labor market entrants, like college students or folks just coming out of college, or coming out of the criminal justice system, who don't have a work history, are not able to get this new unemployment insurance right now. And we think that needs to be fixed.
And then the last thing is, there's been a ton of media reports talking about how long people are waiting on hold, trying to get through to their state unemployment insurance offices. And while there's been some money for administrative aid included in some of the federal bills, we think that it needs $30–40 billion more to make sure that those systems can meet the demand.
JJ: There are other things about—and you don't have to go through them all—but a direct cash payment; a lot of folks looked, again, to other countries, and said, “You know, they are getting covered for a long time, we're getting a one-time check.”
NW: Right.
JJ: Which is going to be late, because Donald Trump needs to put his name on it.
NW: Exactly.
JJ: But back in reality, you think more needs to be done in terms of direct cash payments.
NW: Yeah, for sure. The $1,200, one time, just not enough. We need to look at that amount on a monthly basis for the remainder of this crisis. The cash payment was also really restrictive about who's eligible to receive the payment, and limited it to folks who had filed tax returns, or citizens, and we think that it should be available to anybody who is making under the income threshold, regardless of their tax filing or immigration status.
JJ: And we know, of course, that folks contribute to the economy.
NW: Right.
JJ: We know that that money will go directly into goods and services, which is presumably what you want to happen.
NW: Exactly. It's not like the folks who would be getting this money are hoarding this away, or throwing it under their mattresses. These are folks who need this money. They need to spend it on rent and groceries and healthcare. It will be a big boost to the economy to get money into folks’ hands.
JJ: And then there are points, again, about personal protective equipment, and testing and treatment for frontline workers, and things to do with worker protections in general.
NW: Again, we've seen so many stories, and heard from so many workers, who completely lack the kind of protective equipment that they need. We also know that there's not enough money for testing and treatment. We want to make sure that anybody could get tested or treated for coronavirus. Those expenses should be picked up by the federal government, and as the CDC and the Trump administration talk about getting people back to work in the next few weeks—which is completely misguided—we need to make sure that we're talking about protective equipment and protective gear for everybody, not just the essential frontline workers.
JJ: With Trump doing his Trump thing, there is a lot of focus on state and local governments. But then we see the White House directing state relief in these hyperpartisan ways. And states, it feels like, scrabbling among themselves for resources. I mean, other governments are going to do what they can, but there really is no substitute for federal-level coordination on something like this, is there?
NW: Absolutely. This is a clear case of where the federal government has an incredibly vital role to play. And the fact is, the Trump administration has really fallen down on the job, not unexpectedly, but still it's tragic to see the consequences of this failure to act, and the failure to lead in this moment. And, you know, the nation's governors are doing a tremendous job in many cases, trying to make sure that their states have equipment that it needs, that they get the resources it needs. But even with that tremendous leadership that we're seeing come out of many governors, it's just not a substitute for federal action.
JJ: Let me just ask you, finally, has there been response, or what has been the response, to the letter? And is there a followup plan? What comes next?
NW: I think what's next is we have to continue to put as much pressure as possible on Congress to allocate this $500 billion. There's incredible alignment among the folks who work at the state and local levels. We're hearing the call for $500 billion coming out of the governors, the counties, the League of Cities and all the advocacy groups that have signed on to this letter. And so it's clear what needs to be done.
And the question is, is there going to be enough consensus in Congress to make it happen? What we've been hearing up until now is the House leadership is pushing for as much aid as possible, but what we're hearing so far is that the numbers being discussed in state and local aid are really still not up to the task of what needs to be done. And so there's a tremendous amount of work. So I hope that people are reaching out to their congressional delegations and urging them to move this money to the states and localities as quickly as possible.
JJ: We've been speaking with Naomi Walker, director of the Economic Analysis and Research Network, EARN, coordinated by the Economic Policy Institute; they're online at EPI.org. Naomi Walker, thank you so much for joining us this week on CounterSpin.
NW: Thanks so much, Janine. It was great to be here.
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