The Century Foundation has analyzed the third phase of Congress’ emergency response to the deadly COVID-19 outbreak, the most expensive emergency measure in U.S. history, that was unanimously agreed to by the U.S. Senate on March 25. The bill is intended to cushion the pandemic’s blow to the nation’s economy and health care network. Below, TCF fellows highlight the impact the measure will likely have, and what Congress should next, in five areas of our expertise: unemployment insurance, health care, college students and student loan borrowers, K–12 education, and women in the workplace and their families. Here’s what’s good and what’s missing in Congress’ third emergency package in these five specific areas.

Unemployment Insurance

COVID-19 is resulting in an unprecedented and necessary drop in business activity and unemployment. The Senate bill delivers effective targeted aid to mitigate the damage and is a necessary next step for stimulus and recovery in response to this crisis. Senator Chuck Schumer, in fact, called the phase 3 Senate bill “UI on steroids.”

What’s Good

Phase 3:

  • Provides an extra $600-per-week boost to regular state unemployment benefits for claims through July 31, 2020, a four month period. This is a major increase that will get most workers to, or near, 100 percent of their pre-layoff wage.
  • Creates a special Pandemic Unemployment Assistance (PUA) program to provide benefits to those not eligible for regular state unemployment benefits and who are out of work because of the COVID-19 crisis, such as gig workers and the self-employed.
  • Provides an additional thirteen weeks of benefits for those who were already collecting regular state unemployment benefits when phase 3 was adopted.
  • Fully funds work-sharing benefits that allow companies to reduce work hours for their staff but keep them on full payroll, and maintain their health and retirement benefits.

What’s Missing

Phase 3 represents a major step forward for jobless families facing hardship this year. Certainly, the bill could have gone farther. The Take Responsibility for Workers and Families Act, introduced by House Democrats on March 23, would have provided significant extra benefits for new entrants to the labor market, such as college students and other new workers who won’t be able to find a job but don’t have enough work history to qualify for regular benefits. And, phase 3 did not fix the fundamental flaws in the underlying unemployment insurance program, including states that currently offer just twelve weeks of benefits, a fix that was included in a new comprehensive unemployment insurance proposal by Senator Michael Bennett.

Contributor: Andrew Stettner.

Health Care

The COVID-19 outbreak is forcing policymakers to review health insurance coverage for highly vulnerable populations, as well as overall support for our health care system. Congress’ phase 1 emergency response (HR 6074) required that vaccines be “affordable,” and it also expanded telehealth, while its phase 2 bill (HR 6201) guaranteed free COVID-19 testing. But the continued and rapid spread of the virus requires a more comprehensive, holistic response.

What’s Good

Phase 3:

  • Provides some clarification to the phase 2 bill as to which testing is covered, and requires rapid coverage of preventive care and vaccines within fifteen days of the relevant medical authorities making a recommendation to do so.
  • Provides a total of $150 billion for the nation’s hospitals and health care system to respond to COVID-19.
  • Provides $425 million to increase access to mental health services during the pandemic.
  • Supports health care workers by increasing funding for personal protective equipment (PPE) and medical supplies, establishes a Ready Reserve Corps, and includes directives for health workforce coordination and planning in order to build a more robust, well-trained health care workforce.
  • Provides $1.32 billion in supplemental funding for community health centers to ramp up testing and treatment on the frontlines.
  • Establishes new grants to promote telehealth.
  • Reauthorizes the Healthy Start Program and provides $125.5 million to reduce infant mortality rates and improve perinatal and infant health outcomes.

What’s Missing

While phase 3 brings critically needed new aid to this effort, it fails to address the desperate need for key health insurance coverage expansions as more Americans are being exposed to COVID-19 and losing their jobs and access to employer-sponsored health insurance during this crisis. In fact, 27.9 million people were already uninsured before the spread of COVID-19, and an estimated 87 million were inadequately insured. The health care system is already experiencing grave shortfalls, and in some geographic areas, it is failing to meet the needs of people who have fallen ill due to COVID-19 exposure and other chronic illnesses. Congress must expand health coverage in response to the pandemic.

Congress should embrace the health care elements of the House’s phase 3 bill that encourage people to seek testing and care, help limit the spread of the virus, improve individual health, and minimize financial harm. For example, Congress should ensure free (no cost-sharing) treatment and vaccines for insured and uninsured people, re-open the Obamacare exchanges for a “special enrollment period” for people to obtain health coverage, and expand financial assistance when they do. Congress should also provide automatic increases in federal support to states to pay for Medicaid costs when unemployment rises.

Contributors: Jamila Taylor and Jennifer Mishory.

Student Loan Borrowers

The COVID-19 outbreak threatens to create significant strains for the 44 million borrowers already drowning in more than $1.5 trillion of student loan debt. More than 7 million federal student loan borrowers were already in default before COVID-19 and employment disruptions caused by the outbreak require immediate action.

What’s Good

Phase 3:

  • Suspends for six months, through September 30, 2020, all payment requirements on federally owned student loans, including loans to parents. No interest will be charged during that period, and those six months will count toward federal loan forgiveness programs that require a certain number of years of repayment and/or service. Reports to credit bureaus will show the loans as current.
  • Stops all efforts by the federal government to collect on defaulted loans, such as garnishing wages or taking portions of Social Security checks or tax refunds, through September 30, 2020. For borrowers attempting to rehabilitate their defaulted loans, the period will nonetheless count (when borrowers complete rehabilitation, they become eligible for other repayment plans or financial aid).

What’s Missing

Many have called for the outright cancellation of some amount of student loans. The bill does not include any cancellation beyond setting interest at zero percent temporarily. And, the bill does not pause payments or reduce interest for borrowers with private student loans or federally guaranteed loans held by private companies.

Contributors: Robert Shireman and Jennifer Mishory.

College Students and Colleges

COVID-19 has disrupted the spring semester for millions of college students, including many low-income students who face job losses and unanticipated costs for rent and food living off campus, transportation, and remote learning technology. Colleges, meanwhile, are facing new costs from transforming their instructional approach and declining revenue. And state budgets—which provide support through aid to students and funds to public colleges—expect major declines in revenue as a result of the pandemic and anticipated recession.

What’s Good

Phase 3:

  • Includes $3 billion to states via a Governor’s Fund, which can be used for higher education or K–12 education spending directly related to emergency support in response to the pandemic.
  • Provides about $14 billion to higher education institutions to cover costs associated with COVID-19, requiring them to send at least half the money to students in the form of emergency grants related to the disruption, for expenses such as food, housing, course materials, technology, health care, and child care. The remainder of the money can cover institutions’ costs associated with changing the delivery of instruction, with the caveat that the money can’t be used for things like pre-enrollment recruitment activities or endowments.
  • Apportions the amount available to institutions using a formula that weighs heavily in favor of students who receive Pell grants but who are not enrolled in distance education, given that those schools did not have to significantly change their educational delivery model.
  • Includes $150 billion in general funding for states, Tribes, and local governments, to pay for expenses related to COVID-19. This has the potential benefit of helping to stave off immediate cuts to higher education budgets to account for other spending.

What’s Missing

The $150 billion in funding to states is a start, but more will likely be needed to stave off severe budget cuts elsewhere, including in higher education—particularly given the anticipated sharp decline in state revenue. And while the Governor’s Fund prohibits states from cutting higher education spending in order to receive that money, it allows for a broadly stated waiver for states with precipitous decline in state revenues. The amount available through that fund may not be enough to incent states to agree to such requirements and is not written in a way that gets states back to the funding table when the economy recovers. Congress’ next emergency package should expand funding for state higher education budgets to avoid cuts and address additional costs. Experience from the Great Recession shows this to be a serious concern.

Contributors: Jennifer Mishory and Robert Shireman.

K–12 Education

The COVID-19 outbreak is forcing nearly all of America’s more than 55 million public and private elementary and secondary school students to learn from home, causing a major disruption in learning and other key support systems for students, like free and reduced price meals, safe spaces, and social and emotional support from teachers and peers. These disruptions from the pandemic are particularly acute for vulnerable populations and will collectively further exacerbate educational inequities.

What’s Good

Phase 3:

  • Provides $13.5 billion in a new Education Stabilization Fund to support P–12 education. These flexible funds are meant to be used by school systems to address a long list of immediate needs, including preparation and planning, technology and online learning, student mental health, and sanitizing classrooms. The funds are to be distributed consistent with the Title I formula.
  • Provides $3 billion for the Governor’s Fund, mentioned above, to support school districts and institutions of higher education that are particularly hard hit by COVID-19, and for other emergency needs.
  • Walks back dangerously broad waiver authority given to the secretary of education in an earlier version of Senate Leader Mitch McConnell’s bill, ensuring, for example, that waivers of ESEA must be limited to one year and largely targeted to key provisions that legitimately can’t be implemented this year; and maintaining key equity guardrails for students, such as ensuring schools continue to implement their improvement plans next year to serve their most vulnerable students.

What’s Missing

The new Education Stabilization Fund and an additional $150 billion for states are key down payments to support students and schools, but are just bandaids for their immediate and unexpected needs. The anticipated gap in state and local revenue will decimate school budgets, just as schools and educators are being asked to do more to make up for lost time. During the Great Recession, Congress allocated $100 billion for education alone, to protect against substantial state and local revenue losses—and that was a crisis that did not actually impose massive new costs on schools, as this one does. Congress should quickly act to provide substantial, dedicated additional funding (1) to shore up state and local budgets to avoid further cuts to education; (2) for upcoming summer school and additional learning time to school systems that are willing and able to bring back their students when it is safe or otherwise work to make up lost time next year; (3) to support homeless students and the educators who serve them through McKinney-Vento funding; and (4) to close the digital Homework Gap.

Contributor: Emma Vadehra.

Women and Families

COVID-19 is hitting women and their families particularly hard. Women make up 75 percent of all health practitioners and technicians and 87 percent of health care support workers. And even beyond the health care sector, with so many mothers in the workforce, this crisis requires strong paid leave protections and a significant influx of child care funding.

What’s Good

Phase 3:

  • Provides direct assistance in the form of recovery rebates to families, with additional support for children.
  • Includes $3.5 billion in additional funding for the Child Care Development Block Grant to provide child care assistance to health care sector employees, emergency responders, sanitation workers, and other workers deemed essential during the response to the coronavirus.
  • Allows employers and self-employed individuals to receive an advance tax credit from the U.S. Treasury for the cost of providing emergency paid sick days and paid leave (instead of having to wait to be reimbursed).

What’s Missing

Relief policies such as emergency paid sick leave and paid family and medical leave leave must not discriminate based on employer size, citizenship status, classification, or job type. Yet, phase 3 does not fix the gaps in the phase 2 bill’s paid leave policies and in fact makes them worse by including the authority to exempt executive branch employees. In addition, Congress needs to invest in community infrastructure and keep the child care sector strong. Finally, recovery rebates must help families struggling actually cover their costs, and include everyone who pays taxes, including workers who file TINs.

Congress should, (1) adopt stronger leave policies such as those reflected in the PAID Leave Act to cover everyone who needs paid time to care; (2) invest at least $50 billion for child care and the child care workforce and provide for the care needs of broadly defined essential workers; and (3) support informal sector workers, including domestic workers such as home care workers, nannies, house cleaners, and other low-paid, vulnerable workers who are likely to be left out of much of the bill’s relief efforts.

Contributors: Julie Kashen and Amanda Novello.

Resources

Congress has passed two emergency measures in response to COVID-19 that have been signed into law, phase 1 and phase 2, and a third measure, phase 3, is expected to be signed into law this week.

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