5/15 UPDATE: The House passed the stimulus bill despite opposition from some progressive Democrats who believed the bill didn’t go far enough to protect workers and some moderates who criticized the lack of bipartisan support.
On Tuesday, House Speaker Nancy Pelosi (D-California) announced a $3 trillion stimulus package—including key worker and renter protections like rent relief, eviction bans, and cash payments—to soften the economic blow of the COVID-19 shutdowns on American workers and businesses. Over a month has passed since Congress approved the $2.2 trillion CARES Act, the first major stimulus package. Since mid-March, over 36 million workers have filed for unemployment while more than 1 in 5 households reported experiencing food insecurity in the past month. Among households making less than $40,000 annually, 40 percent lost jobs in March.
The ambitious Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act includes a range of Democrat priorities such as providing nearly $1 trillion to mitigate budget losses for state, local, and tribal governments; $25 billion to support the US Postal Service; extending emergency family and sick leave through 2021, and more.
To help stabilize renters and workers, the new bill includes:
- $100 billion in rental and utility assistance and $500 million for supportive housing;
- A moratorium on evictions based on nonpayment of rent for all tenants;
- One-time direct cash payments of $1,200 to individuals making below $75,000 annually as well as $1,200 for each child (up to three).
The House plans to vote on the proposal Friday, and with Democrats in the majority the bill will pass if the party rallies behind leadership’s proposal. But there are no plans for a vote in the Senate, where Republicans have resisted calls for another relief package. Senator Lindsey Graham (R-South Carolina) described the bill as “dead on arrival,” while Senate Majority leader Mitch McConnell (R-Kentucky) criticized Democrat priorities and seemed to defer to the White House for direction.
The path to Senate passage of the bill is unclear, especially without major concessions to Senate Republicans—such concessions led to nearly $500 billion in corporate bailouts in the CARES Act. Democrats face a tough road ahead to prioritize federal support for workers and renters over corporate handouts.
Package would build on Democrats’ recent proposals
The HEROES Act incorporates a recent rent relief proposal from Washington Representative Denny Heck, who partnered with Representative Maxine Waters (D-California) and Senator Sherrod Brown (D-Ohio) to secure $100 billion in tenant assistance.
The HEROES Act incorporates a recent rent relief proposal from Washington Representative Denny Heck, who partnered with Representative Maxine Waters (D-California) and Senator Sherrod Brown (D-Ohio) to secure $100 billion in tenant assistance. Low- and middle-income renters struggling to pay rent and utility bills would access these funds through state and local programs.
HUD would develop formulas to specify funding amounts for each state, city, and county, with guaranteed allotments of two percent to tribes and 0.3 percent to territories (excluding Puerto Rico). Anyone making up to 80 percent of area median income (AMI), and unable to pay housing costs due to financial hardships, could apply to their state, county, or local government for assistance. The law would require prioritization of funding for renters making less than 50 percent of AMI. HUD would start dispersing funds within a month and grantees would have another month to make payments directly to housing providers.
The bill would also allocate $500 million in supplemental FY2020 funding for Section 8 project-based assistance as well as supportive housing programs for the elderly, people with disabilities, and people with HIV/AIDS.
Homeowners could also qualify for substantial benefits from the HEROES Act, even though on average they tend to be more economically secure than renters. It would provide $75 billion to fund mortgage, utility, and property tax and insurance relief.
Building on the eviction moratorium put in place by the CARES Act, the new relief proposal would enact a year-long ban on eviction filings over nonpayment of rent for all residential tenants, a bold and unprecedented move for the US. The previous national eviction ban only applied to renters in homes with federally-backed mortgages. Otherwise, currently only a patchwork of individual state and local moratoriums stand in the way of eviction, leaving tenants to slip through the cracks as some landlords have pursued eviction filings even in the midst of the national public health emergency.
For those who own rather than rent, the bill expands to all homeowners the CARES Act foreclosure moratorium which originally applied only to homes with federally-backed mortgages. It also offers mortgage forbearance for up to a year, after which loan servicers must offer payment plans that either tack on missed mortgage payments to the end of the period or extend the payment period (as some banks already offered to do), ensuring that mortgage payments stay at the same rates as before the crisis. Loan servicers could also reduce payments, if the owner can’t pay pre-crisis level payments, though the bill doesn’t mandate this.
The bill doesn’t provide analogous payback flexibility for renters, who could be forced to come up with the full amount of back rent they owe within 30 days of the state of emergency ending or face eviction, unless protected by local or state ordinances. For example, Seattle’s City Council passed legislation this week creating a “default payment plan” for tenants to pay back overdue rent in three to six monthly installments, depending on the amount owed. This builds on a directive from Washington’s governor that landlords must pursue tenant payment plans before considering eviction at the end of the moratorium. Los Angeles and other localities like Beaverton, Multnomah County, and Portland, OR, have all enacted similar measures.
Mirroring the one-time cash assistance payments in the CARES Act, the new bill would provide $1,200 for each taxpayer making less than $75,000 annually (or less than $150,000 for couples). It raises the CARES Act’s $500 per child benefit to $1,200 per child for up to three children. That adds up to a maximum of $6,000 for families of five or more
Because the economic crisis will far outlast one-time payments, Representatives Rashida Tlaib (D-Michigan), Pramila Jayapal (D-Washington), Ro Khanna (D-California), and Tim Ryan (D-Ohio), and Senators Kamala Harris (D-California), Ed Markey (D-Massachusetts), and Bernie Sanders (I-Vermont) had proposed ongoing monthly cash assistance. But House leadership opted against trying to include that more comprehensive (and costly) type of longer-term relief. Without such support, laid-off, furloughed, and other unemployed people will struggle to pay basic living costs as the crisis persists. As my Sightline colleagues Michael Anderson and Margaret Morales have argued, ongoing cash benefits are a good way to provide a social safety net even during normal times.
Democrats face an uphill battle to pass next stimulus package
House Democrats are likely to rally around the HEROES Act. A powerful group of 11 Democrat Representatives, all of whom chair various committees, back the bill.
But the bill is unpopular with Senate Republicans, many of whom remain unconvinced that another stimulus package is even necessary. McConnell denounced funding for state governments, claiming Congress shouldn’t reward states that mismanaged their budgets before the crisis. Another sticking point is McConnell’s insistence that any stimulus bills going forward should include additional COVID-19 liability protections for businesses—a deal breaker for most Democrats.
Democrats faced criticism over their concessions to Republicans in the previous stimulus bill, including a $500 billion corporate bailout with few strings attached (and conditions that the Treasury Department can waive at any time to “protect the interests of the federal government”). The future of the proposal in the Senate is murky at best, but public pressure on the White House to provide Americans more assistance may force a vote. If the bill makes it past the Senate (a big if), it remains to be seen whether progressives can hold the line to prioritize aid to vulnerable workers and renters or funneling tax dollars to corporate behemoths.