The pandemic COVID-19 has led to a global public health crisis, and the virus continues to rapidly spread. Human health is of the utmost importance, but the coronavirus has also plunged the world into an economic recession that is likely to last for the rest of 2020 and potentially much longer. People are out of work, businesses may not survive the disruption and the stock market has been volatile. Unfortunately, in this situation, solutions that promote public health and the health of the economy are at odds with one another. Lawmakers are actively looking to address both public health and the economy's health by introducing legislation to manage the pandemic and soften the blow of economic problems created by COVID-19.
Legislative actions so far
In early March, policymakers passed an initiative to provide $8.3 billion in emergency funding so public health agencies can learn more about the coronavirus and develop a vaccine for the illness. As a part of this bill, Congress appropriated $7.8 billion in discretionary funding to health agencies on the federal, state and local levels, and another $500 million to boost Medicare.
Congress enacted the Families First Coronavirus Response Act in mid-March and the president signed it into law. The bill loosens restrictions on unemployment benefits, increases Medicaid and food-security spending, and enables government health programs to provide free coronavirus test coverage. This act also requires certain employers to provide paid sick leave and expands tax credits to employers to help absorb this cost.
At the end of March, Congress tased another, larger piece of legislation: the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This $2 trillion relief bill is the largest emergency response bill in history and targets 4 areas: big businesses and financial industry, small businesses, households, and state and local governments.
The following infographic breaks down the relief bill and explains the major funding area:
What's in the CARES Act? Here's a Summary, courtesy of Peter G. Peterson Foundation
How these policies can help the US 2020 COVID-19 recession
These new pieces of legislation are meant to mitigate an economic recession.
Limit the extent of the public health crisis by providing the funding to test, protect and supply first responders and medical facilities.
Deliver funding to states to reduce the pressure on Medicaid funding and to avoid negative effects on other important areas such as public safety or education.
Provide assistance to enable agencies to help people who need food or medical assistance and ensure they are not denied access to unemployment or SNAP benefits.
Offer assistance to small businesses so they can borrow the necessary funds to stay operational beyond the current COVID-19 disruptions - people will need jobs to return to.
Distribute money to Americans who need it while under quarantine, sheltering in place or sick. This also keeps people out of public spaces to help contain the spread of COVID-19.
Providing funding can help cushion the shock and provide stabilization to the economy, which is seeing the beginnings of a major economic recession. The longer people are out of work and businesses to stay inoperable (or experience a significant loss in revenue), the more severe the impact on both the national and local economies could be.
It is not yet clear to what extent these relief packages will further damage the fiscal outlook of the U.S. government. What we do know is that, while this crisis persists, millions of people and businesses need economic assistance. In addition to immediate relief, sustainable long-term solutions are needed.
Want to learn more about fiscal policy? Take out Fiscal Trivia Quiz and share your results with us on social media! Up to Us is a leadership program that focuses on ways college students can take action to help the U.S. achieve a fiscally sound future. To learn more, visit www.itsuptous.org.