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What the federal government needs to do as crisis deepens

By Masao Suzuki |
March 24, 2020
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San José, CA - The U.S. Senate has failed twice to pass a Republican-backed economic stimulus bill worth over a trillion dollars ($1,000,000,000,000). Opposition to the bill comes from its top-down (or in the 1930’s Great Depression term, ‘trickle down’) approach. The bill would provide hundreds of billions of loans to corporations that would not have to be paid back, just as in the loans made to U.S. auto makers after the financial crisis in 2008. It would also give direct cash handouts, with almost half of all households getting half of what middle and higher income households would get.

But rather than bailing out industries in general, along with Trump’s friends in particular, and sending cash to those who are still employed, the economic stimulus of the federal government needs to focus on aiding the sick, the poor and the unemployed.

Put health care first

The economy will not recover until the pandemic is under control. Hospitals need at least $100 billion to pay their bills and hire more staff. The government should annul all hospital and medical debt owed by individuals and repay the providers at the Medicare rate.

Trump should immediately drop all tariffs on medical supplies - masks, gloves, protective clothing and ventilators included - from China. Distribution of the personal protective equipment or PPE should be directed by the government, not by billionaires like Mark Zuckerberg.

Protect and expand the existing safety net

The federal government needs to cover the costs of states paying for all COVID-19 testing and health care costs, including state initiatives to build more hospitals and quarantine infected people. The federal government should cover 100% of all Medicaid payments for all illnesses and move towards a single-payer health system or Medicare-for-all. South Korea, which has been the most successful of all the capitalist countries in containing the virus, has such a system.

The federal government needs to assume 100% of the cost of unemployment insurance benefits instead of the 50/50 split with states now. Unemployment benefits should be extended to self-employed and temporary and part-time workers. Unemployment benefits need to be extended to one year and the job search requirement waived.

The federal government should waive all restrictions on local, state, and federal benefits based on immigration status.

Expand, do not cut, access to SNAP (Supplemental Nutrition Assistance Program). Reimburse state and local government for expanding food programs.

Keep people housed

The federal government should impose a nationwide moratorium on evictions and foreclosures during the emergency. No utility cutoffs (phone, internet, water, sewage, gas, electricity, heating, etc.).

The federal government should reimburse states and local governments for costs of housing the homeless. The federal government should extend interest-free loans to counties who defer their property tax payments.

The federal government must ban all penalties and interest on late loan or rent payments.