On Friday, May 15, 2020, the House of Representatives passed the HEROES Act, the fifth major piece of federal legislation in direct response to the outbreak of the novel coronavirus, COVID-19. The $3 trillion emergency package, the largest so far, was supported by Speaker Nancy Pelosi and nearly all House Democrats, was opposed by all but one Republican congressman, and has been sent to the Senate for its consideration. The bill provides $1 trillion in additional aid to state and local governments, tribal governments, and U.S. territories, and more than $400 billion for a second round of stimulus checks to low- and middle-income Americans and their dependents. The remainder of the money in the bill is dedicated to education, health care, testing and contact tracing, food assistance, renters’ and homeowners’ assistance, unemployment insurance, tax cuts to assist employers, workers, children and families, and numerous other provisions that are considered critical as the nation continues to grapple with the spread of the deadly virus and the economic crisis it has caused.
There are significant disagreements between the House and the Senate and the Trump administration that will need to be resolved before the bill can move forward, including, for example, whether to shield employers from lawsuits related to the virus, how much more aid to state and local governments is needed, and whether the immigrant community will qualify for certain elements of the bill. Policy experts at The Century Foundation, which specializes, among other areas, in education, health, and economic policy analysis and recommendations, offered the following assessment of the HEROES Act within our areas of expertise. TCF has published numerous reports, commentaries, and policy recommendations in response to the pandemic, which are collected here.
The COVID-19 pandemic has already cost the lives of at least 90,000 people in only three months in the United States. It requires a massive response to support our healthcare system, to treat those infected, to ensure that people can access health care services in the midst of a public health emergency, and to ensure coverage for those who have lost their health insurance along with their jobs and savings during the pandemic-induced economic recession. The Affordable Care Act (ACA) has provided a backstop for millions, but the virus has highlighted existing disparities that require additional Congressional action. The HEROES Act takes significant steps to build upon the actions Congress has already approved for COVID-related health care and insurance.
- Increases (temporarily) the “bump” in the federal share covering state Medicaid programs, from 6.2 percentage points in the Families First Coronavirus Response Act to 14 percentage points, which will help discourage states from cutting their Medicaid programs.
- Includes a temporary 100 percent federal match for Medicaid targeted to Indian health providers and $2.1 billion in aid to the Indian Health Service to ensure access to much-needed health care services, PPE, adequate housing, and sanitation support for native American populations.
- Eliminates cost-sharing for COVID-19 treatment and future vaccines for veterans; federal workers; people enrolled in private insurance; people enrolled in Medicaid, Medicare, and TRICARE; and people who are uninsured through optional Medicaid expansions. It also sets a limitation on billing the uninsured for providers accepting new dollars from the bill’s Health Care Provider Relief Fund.
- Creates a special enrollment period for people to sign up for health coverage on the ACA insurance marketplaces.
- Subsidizes nine months worth of full COBRA premiums for people who lose their employer-based insurance.
- Allocates $3 billion for mental health support, including substance abuse treatment and suicide prevention.
- Allocates $75 billion for testing, contact tracing, and other activities to mitigate and stop the spread of COVID-19. The bill also clarifies the requirement of the Secretary of Health and Human Services (HHS) to implement a national strategic testing plan, as outlined in the Paycheck Protection and Health Care Enhancement Act. The testing plan must be updated accordingly with specific guidelines on ensuring the availability of tests for at-risk populations and underserved communities, plans to increase testing supplies, and mechanisms for reporting testing demographic data.
- Clarifies the requirement of the Secretary of HHS to publicly report demographic data on race, ethncity, age, sex, and gender of people diagnosed with COVID-19, as outlined in the Paycheck Protection Program and Health Care Enhancement Act. The report must be updated every thirty days and include challenges to adequate data collection as experienced by local and state health departments. Descriptors related to diagnosis, hospitalizations, intensive care admissions, and mortality rates due to COVID-19 must also be disaggregated demographically and reported to Congress, along with specific strategies for reducing disparities. The bill also authorizes additional funding for states, localities, and tribal communities to increase infrastructure and modernize data collection methods related to health inequities.
The bill does not increase the Medicaid expansion match to 100 percent, which would make it more likely that states that have not expanded their programs would do so. It also does not include an automatic stabilizer to ensure that the federal share of Medicaid costs go up when state economies go down. While the bill includes an additional $100 billion in grant funds for hospitals and health care providers for lost revenue and health care expenses related to COVID-19, which is an important provision, it does not prioritize these grants for hospitals and providers in high-need areas and those providing care to underserved populations, including the uninsured, rural populations, low-income people, Medicaid enrollees, and communities of color. The bill also fails to include the extension of postpartum coverage for new mothers on Medicaid, which is drastically needed to reduce the maternal and infant health consequences of COVID-19, reduce maternal and infant health disparities, and ensure the continuum of comprehensive health care for growing families at this critical time.
Contributors: Jen Mishory, Jamila Taylor
The economic damage from COVID-19 is severe and will be lasting, and previous federal legislation has not delivered sufficient aid. Goldman Sachs estimates that unemployment could reach 25 percent in the second quarter, and the Congressional Budget Office projects it will stay above 9 percent throughout 2021. Poor, underemployed, and unemployed families—including communities of color also battling severe COVID-19 outbreaks—need additional aid now to stave off hunger, homelessness, and financial ruin. As emphasized by Federal Reserve Bank Chairman Jerome Powell, the economy needs additional stimulus to make up for lost consumer spending. That stimulus should be delivered in ways that maximize employment and provide aid to those who need it most. The HEROES Act provides substantial economic stimulus that, while certainly not the last word on this crisis, is critical for working people, vulnerable populations, and America’s overall economic recovery.
- Extends the eligibility of the additional $600 per week in Federal Pandemic Unemployment Compensation (FPUC) from July 31 to January 31, allowing jobless workers displaced by COVID-19 to maintain much more of their income. Without FPUC aid, millions of jobless workers would be attempting to live on state benefits that are less than 40 percent of the average worker’s wage.
- Delivers an additional $1,200 stimulus payment per person. Correcting a major error in the CARES Act, passed by Congress on March 27, HEROES would deliver $1,200 to adults and an additional $1,200 each to up to three dependent children per household, as opposed to only $500 per dependent child, and includes all dependent children, not just those under the age of 17. Furthermore, this aid would reach immigrants working in America who pay U.S. taxes through individual taxpayer identification numbers (ITINs).
- Increases the CARES Act’s Employee Retention Tax Credit to support companies that keep their workers on payroll, and allows business expenses to also qualify for the credit. The credit is increased from $10,000 to $15,000 per quarter, making it a more potent job saving tool.
- Includes an increased and fully refundable child tax credit of $3,000 for all children, and $3,600 for young children, and directs these resources to be advanced to families with children throughout 2021. This credit would aid all children, whether or not their parent or guardian has employment income in 2020, and would save millions of kids from the traumatic stress of poverty.
While the $3 trillion package will give the economy a significant jolt, even more stimulus will be needed to preserve our $20 trillion economy. Unemployment insurance delivered $48 billion of economic stimulus during the month of April alone, and the economy will continue to need this support into 2021. Provisions in the CARES Act should be extended far past the bill’s January 2021 end date, and unemployment benefits should be extended until the unemployment rate returns to normal levels, through automatic triggers. Moreover, there is an urgent need to expand the CARES Act’s pandemic unemployment assistance program to graduating college and high school students who won’t be able to find a job this summer because of COVID-19 and the economic downturn, but don’t qualify for assistance if they did not have a work history or solid job offer—or because they cannot find work due to the poor economic conditions, even if not directly due to COVID-19 or related emergency orders. The economy will be better off if workers don’t lose their jobs; the Senate should expand aid to companies that keep workers employed or rehired them, by adopting different plans proposed by a wide range of senators—such as Bernie Sanders, Josh Hawley, and Doug Jones—to cover 80–90 percent of worker salaries with grants from the IRS, which could be accomplished by enhancing the Employer Retention Tax Credit.
Contributor: Andrew Stettner
Now is the time for the federal government to increase support for and access to quality higher education. Despite shorter-term questions about enrollment declines, in the COVID-19-induced recession—as in the last recession—more people will likely enroll in education over the long run while they are out of work, but they will have more limited means to pay out of pocket. With state budgets being decimated due to the recession, however, states are likely to cut their support for public higher education; historically when that happens, it has meant they will raise tuition, and, at times, limit access. Meanwhile, student loan borrowers struggle, and predatory colleges aggressively recruit the most disadvantaged populations, seeking to enroll them in low-quality programs financed by student loans. In addition to general state and local aid provisions, the HEROES Act provides support to states specifically to maintain access to higher education, expand assistance to student loan borrowers, and provide targeted relief to nonprofit colleges.
- Expands temporary student loan interest and payment relief to federal borrowers left out of the CARES Act, and extends the relief for all federal borrowers for an additional year. It also provides for a trigger to extend relief from interest accrual past the one-year time frame in the event of ongoing negative economic conditions.
- Prohibits the U.S. secretary of education from imposing eligibility restrictions that exclude undocumented students and other students from CARES Act emergency grants.
- Cancels debts of borrowers who were victims of predatory schools, and provides debt reductions to a subset of distressed borrowers (which should be better defined in light of new economic conditions).
- Supports student access to public higher education and minority-serving institutions by delivering aid to states conditioned on continued state funding of college access.
- Prevents scam online programs being financed by federal student loans by requiring courses to include regular and substantive interactions between instructors and students.
- Offers relief to nonprofit colleges in financial distress while requiring planning for potential closures or mergers.
The funding gaps faced by states are likely to be larger than the support provided by the bill; a coalition of twenty-five higher education organizations and unions have asked for $46 billion in support for state public higher education budgets. Moreover, the Trump administration has cut oversight efforts aimed at predatory recruiting by colleges, a problem that is likely to escalate in this economic downturn. Now, or in a future Higher Education Act reauthorization, Congress should do more to protect consumers from predatory schools by reinstating the Gainful Employment rule, closing the 90–10 loophole, and upgrading oversight and enforcement, including establishing a robust “mystery shopping” program to root out manipulative and unfair recruiting.
Contributors: Robert Shireman, Jen Mishory
The COVID-19 pandemic has caused one of the greatest disruptions to students and teachers since America’s public school system was established. The closing of public schools and the shift to online learning for more than 55 million students has been hard for all involved, but it has been particularly difficult for low-income students and other vulnerable students, such as homeless students and students with disabilities, who rely on schools for a variety of essential services, such as meals, and who may lack computers and internet access at home or need differentiated support for online instruction. In addition, due to state and local revenue shortfalls, which are only partly offset by new federal aid, public schools are under pressure to engage in massive layoffs that will cause class sizes to skyrocket and student learning to suffer. In addition to the critical bump up in aid to state and local governments provided for in the HEROES Act, the bill provides additional direct funding for K–12 schools that is essential to support students and teachers during this crisis.
- Provides new federal aid to education. The bill includes $58 billion for K–12 local education agencies that can be spent on many important purposes, such as health and safety measures in response to coronavirus, supports for online learning, development of social-emotional learning, and summer programs. It also includes $4.4 billion for governors to restore state and local support for K–12 and higher education.
- Lifts the $10,000 cap on the deductibility of state and local taxes for 2019 and 2020. SALT, as it is known, constitutes the largest federal subsidy to public education. Removing the cap, New York Governor Andrew Cuomo argues, is the single most important thing in the HEROES Act to support states such as New York.
- Begins to close the Homework Gap and the digital divide by providing $1.5 billion to allow the FCC’s E-rate program to be used to provide broadband connectivity and devices, like laptops, to kids in households without them, and includes $4 billion to subsidize emergency broadband services for low-income households that lack service or have inadequate plans.
- Prohibits the Department of Education and grantees from funneling the $58 billion fund for K–12 local school districts to private schools, as the administration did with CARES Act funding.
This funding is a critical step in the right direction, but is unlikely to fill the gaps created by state and local revenue cuts due to the recession: it will not be adequate to help students catch up from the large learning losses that are likely to result from school building closures, completely close the Homework Gap, or meet other additional needs schools will face. A dedicated fund for extra learning time (through summer programs, tutoring, or extending the length of the school day or year) would ensure that federal dollars go beyond filling the large shortfalls in state and local education budgets. The bill’s existing maintenance of effort provisions allow states to cut education funds in regressive ways that disproportionately harm low-income school districts and students, as we know states did during the Great Recession and we are seeing them do again.
Contributors: Michelle Burris, Richard D. Kahlenberg, Halley Potter, Emma Vadehra, Danny Weiss
With schools closed and half of child care providers shuttered during the pandemic, parents—particularly essential workers—are scrambling to find safe, convenient, affordable child care options, as well as paid time off to care for family members. The collapse of the child care sector, already under-resourced before the pandemic, may lead to the loss of 4.5 million licensed child care slots—half of the child care capacity in the United States—meaning many parents will not be able to return to work if and when the time comes, thus further slowing the economic recovery. Women—who are already losing more of the jobs in this economic crisis—will bear the brunt of the impact. The HEROES Act makes great strides to help working families during the crisis in a number of areas.
- Fixes the paid leave gaps in the Families First Coronavirus Response Act to cover all workers and care needs, and provides funding for education and outreach so people know they are eligible.
- For essential workers, establishes a Heroes’ Fund to provide premium pay to those on the frontlines; and provides them with family care resources to support care needs across generations.
- Provides additional direct financial payments for families, including immigrant families.
- Requires the Occupational Safety and Health Administration (OSHA) to issue a strong, enforceable standard to help protect workers from the spread of COVID-19.
- Provides emergency assistance for renters and homeowners so families who have lost income don’t get evicted or lose their homes.
- Boosts funding for nutrition assistance through SNAP and child nutrition programs to promote food security and public health.
The child care sector needs $9.6 billion per month to provide care for children of essential workers and remain stable to be able to support parents when the sheltering in place rules end. The HEROES Act builds on the $3.5 billion in the CARES Act with an additional $7 billion—but that’s barely enough to cover the needs of a single month for the sector. Children and their families, and all of our early educators, need a significant increase of at least $50 billion in the short-term.
Contributors: Julie Kashen
The immigrant community has been devastated by the pandemic, disproportionately represented as low-wage and underinsured workers in essential industries with few benefits, including in the agriculture, food manufacturing and preparation, and health care sectors. The HEROES Act includes important benefits to immigrant workers and families and corrects a number of significant shortcomings in the CARES Act that limited benefits to households where every member has a Social Security number.
- Extends the $1,200 payment per taxpayer and dependents to ITIN filers and their families. The bill also retroactively ensures ITIN filers will receive the initial payment under the CARES Act. The Institute on Taxation and Economic Policy estimates 7.8 million individuals will benefit from the change. Under the CARES Act, over 15 million individuals in mixed-status and undocumented immigrant families were omitted from economic support, including 5.5 million U.S. citizen spouses and children.
- Allows Medicaid coverage of COVID-19-related testing, treatment, and vaccines for uninsured individuals regardless of immigration status and expands funding for health centers supporting underserved populations. This is critical for the estimated 45 percent of undocumented individuals who are currently uninsured and may fear seeking COVID-19 treatment at a hospital given the high cost of health care.
- Provides temporary deferred action and work authorization for undocumented workers in essential critical roles and extends immigration status and work permits for Temporary Protected Status (TPS) and Deferred Action for Childhood Arrivals (DACA) holders.
- Requires that the Department of Homeland Security review immigration files and prioritize the release of individuals who are not subject to mandatory detention to decrease the population in detention centers, while also improving conditions regarding external communication and hygiene for individuals who remain in Immigration and Customs Enforcement (ICE) custody.
While there has been discussion around expanding unemployment insurance for those who have been left out, that conversation has not expanded to include undocumented immigrants, despite the estimated $13 billion this community has paid into unemployment insurance taxes over the past decade. Moreover, there is no mention of the suspension of the public charge rule, which, under an administration that has criminalized and attacked the immigrant community, does little to encourage trust in accessing services or assuage confusion within the community about what can and cannot be counted against individuals when they seek to adjust their status.
Contributor: Rosario Quiroz Villarreal
Stabilizing and growing AmeriCorps can speed our return to a healthy society by providing a meaningful boost to many young people’s careers, delivering necessary supports to the communities most impacted by the pandemic (including contact tracing and other public health services), and maintaining the strength of the nonprofit sector. Moreover, it will do so at a net savings to taxpayers.
- Requires the Corporation for National and Community Service (CNCS) to prepare a feasibility study that could be a basis for later legislation to scale up AmeriCorps. Under the provision, CNCS would be required to explore the possibility of partnerships with the Department of Health and Human Services, the Centers for Disease Control, and public health departments to respond to public health needs, such as testing, contact tracing, or related activities.
We are in a crisis moment, in which conducting a study will take too long to be helpful. AmeriCorps has an almost three-decade track record and infrastructure of serving communities in every state, and an expansion of AmeriCorps will enable them to provide much needed services (public health, food security, education, economic opportunity, and disaster/emergency response) as well as employment opportunities for young people, who are facing disproportionately high unemployment rates. Community needs are dire, ranging from contact tracing to helping students catch up this fall, and inclusion of the The Pandemic Response and Opportunity Through National Service Act, or a similar plan to expand AmeriCorps slots and support communities, could solve these challenges concurrently.