People would get another $1,400 in direct payments, in addition to the $600 Congress approved last month, under a sweeping proposal for economic and pandemic relief announced by President-elect Joe Biden Thursday.
Groups such as Make it Work Nevada, which advocates for advancing economic policies that impact women of color, have lauded economic impact payments for getting assistance directly into the hands of struggling individuals.
“There are people who are employed who aren’t making as much money as they were before and so maybe this money puts a little oxygen back into folks’ lungs who have been holding their breath for so long looking for some sort of relief or help from the powers that be,” said Erika Washington, the executive director of Make It Work Nevada.
The $1.9 trillion “American Rescue Plan,’ outlined in a speech Thursday evening, is framed around boosting funding in three areas: COVID-19 response, including a new national vaccine plan and reopening assistance for schools; aid to working families; and help for struggling small businesses and cash-strapped state and local governments.
For millions of Americans, the legislation, if made law, would mean:
- A $1,400 direct payment, supplementing the $600 payment passed by Congress in December’s package, for a total of $2,000;
- Renewal of boosted unemployment benefits, for an additional $400 a week;
- Extended protections against evictions and foreclosures;
- Aid for paying rent and utilities;
- More help with child-care costs;
- A $15-per-hour minimum wage;
- Paid sick and family and medical leave to help those burdened with additional caregiving responsibilities.
While Democrats promised more cash payments ahead of the Georgia runoff election Jan. 5, the proposal has been controversial.
The CARES Act, which passed in March, first allocated $1,200 for individuals making less than $99,000 with families receiving $500 per child.
Carlos Padilla, a pastry baker who worked at the Treasure Island 27 years, was furloughed in March following the economic shutdown. His wife was also laid off and for the first time in years, they faced an uncertain future.
“The bills started piling up, rent was due and we were budgeting what we could as far as food,” he said. “But the (direct payment) did help out with paying with some of the bills.”
Another relief packaged passed in December, and included $600 direct payment.
House Democrats passed legislation to increase the payment to $2,000, which was supported by President Donald Trump, but Republican Senate Majority Mitch McConnell refused to bring the measure up for a vote.
The long gap between relief bills has been a particularly hard burden for households in families in Nevada, Washington said.
“For the most part, I think people feel a little slighted because of the time it has taken between the first stimulus payment and this one is so long,” Washington said. “For the people who were underwater, that $600 just gets gobbled up.”
Since being furloughed, Padilla was able to qualify for unemployment benefits — his wife didn’t — as well as apply for rental assistance and obtain food assistance through the Culinary Union. But there were still times the family fell behind on bills.
As if the long wait between federal relief, and more direct assistance, wasn’t long and scary enough for Padilla, his family still hasn’t received the most recently approved payment. When they do, it will only go so far.
“Honestly, it’s not enough,” he said. “I realize it is something, but it’s not enough. The bills are still piling up.”
Biden’s addition of $1,400 has received some pushback from progressive groups and lawmakers who hoped the payment would be a flat $2,000 rather than adding on to previous package’s $600.
There are also indications some moderate and conservative lawmakers won’t support another round of direct payments.
Republican U.S. Rep. Mark Amodei, who voted against the increase of the $600 direct payment to $2,000, said in a statement in December that the payments weren’t targeted. Amodei’s office declined to comment on further direct payments, saying they wanted a chance to look at the full details of Thursday’s proposal first.
Some Senate Democrats, including West Virginia Sen. Joe Manchin, agreed that direct payments weren’t beneficial, with some arguing money should instead be directed to rental assistance or unemployment benefits.
However, many supporters of direct payments say the money has provided invaluable relief that has kept some afloat.
Giving money directly to people, supporters noted, also bypasses the hassle of filling out time-consuming paperwork and submitting countless applications, part of the process to qualify for rental assistance and unemployment benefits, or waiting in hours long lines for food, which has been seen at food banks in Nevada and across the country.
During the announcement, Biden noted that one in three households, predominately Black and brown, struggled to pay household expenses such as rent and groceries.
“This is going to help out a lot,” said Padilla, who is also optimistic about the increased unemployment benefits.
Expenses, Washington added, are much broader than people realize.
“People have to think about past rent and utilities,” she added. “There’s not money for car payments or when children get sick or just things you need.”
During Nevada’s Economic Forum in October, analysts, referencing a U.S. Census Bureau survey, said three-fourths of Nevadans spent their direct payments from the CARES Act on expenses such as food, utilities and rent.
Another 15.5 percent of people used the money to “mostly to pay off debt.”
But Washington said there are other items that have eaten away at direct payments, such as overdraft fees or the need to repay payday loans.
‘It costs a lot to be poor’
“I know of one person who spent a lot of time on the IRS website trying to redirect their money so it didn’t go to their account, that was already negative,” Washington said. “It’s helpful to pay off a debt, but not when you’re hungry. I would imagine this is a major concern for a lot of folks.”
Some people even had to spend money to cash the previous stimulus checks, Washington said, because the unbanked and underbanked have to resort to check cashing services.
“It costs a lot to be poor,” Washington said. “If people are out there using check cashing places or taking payday loans, they might owe more than $600. At that point, it’s not a relief.”
The Financial Institutions Division, which is part of Nevada’s Department of Business and Industry and offers some consumer protection oversight, doesn’t have data on the amount of people who apply for payday loans.
But Washington said she has heard stories of people who, as a last resort, sought payday loans, which come with upward of 600 percent interest, to make ends meet.
“We aren’t talking about how a lot of us just didn’t know what to expect with this pandemic,” she said. “So when things first started, it might have been a knee jerk reaction to think, ‘let me go borrow this money because this can’t last forever and I’ll be back to work.’”
Many people, she continued, assumed they would be fully employed in a matter of months. Almost a year into the pandemic, that’s not the case.
“If you have taken out these loans in order to pay a bill and here you are now owing that money but still have to pay your bills and you still aren’t financially able to do it, are you paying back the payday loan or are you trying to figure out how you’re going to pay your bills?” she asked.
Even for those who have been able to obtain help, whether it was from rental relief programs or food banks, Washington said people underestimate the need.
“With children being home with schooling, that adds to the grocery bill,” she said. “Children will eat you out of house and home. We always joke about it in the summer that when the kids are there the grocery bill goes up. They are home all day and they are grazing. Trying to keep folks fed is a lot of money; $600 is a grocery bill for a family of four, easy.”
Help for states and schools
In addition to direct payments, the proposal also would send a life raft of aid to state governments, including $350 billion in emergency funding for state and local governments to keep public workers on the job, and $35 billion for small-business financing programs.
States also would receive:
- $20 billion in new money for their vaccine distribution efforts;
- Full federal reimbursement for critical emergency response resources, including deployment of the National Guard;
- Money for more manpower in long-term care facilities experiencing COVID-19 outbreaks;
- Funds for emergency housing;
- Additional cash assistance to low-income families;
- Relief for hard-hit public transit agencies.
As part of his goal to have most of the nation’s schools open within the first 100 days of his administration, Biden also is calling for $130 billion in new money to help schools in their reopening efforts.
The dollars could be used for a variety of steps, including reducing class sizes, modifying classrooms, improving ventilation, providing personal protective equipment, and paying for summer school or other support for students to help make up lost learning time this year.
Another $35 billion would go to higher education institutions, with $5 billion that governors can use to aid students, from early childhood through college, who have been significantly affected by the pandemic.
The coronavirus-related portions of the plan total more than $400 billion, including the Biden administration proposal for a national plan to improve the slow rollout of COVID-19 vaccines.
Biden is calling for the launch of community vaccination centers and mobile vaccination units in hard-to-reach areas, and would boost federal dollars to cover the cost of vaccinating all Medicaid enrollees.
His plan also envisions a massive expansion of testing, including regular testing in places like schools and prisons, and aims to expand the public health workforce by funding 100,000 public health workers.
The wide-ranging package he’s unveiled is nearly the size of the initial $2.2 trillion CARES Act. While the Democratic-controlled House passed several other aid bills, none reached the president’s desk until December, when both chambers approved a $900 billion COVID-19 assistance bill.
At that time, congressional Democrats described the emergency aid package as only a small piece of what was needed to address the ongoing pandemic, with House Speaker Nancy Pelosi calling it “a first step.”
Since then, Democrats have flipped control of the U.S. Senate, though the party won’t officially hold the majority until two new senators from Georgia are sworn in.
Those flipped seats will bring the chamber to a 50-50 split, with Democratic Vice President-elect Kamala Harris able to break ties after she’s sworn in Wednesday.
But passing legislation through the Senate requires 60 votes. That tally means finding Republican support unless Democrats choose to use a budgetary process known as reconciliation, which would allow them to pass certain bills with just 50 Democratic senators.
Beyond the latest economic relief proposal, Make It Work Nevada’s Washington hopes a new administration and Congress will be able to address the long-term damage of the economic crisis from the pandemic.
“People were never thriving, they were just surviving,” she said. “These last few months have shown that.”