Countdown to Prevent Catastrophe: Why We Can’t Let Republicans Delay COVID Relief

We’re running out of time. Millions of jobless Americans are about to lose their safety net — and millions more are on the brink of joining them. But unemployment insurance expiring isn’t the only rapidly approaching financial cliff Americans will face if Senate Republicans delay the American Rescue Plan as Mitch McConnell has already indicated they will.

• Without $1,400 stimulus checks, rent will go unpaid and bills will pile up.
• Without the $50 billion in small business aid, Main Street shops will join the 400,000 businesses already forced to shutter.
• Without the $350 billion in help for states and local governments, frontline healthcare workers like nurses, doctors and EMTS fighting COVID will be laid off like the 1.4 million workers who have already lost their jobs.
• Without $130 billion in aid for schools, classrooms won’t be able to reopen.
• Without the $400 billion to fight COVID and increase vaccine distribution, millions of Americans won’t get their shots.

If Senate Republicans successfully delay passage of the American Rescue Plan, the wheels will fall off the American economy — spelling disaster for families, small businesses, and communities across the country. We can’t afford to let that happen.

Here’s more about what is at stake if Senate Republicans are able to delay or block the American Rescue Plan and it isn’t passed by March 14:

Allowing unemployment insurance to expire on March 14 would send millions into poverty and undermine our economy.

• When expanded benefits expired last summer, nearly 4 million Americans were pushed into poverty.
• Without action from Congress, more than 11 million workers will lose unemployment benefits starting on March 14. That cliff will disproportionately impact Black, Latino, women, and low-wage workers who work in industries hit hardest by the pandemic.
• If this happens, consumer spending, which comprises nearly 70% of GDP, will decline rapidly. Grocery and medical out-of-pocket spending would decline by 15%, and spending would stay low for at least five months.
• Last summer, cutting off expanded unemployment insurance pulled $667 billion of purchasing power out of the U.S. economy in August alone.
• Taking spending money out of consumer’s pockets will further threaten small businesses that are hanging on by a thread — small business revenue is already down 33.1% nationally.
• In the beginning of the pandemic, direct checks and expanded unemployment insurance also helped to protect sectors of the economy that weren’t shut down by the pandemic by giving many laid off workers the funds necessary to keep buying essential goods and paying rent.

The country’s housing crisis will worsen without renters and homeowners assistance.

• We’re facing one of the most severe housing crises in U.S. history. In February, more than 13 million renters reported that they weren’t caught up on rent, and 30-40 million could be at risk of eviction.
• Renters are disproportionately likely to be unemployed — up to 34% of renters are employed in jobs that have been most vulnerable to Covid-related shutdowns. 76% of households that experienced job loss pay more than 30% of their income in rent. Cutting of expanded unemployment benefits would leave these renters in the lurch.
• During the pandemic, 30% of renters have used government aid to pay rent, and another 30% have had to borrow or take out loans to pay.
• Without another round of direct checks and an expansion of unemployment insurance, renters will continue to struggle to pay, and communities will feel the ripple effect. More than half of landlords have no access to a line of credit that could help them if their renters can’t afford to pay.

Failing to provide another round of direct checks will hurt struggling families and the economy.

• Families spent the first round of $1,200 stimulus checks on immediate needs like food, rent, and mortgages. The checks kept 6.3 million people out of poverty in 2020 and even helped drop the poverty rate by more than two points in April and May, when the pandemic was raging.
• The $600 checks included in the December relief package were only enough to buy about two and half weeks of food or pay half of a month’s rent for the average family. With the poverty rate back on the rise, businesses shuttered, and millions unemployed, Americans need another lifeline.
• A third round of $1,400 checks would allow 22.6 million adults to pay their expenses for more than four months without going into more debt or eating into any savings they may still have.
• Putting money in consumers’ pockets helps retailers and small businesses. Past stimulus checks helped spur a 10.8% increase in retail sales and increased consumer spending 20% among consumers who make less than $60,000 a year.

Vaccination efforts will continue to slog without the American Rescue Plan’s funding for a national vaccination program, expanded testing capacity, and 100,000 more public health workers.

• Half of U.S. states worry they will run out of Covid tests, and even more fear they won’t have enough supplies to continue to deliver a vaccine. Experts say vaccine delivery must double to reach most Americans in summer and bring real pandemic relief.
• We need a successful vaccination program to rescue the economy. Economists predict that spending on services and retail will rebound once vaccines are more widely available, which will boost small businesses that are struggling to stay afloat.

Schools across the country won’t have enough funding to reopen safely, keep teachers on the job, and help students recover from an interrupted year without the American Rescue Plan.

• Federal aid for schools has run out — districts have already allocated every dollar received in Covid relief packages. But education costs for school districts and local governments continue to rise, while revenues remain depleted. As a result, education has been one of the hardest-hit sectors during the pandemic.
• Without more federal aid, school districts will not have enough money to accomplish the herculean task of reopening schools safely, rehiring teachers whose jobs were lost during the pandemic, and helping students catch up after a disrupted year.
• School districts will need to increase spending by 21% every year for the next five years — money that districts and local governments simply don’t have.
• 20% of the money available for schools in the American Rescue Plan has to be used to help students catch up academically.
• Reopening schools will boost the economy — 40% of U.S households live with school-aged children. For every teacher who gets vaccinated and every classroom that can safely reopen, 24 sets of parents are able to refocus on their jobs.

With CARES Act funding spent, state and local governments need another round of aid to keep essential workers on the job and get Americans vaccinated.

• State and local governments face potential budget shortfalls of $300 billion through 2022, even after 90% of available Covid relief funds have been allocated.
• This $300 billion figure does not include a host of additional Covid-related costs, like testing and tracing, providing PPE, and emergency mental health and food assistance programs. Nor does it include lost investments from states forced to scale back plans.
• Local governments, which make up 13 percent of all employment, have already had to lay off 1.4 million workers. That’s nearly double the amount of jobs lost after the Great Recession. Millions more jobs are at risk without more federal help.
• Cities alone lost up to $134 billion in revenue, and will lose $360 billion over the next three years — causing 74% of municipalities to start making cuts to things like PPE and essential services in anticipation of additional shortfalls.
• Rising pandemic costs forced 65% of cities to delay or cancel capital expenditures and infrastructure projects, which in turn stifles job growth, slows local economic activity, and inevitably places additional long term fiscal burdens on the federal government.

The Bottom Line: Passing the American Rescue Plan by March 14 would prevent economic disaster by extending unemployment insurance benefits, sending direct aid to struggling families, providing funding to reopen schools, and providing help for state and local governments to keep essential workers on the job and get Americans vaccinated.