Despite an initial Democratic push for a bold infrastructure bill to infuse the economy with cash and jobs, the next coronavirus bill Congress may take up later this month could look very similar to the last one it passed. House Speaker Nancy Pelosi is already calling it “CARES 2.”
A fourth package could include more direct payments, extended unemployment insurance, health insurance for laid-off workers who lose theirs, and hazard pay for front-line health care workers and other essential employees like grocery store workers, truck drivers, and postal workers.
With an unprecedented 10 million people applying for unemployment benefits due to the coronavirus economic crisis, Democratic leaders on Capitol Hill are acknowledging the relief provisions in the $2 trillion bipartisan CARES Act simply may not be enough for the stark economic hardship many Americans now face.
Both Senate Minority Leader Chuck Schumer and Pelosi told Vox on separate press calls that Congress needs to take additional action to alleviate the financial hardship of workers and small businesses.
“I believe that we will need a Covid 4 [package] and I hope we’ll do it relatively soon,” Schumer told Vox on Friday. “And I think this is one of the big questions. Do we need more money? We probably will.”
“I think now we need a fourth bipartisan bill, and I think the bill could be very much like the bill we just passed,” Pelosi told CNBC’s Jim Cramer Friday. “I’d like to go right back and say let’s look at that bill and update it for some other things we need, and again put money in the pockets of the American people.”
Pelosi spent much of this week pushing the idea of a recovery infrastructure package to help get Americans back to work and give struggling state and local governments a boost. But on Friday, she shifted her message, saying infrastructure might be moved to a later bill.
“While I’m very much in favor of doing some of the things to meet the needs — clean water, more broadband, and the rest of that — that may have to be for a bill beyond this,” Pelosi said on CNBC. “Right now, I think we have a good model; it was bipartisan, it was signed by the president, but it’s not enough.”
And they may have more luck working with Republicans on such a package than an infrastructure package; Senate Majority Leader Mitch McConnell has also said a fourth bill may be necessary, but he wants to focus on making sure aid from the third package reaches Americans.
It’s a tacit acknowledgment from Democratic leadership that the spiraling economic effects of the US coronavirus outbreak are much worse than anyone could have imagined — and may not end anytime soon.
“We’re still in the midst of the crisis; that is the difficulty in this,” a congressional aide told Vox. “Imagine it’s a hurricane — it’s not just moving along, it’s sitting on top of you.”
What the next coronavirus package could contain
The bipartisan CARES Act cost a historic $2 trillion, but it may be just the beginning of the federal response.
Congress isn’t scheduled to return to Capitol Hill until April 20 at the earliest, but discussions about the next bill are underway. Though we’re nowhere near a bill draft yet, here are some of the ideas being talked about:
Extending expanded unemployment insurance: Anyone who is on unemployment or signing up for unemployment benefits will get an extra $600 per week on top of their current state benefit until the end of July. But Schumer and Pelosi admitted that may need to be extended, depending on the state of the US economy this summer.
“Certainly, I would be willing, if the numbers continue to be bad, to expand the program,” Schumer told Vox. “We do not want to leave people behind,” Pelosi agreed.
“Should we again do the $600? I certainly think so,” she told Vox. “So that the people have the purchasing power to help them meet their needs but also spend it, inject demand into the economy, help the stimulus as well as relief.”
Hazard pay for health care and essential workers: The US Department of Labor defines hazard pay as “additional pay for performing hazardous duty or work involving physical hardship.” Schumer said he wants to see hazard pay for health care workers dealing with an influx of Covid-19 patients as well as other essential workers who cannot work from home, like grocery store and food delivery workers, truck drivers, postal service workers, and others.
Expanded OSHA regulations for health care and other essential workers: House Democrats want to include something in a bill requiring the Occupational Safety and Health Administration to put in regulations to protect health care workers and essential personnel from infectious diseases.
“There is no legal requirement for health care facilities — not just hospitals, but nursing homes, mental health institutions, ambulatory care facilities, and others — to take necessary steps to protect front-line health care workers,” said House Committee on Education and Labor Chair Bobby Scott (D-VA) on a press call. “We introduced legislation requiring OSHA to adopt an emergency temporary standard and pushed to include it in the last Covid-19 bill, but it was blocked by the Senate and the administration.”
More direct payments to Americans: Many Americans will see direct payments in the coming weeks and months from the CARES Act. Most adults making less than an adjusted gross income of $75,000 annually will receive a $1,200 one-time payment. Payments will go out to individuals whose income is as much as $99,000, but those bringing in more than $75,000 won’t receive the full amount. Pelosi on Friday said she could see more direct payments for Americans in a fourth bill.
Expanded health care access: As millions of Americans get laid off, many are also losing the health insurance they get through their employer. Democratic leaders are calling on the Trump administration to reopen the enrollment period for health care exchanges, so laid-off people can get coverage. The Trump administration has so far declined to do so.
“We haven’t gotten to the question of the uninsured,” Sen. Ron Wyden (D-OR) said on a press call. “I share [Schumer’s] view this is going to be essential.”
An infrastructure bill is still being talked about — but it probably won’t happen right away
Earlier this week, Pelosi and House committee chairs laid out the first pieces of a potential infrastructure bill — the “recovery” component of coronavirus relief. Democrats wanted to include expanding rural broadband and 5G capacity, building community health centers, and fixing up American water infrastructure.
Democrats believe they can work with President Trump on an infrastructure bill; the president tweeted his support for the idea, calling on Congress to get to work on a bipartisan infrastructure bill as its “phase four” coronavirus stimulus and recovery.
“It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country!” Trump tweeted.
But Senate Republicans may need more convincing. McConnell made it clear he didn’t want to start considering a recovery bill until Congress ensured resources from the CARES Act were actually getting to workers and businesses.
“Well, look, the current law has not been in effect for even a week yet,” McConnell told Fox Radio. “The Treasury Department’s got a massive, complicated problem here in getting all of this money out rapidly. And the speaker is already talking about phase four. Well, we may need a phase four, but we’re not even fully into phase three yet.”
While Democrats will likely continue to draft an infrastructure package in the background, it’s a more distant priority than continuing to get emergency money out as fast as possible. And it makes sense; this week ended with the realization that far more workers are being impacted by the coronavirus economic crisis than originally thought.
As Vox’s Matt Yglesias wrote, the government’s unpredictable response to coronavirus makes it really difficult to know how long the public health crisis and aftershocks on the economy will last:
Policymakers currently seem to be assuming that the economy is kind of like a light switch that they’ll be able to turn back on when the virus is under control. But that’s not really an idea the world has a lot of practical experience with, and it’s far from obvious that it will work in practice.
All we really know is that the country is currently experiencing an unprecedented economic downturn and nobody can say when it will end. Staving off a prolonged spell of mass unemployment is going to require wartime-style mobilization efforts involving both enormous levels of government spending and a fully cooperative central bank.
We’re in uncharted economic territory, and Congress’s next steps are crucial.