Wed 4/22: “A Peoples’ Bailout” – Part 2.

Action – Call your legislator and demand that funding to put people first be added to this COVID-19 stimulus bill.

The Senate passed a new $484 billion coronavirus relief package yesterday. The bill includes another $310 billion bail out of small- and medium-sized businesses for the PPP program (see corruption issues below in “Deeper Dive”), $60 billion for emergency SMB grants and loans, $75 billion for hospitals and $25 billion to fund a new coronavirus testing program. However, it’s still missing some important values:

• No money to save the US Postal System
• No money for protections to frontline workers.
• No money for secure elections.
• No money for immigrants.
• No money for additional economic support to an out-of-work population
• There was no money for health care for newly unemployed workers.
• No rules to make sure companies maintain payroll.
• No money for states and cities.

Minimal script: I’m calling from [zip code] and I want Rep. [___] to vote “NO” on any bill that neglects to include funding for the US Postal System, secure elections, protections for frontline workers, continuing aid to out-of-work people, access to health care, and rules to make sure companies maintain payroll.

More script if you want it: I specifically want Rep. [___] to include the ABC Act, the Health Care Emergency Guarentee Act, the Vote/Safe Act, Elizabeth Warren’s Election Protection Plan, the Paycheck Guarantee Act,  S. 3565 – Small Business and Consumer Debt Collection Emergency Relief Act  and provide our postal system the cash grants and loans it needs.

Contact
Rep. Julia Brownley: email, (CA-26): DC (202) 225-5811, Oxnard (805) 379-1779, T.O. (805) 379-177
or Rep. Salud Carbajal: email.(CA-24): DC (202) 225-3601, SB (805) 730-1710 SLO (805) 546-8348
Who is my representative/senator?: https://whoismyrepresentative.com

Deeper Dive on the bills that would move us forward

On Monday, we asked you to call your three legislators and tell them to prioritize these five principles:

1. Health is the top priority, for all people, with no exceptions
2. Economic relief must be provided directly to the people
3. Rescue workers and communities, not corporate executives
4. Make a downpayment on a regenerative economy while preventing future crises
5. Protect our democratic process while protecting each other

Here are some bills that may actually do this.

1 – Automatic BOOST to Communities Act. (ABC Act)

Stockton, CA leads the way…this is a great video.

Congresswomen Rashida Tlaib (MI-13) and Pramila Jayapal (WA-7) introduced the Automatic BOOST to Communities (ABC) Act, legislation to immediately provide a $2,000 payment using BOOST debit cards to every person in America as critical reliefduring the COVID-19 crisis, followed by $1,000 recurring monthly payments for one year after the end of the crisis to help our country and families recover. The ABC Act would be funded directly from the Treasury with no additional debt issued by minting two $1 trillion coins, and additional coins as necessary.

According to polling released by Data for Progress and the Justice Collaborative Institute, there is strong bipartisan support for payments on a recurring basis, with 66% of the public preferring recurring payments of $2,000 until a year after the President declares an end to the federal state of emergency. The poll also revealed that a majority of bipartisan voters, support financing recurring UBI payments by instructing the U.S. Treasury to issue two trillion dollars of new currency.

Would people go crazy and blow it on nonsensical stuff? That’s not what happened in Stockton, CA, which selected 125 people to try out $500 payments for 18 months. “Of the money that could be tracked, nearly 40% went to food and almost a quarter was spent at clothing, home goods or discount stores. Utilities and car maintenance both made up about 10% of the spending, and the rest went to medical care, insurance, recreation and other miscellaneous services.”

2 – “Health Care Emergency Guarantee Act.”

The number of Americans without health insurance continues to rise rapidly due to ongoing mass layoffs across the nation and the Trump administration is refusing to reopen the federal Affordable Care Act insurance markets on healthcare.gov for a special enrollment period during the coronavirus epidemic. (11 states (CA, CO, CT, MD, MA, MN, NV, NY, RI, VT, WA) and DC have opened their own exchanges for a special enrollment period, but other states depend on the federal marketplace or have neglected to take this step.) However, unlike our great divider of a president, we don’t believe that access to health care should depend on which state you live in.

On Friday, Sen. Bernie Sanders and Rep. Pramila Jayapal  introduced emergency legislation, the Health Care Emergency Guarentee Act, that would empower Medicare to cover all healthcare costs for the uninsured and all out-of-pocket expenses for those with insurance for the duration of the coronavirus crisis.

An analysis by Health Management Associates earlier this month warned that the total number of uninsured Americans could rise to 40 million within the next several months if U.S. job losses continue at the current rate.

3 – “Vote/Safe” Act/ “Election Protection Plan”

Sen. Harris’ Vote/Safe bill is endorsed by the American Civil Liberties Union (ACLU), NALEO Educational Fund, National Disability Rights Network, Native American Rights Fund, Service Employees International Union (SEIU), and Asian Americans Advancing Justice (AAJC). The VoteSafe Act of 2020 (Bill text – here, one pager – here).

This has many similarities to Sen. Elizabeth Warren’s Election Protection Plan  and they should be folded in together.

• (Harris) Authorize $5 billion to expand vote-by-mail and early voting and to improve the safety and accessibility of polling places during the COVID-19 pandemic. billion) (Warren) $4 billion.
• (Harris) (Warren) Require states to permit no-excuse mail-in absentee voting.
• (Harris) Require states to maintain an early voting period of at least 20 days. (Warren) 30 days.
• (Harris) (Warren) Provide grants for states to improve the safety, efficiency, and reliability of polling places in the following ways:
  • Ensuring that elections are accessible to individuals with disabilities.
  • Ensuring adequate protections for language minority voters.
  • Ensuring voting access for American Indian, Alaska Native, and rural voters.
  • Implementing and promoting curbside voting.
  • Implementing and meeting a maximum wait time standard or publishing current wait times for voters.
  • Providing for the training and recruitment of poll workers.
  • Improving access to voter registration.
• (Warren) Restoring voter rolls and accelerating opportunities for online registration.
• (Warren) Require all states to mail every registered voter a ballot with pre-paid postage and a self-sealing envelope.
• (Warren) Allow eligible individuals to vote with a sworn statement of identity instead of a voter ID, and permit registered voters to vote at any polling place within their district.
• (Warren) Congress must shore up USPS so that as many Americans as possible can vote from home. Some voters lack access to mail service or reliable broadband,
• (Warren) Protect the integrity of our elections during this time of crisis by countering disinformation and bolstering election security
• (Warren) Every poll worker should be compensated for their work, and Congress should guarantee that every poll worker receives hazard pay too.

4 – S. 3565 – Small Business and Consumer Debt Collection Emergency Relief Act of 2020 

Sen. Sherrod Brown (D-OH) introduced this bill to to amend the “Fair Debt Collection Practices Act” to give additional protection to consumers and small businesses from debt collection during a major disaster or emergency. Among other issues, it would:

• Keep an eye on credit reporting: Because many Americans are likely to miss some payments as a result of the coronavirus crisis, the senators are calling on Congress to make sure their credit reports don’t take an unfair hit. “Nobody should be denied credit for a new home or car, prevented from renting an apartment, or fail a security clearance for a new job because they ran into trouble making payments during the coronavirus pandemic,” Warren and Brown write. “If we want consumers to stimulate the economy and speed up a recovery, we need to give them the tools to do so.”
• Protect student borrowers: Warren and Brown are calling for Congress to broadly cancel student loan debt as a way to help stimulate the economy, the idea being if people aren’t drowning in the collective $1.6 trillion in debt they are now, they’ll be able to spend that money elsewhere. They also want to extend CARES Act protections to private student loan borrowers.
• Bring in the CFPB: It is the job of the CFPB, the government agency Warren conceived and got off the ground in response to the last economic crisis, to act as a guardian and steward for American consumers. And beyond what Congress can do, the senators are calling for the bureau to step up. The bureau was created so that consumers “would not be left at the mercy of giant financial institutions” and would have someone to look out for them, but instead, they worry Trump-picked leadership has weakened protections. Congress has the tools to oversee what’s going on at the CFPB, and it should use them. (Vox)

5 – House “Paycheck Guarantee Act”/Senate “Paycheck Security” Act.

The PPP “Paycheck Protection Act” has some serious flaws…First, it continues for just 8 weeks. If this shutdown lasts longer, will we keep using this expensive, fraud-ridden and inefficient system to distribute money to employers? How long can we afford handing millions to millionaires?

“Companies with thousands of employees, past penalties from government investigations and risks of financial failure even before the coronavirus walloped the economy were among those receiving millions of dollars from a relief fund that Congress created to help small businesses through the crisis, an Associated Press investigation found.” (AP News)

The Swamp in the PPP: We’re learning the hard way that the Small Business Administration (SBA) has a flexible definition of “small business – They’ve allowed restaurant and hotel  chains with thousands of employees to qualify if there are fewer than 500 employees “per location” and mysteriously allow higher levels for coal companies. The rules are so lax, just swearing that “current economic uncertainty makes this loan request necessary to support the ongoing operations,” that hedge funds and high-tech companies untouched by the pandemic are applied for funds. 71 publicly traded companies, including restaurant and hotel chains scooped up millions intended for small firms.

Adding on to the big business vibe, the Payroll Protection Program (PPP), which ran out of their first batch of money on last Thursday, relies on private banks to actually make the loans. Some banks, overwhelmed and nervous about liability, either didn’t participate, leaving their business clients scrambling, or blatantly favored their existing clients.  (warning…this intensely personal take on getting a PPP loan has NSFW language).

Banks that did participate will be richly rewarded. It was not just protecting their clients who owe them the most money. “Banks get significant processing fees: 5 percent on loans up to $350,000, 3 percent on loans larger than that up to $2 million, and 1 percent on loans between $2 million and $10 million, the limit of the program. It’s like an hour’s work for a junior banker to process these loans and the bank can get between $10,000 and $100,000. And the fully guaranteed loans can be sold directly into the secondary market, so banks don’t have to wait to recoup. It’s about as free as money gets.” (Prospect.org)

Participating banks are estimated to receive approximately $10 billion of taxpayer money, in the form of these high margin fees in one financial quarter. This is a significant chunk of change for an already wealthy industry which, as a whole typically earns $60 billion per quarter. 

After this pandemic slows down, we’d support an act requiring transparency of any firm that took over $250,000. Did they actually retain all their employees? Were they actually in need? If not, would they refund the money they took from taxpayers?

(Just a note here: $10 billion will go to banks in one financial quarter just for being banks. We’re asking for half that to support a nation’s election system.)

Even if the banks and large firms weren’t taking advantage of the pandemic, the PPP doesn’t work for everyone: It only covers 8 weeks of costs and 75% of loans must go to payroll costs as a condition of forgiveness—putting businesses with high fixed costs, such as rent or utilities, and relatively lower payroll costs, such as restaurants, at a disadvantage.

Let’s try again when the 8 weeks are up.

Both the The Paycheck Guarantee Act, introduced by Rep. Pramila Jayapal (D-WA) (white paper here, one-page summary here) and the “Paycheck Security” Act, introduced by Sen. Doug. Jones, (white paper here) would use the Treasury Department to get support to workers and employers as quickly as possible, using existing payroll tax infrastructure to facilitate delivery of payments, bypassing the expensive middleman-bank.

• Purpose
  • (House) Encourage employers to rehire recently-laid off or furloughed workers by covering payroll retroactively to the start of the crisis. Keep workers attached to the labor market and businesses ready to reopen, speeding up the economic recovery
  • (Senate) “Congress recently passed over $25 billion in grants to the airlines, so that every worker in that industry will continue to receive their full paycheck and benefits through September 30th. We need a similar program to cover workers in America whose job has been negatively impacted by the health and economic crisis, and make it retroactive to when the pandemic began. This approach has been implemented successfully in several countries, including Germany, France, Norway, Denmark, the U.K.”
• Eligibility
  • (House) Covers employers of any size to maintain 100% of base payroll and benefits over the next three months. This would include self-employed individuals and independent contractors, as well as states and cities.
  • (Senate) All employers who have suffered a month-over-month drop in revenues of at least 20 percent will be eligible to receive grants covering a portion of payroll and benefits for at least the next six months. 
    • Employers and non-profits of all sizes will be eligible if they can verify revenue losses and don’t otherwise have more than 18 months of their payroll available in cash.
    • Businesses that have received a Paycheck Protection Program loan or an Economic Injury Disaster Loan, or have otherwise accessed the Federal Reserve 13(3) facilities, will be ineligible, unless they exhaust these other programs or use the Payroll Security Program grant to pay back their existing loans.
• Wages/benefits:
  • (House) Cover 100% of wages for workers earning salaries up to $100,000 to ensure that employers keep workers paid and out of the unemployment line, plus benefits like healthcare.
  • (Senate) Grants will cover salaries and wages up to $90,000 for each furloughed or laid off employee, plus benefits
• Additional costs:
  • (House) Cover essential business expenses like rent, to ensure that businesses don’t shutter completely and can re-open when the pandemic ends
  • (Senate) Covers up to an additional 20 percent of revenues to cover fixed operating costs such as rent, utilities, insurance policies, and maintenance.
• Conditions to receiving funds. 
  • (House) Recipients must maintain full employment and base payroll and benefits for the duration of the national health emergency and for a period of at least 6 afterwards. 
  • (Senate) Not cutting the pay and benefits of rank-and-file workers;
  • (House) Employers who no longer need the same level of employment after pandemic subsides will be required to pay back a proportion of the paycheck guarantee as a no-interest or low-interest loan for each employee that is let go.
  • (Senate) Offer to bring back workers laid off since February 1st the opportunity to go back to participate in the program at prior level of compensation;
  • (House)(Senate) Recipients would be prohibited from engaging in stock buybacks, increasing dividends, or paying executive bonuses while they are receiving relief and for three years thereafter unless the support received is fully repaid to the Treasury. 
  • (Senate) Capping CEO compensation at 50 times the median wage of their workforce.
  • (House) (Senate)Collective bargaining agreements to remain in place and shall not be reopened or renegotiated pursuant to this relief program, unless agreed to by both parties. 
  • (House) Further, recipients shall not engage in or hire any entities to conduct union avoidance activities.
  • (House) Public companies and private companies with revenues above $500 million that receive paycheck guarantee funds must set aside at least one seat on the board of directors for arepresentative elected by workers. Any company that files for Chapter 11 bankruptcy after receiving payroll grants will be subject to all of the provisions of the Protecting Employees and Retirees in Bankruptcies Act, S. 2518