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Four Keys to a Successful Coronavirus Rescue

It’s been two weeks since Congress passed and the president signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and in that time we’ve learned that an additional 6.6 million people filed for unemployment benefits, that confirmed coronavirus cases in the U.S. have reached half a million, and that the unemployment rate rose more than a percentage point even before all of the lockdowns began. The CARES Act contained some good things—boosted unemployment benefits, direct cash assistance to most households, some support for small businesses—but it also included a lot of wasted dollars, like more corporate tax cuts, and even some things that could make matters worse in the long run, like the $500 billion corporate slush fund that President Trump has already shown he will attempt to shield from any serious oversight or accountability.

Sadly, it becomes clearer every day that much more will be required to ensure economic stability and security for everyone in the months and years ahead, and to repair the damage of this current economic calamity. As Congress begins to consider additional measures to combat the coronavirus, boost the economy, and lay stronger foundations for the future, there are four key principles it must keep in mind and for which the public should hold members accountable.

First, we have to reinforce the front lines. Nurses, doctors, and other health-care workers are risking their own health and safety each day to fight the virus. Grocery store clerks, farmworkers, and warehouse workers—who are disproportionately low-wage and people of color—allow Americans to follow stay-at-home orders without running out of food and supplies. State and local governments have already stretched their limited resources to the breaking point. It is both a moral and economic imperative to come to their aid. Policymakers need to use every mechanism at their disposal to get the medical professionals the equipment and resources they need to care for those affected by this pandemic. The federal government needs to support and protect and empower the people who keep our food supply lines humming and the grocery and delivery workers who ensure that food ends up in our refrigerators. And it needs to deliver extraordinary assistance to states and localities, which will be forced to dramatically cut services if we fail to help them. During the last Great Recession, misguided, and in many cases disingenuous, concerns about federal debt stood in the way of adequate federal help to states, and the consequence was a slower, more painful recovery. We can’t afford to make that mistake again, when the downturn is sharper and deeper.

Second, in order to repair the economy, we have to help regular people, not corporations and Wall Street. Working people are getting hit the hardest by this disaster and when low- and middle-income people struggle, the economy struggles. Already, we know that over 80 percent of the jobs lost through early March were in lower-wage industries. The United States is the only industrialized nation without guaranteed paid sick leave. Black workers are often the “last hired and first fired.” Many of the same people who are now losing their jobs—especially in communities of color—never fully recovered from the effects of the last great economic crisis. These systemic weaknesses made our economy uniquely vulnerable to a painful shock like the coronavirus pandemic, and the only way to rebuild the economy from the position we’re in is from the ground up. We simply will not see a true recovery if we continue to funnel cash to rich people: as the failure of the Trump tax cuts have shown, more money given to those at the top does not “trickle down” to the people whose work and lives actually make up our economy. Congress must prioritize getting substantial help directly to the people and communities that need it most. 

Third, we have to deliberately build in resiliency for the long run. We can’t wait on pins and needles for Congress to respond every few weeks to new developments. To create confidence that aid won’t stop prematurely and that we haven’t left ourselves just as vulnerable as we were before, Congress must ensure that direct aid to average people continues to flow automatically, without additional congressional action, for as long as this crisis continues. And Congress should fix some of the underlying problems that contributed to making this crisis so severe in the first place—rising inequality, stagnant wages, systematic exclusions and exploitation of people based on race and gender, austerity and underinvestment in the public sector—that have made our economy more vulnerable to shocks. This crisis makes clear that relying on the “free market” or the corporate sector to sustain us through public emergencies or to lay strong enough foundations that we can weather them is, frankly, a dangerous fantasy.

Fourth, Congress must ensure real accountability for the corporate bailouts and protect people from predatory behavior.  One of the most disappointing elements of the CARES Act is the $500 billion bailout of big corporations. Experts have been warning for some time that corporations were taking advantage of looser rules to load up their balance sheets with dangerous levels of debt. And now that the economy has ground to halt, those same corporations have come begging to the public. To make matters worse, there are those who see profit in the pain and uncertainty of this moment. If left unchecked, unscrupulous lenders, scammers, private equity, and corporate raiders will use every trick in the book to make a quick buck off of everyone else, and in the process make a bad situation much worse. Congress must demand real accountability measures with strong enforcement mechanisms for the corporate bailout money that has already been signed into law. That includes additional transparency measures, a legislative override of Trump’s refusal to cooperate with existing oversight, and a general ban on corporations using bailout money to improve their market position at the expense of smaller firms. And they must enact strong protections for workers, consumers, borrowers, and small businesses along with tough repercussions for those who seek to take advantage of them.

As hard as it is to believe, we are still in the early days of the coronavirus crisis. It hurts to say it, but things are likely to get a lot worse before they get much better. The federal government can and should cushion the blow and help us all get to a robust recovery much faster. If the next legislative package follows these four principles, we will have put ourselves in a much stronger position both today and for years to come.

Michael Linden is the Executive Director of the Groundwork Collaborative.