A Middle-ground Approach to COVID Relief

At the time of this article’s writing, we are seeing a stalemate in Congress concerning the second round of COVID relief between the Democrat and Republican parties.

While neither of these parties appears to be interested in giving up much ground during this final sprint to the November elections, a middle-ground approach is possible that would provide significant support to citizens without going too far in either direction.

This article isn’t intended to be a source of truth. It’s casual backseat driving from a busy father with no formal education in economics.

Collections Moratorium

Let’s start with the simplest and most obvious solution. Let’s put a stopper on Federal student loan payments. After all, many schools aren’t even open at-capacity, to begin with. Many workers can’t put their degrees to use in the workplace, either.

Secondly, there should be a break in evictions for any corporate renters. Lives are at risk when people are living in shelters. We’re also waiting for the government to come to its senses about how to support the population, and that delay should not result in loss of homes for people that are doing their best to make ends meet in an impossible situation.

Also, for a period of two years, the IRS should not be able to lien or repossess someone’s home. Payment arrangements can be required, but there shouldn’t be any risk of taxes from a working year resulting in homelessness due to COVID-induced unemployment.

Business Loans

Small businesses are collapsing at a breakneck pace. Restaurants especially are seeing their doors closed permanently because there simply aren’t enough customers to keep up with operating expenses.

Loans are one way the Federal government can certainly help. Loans eventually get repaid, and they’re an investment on the economy that results in jobs and future income through taxes.

These loans should continue to be interest-free or low-interest in nature. However, they must be repaid. A five-year window for each new loan’s repayment is appropriate, and gives us time.

Loans should also be conditional. You must provide a plan to keep your employees on the payroll whether they are working actively or under quarantine to prevent the spread of COVID-19.

If you have 40 employees when you apply for the loan, and you receive the loan, you shouldn’t be able to lay them off and keep the money interest-free.

Stimulus Checks

The $1,200.00 stimulus checks issued during the first round of COVID relief cost the country roughly $290 billion. That’s a lot of money. It’s 10 border walls or 13 years of NASA ‘s budget.

The second round of stimulus, if left entirely the same, would equate to 26 years of NASA’s budget. That’s an incredibly high number. The combined expenditures make up 1/6 of the total revenue made by the IRS in a single year.

There are solid arguments to be made for a universal basic income, or a regular $1,000 check to every American citizen each month, but these here-and-there checks coming simply to make up for what is the government’s clear failure to act responsibly amounts to little more than a campaign gimmick.

President Trump may have failed to lead America to a flattened curve as nearly every other advanced country in the world had, but his name was printed on a check for $1,200.

Would I give another stimulus check a go? Yes, but it needs to serve as a cutoff point for other types of support in the package. With no additional income in the budget to cover the costs, the expense simply brings us closer to defaulting on loans as a nation and facing a very severe economic collapse… eventually.

Payroll Tax Break

The GOP is pushing for a break in payroll taxes for the duration of the year. This is one of the solutions President Trump intends to push through using an executive order. Whether or not he has that authority is beyond my understanding.

Payroll taxes fund the Social Security system. It’s how our senior citizens that don’t have access to a well-funded 401k or pension plan make their bill payments. Cutting this funding means either going into debt further to fund it through other means or simply not paying seniors.

In order for a payroll tax break to work, the replacement funding has to be set first. We can’t simply stop receiving that income with no plan to satisfy the expenses it normally covers.

Let’s be honest, the idea of a payroll tax break is to push employers to hire more workers and get people off of unemployment. It’s the answer to the $600/week unemployment benefits boost. The GOP wants to see employees at offices, ready to “rock and roll,” as President Trump said.

This doesn’t help end the deadly pandemic any sooner. If anything, it’s a policy that threatens to extend it as workers continue to catch and spread COVID at the workplace where masks and social distancing isn’t absolutely possible.

Do I support this plan? I might, actually. If the GOP can explain exactly how much of a hole this leaves in our national Social Security budget, and how it will be covered, it may be a decent middle-ground solution when coupled with a more economical unemployment benefits boost.

Unemployment Benefits

Unemployed workers (approximately 33 million of them) are facing a particularly difficult situation right now.

Many of them were filling roles at their jobs that are considered unskilled labor (not my term, it’s just how those roles are defined). Others have specialized training and skills, however, their roles exist in industries most affected by COVID.

Hospitality workers, support staff for venues, social gathering places, etc. are often best qualified to work in roles that are suited to environments that require foot traffic to operate.

Hotels, restaurants, music venues, theaters, etc. are all but shut down. A recent Yelp survey found that nearly 53% of restaurants are listed as closed permanently in the wake of the pandemic.

Unemployment benefits as a whole are intended to make up a portion of a worker’s normal wages between jobs. When no job opportunities are available (by design) in the industries those workers are best suited for, things become especially difficult.

An additional benefit of $600 per week more than doubles the average unemployment income of these workers. In some cases, workers make more on unemployment than they would if they were actually working.

If the payroll tax cut goes through, a compromised benefit of $200-300 would be more palatable by the GOP and therefor likely to pass.

Would this be great news for unemployed service workers? No. It would, however, increase the odds that job openings that do allow for social distancing in industries that are less affected by COVID could open up.

COVID-specific Costs (Separate Package)

Let’s not forget how important stimulus is to the healthcare industry right now. If hospitals become overwhelmed, more people die. That’s why New York City and Italy faced so many deaths. Hospitals simply couldn’t provide enough support to keep up with the sheer demand that COVID illnesses created.

COVID-19 is an emergency situation. It should be treated like any other major natural disaster. When hurricanes devastate cities and destroy lives, the government steps in and provides support to help communities recover.

At times, that support includes medical necessities, helicopters, boats, manpower, and financial aid.

The United States needs to have a strong stockpile of medical equipment necessary to provide appropriate support to sick citizens. To determine what that type of support should be, each state should submit a proposal that outlines what their current capacity is, what they have to offer other communities if need be (excess equipment), and what the Federal government could help with.

These proposals should then be discussed by members of congress and compiled into a single, separate stimulus package. This allows essential relief specific to saving lives to be apart from the political black hole that unemployment benefits and payroll taxes fall into.

What do we need to save lives? Let’s do that. That most immediately important.

What do we need to lessen the financial suffering of our citizens? Let’s tackle that next.

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Ryan Matthew Pierson