In recent weeks, nearly every state in the country has begun the process of lifting stay-at-home orders and loosening public health restrictions on business and leisure, allowing some workers to return to their jobs and consumers to resume some economic activity.
Reopening the economy is a necessity full of promise and peril. By and large, Americans understand the health imperative behind restrictions put in place to slow the spread of COVID-19. At the same time, they are deeply concerned about their wellbeing and financial future in a hindered economy with historically high unemployment.
It has long been known that economic deprivation poses profound risks to individual and community health. As federal, state, and local officials continue the process of reopening, they must carefully navigate the dual public health imperatives of overcoming COVID-19 and supporting economic recovery. With coordinated leadership anchored in public health evidence, our country’s leaders can provide confidence for renewed economic activity. By enabling a strong economic recovery, they can ensure that American workers have the resources and resilience needed to provide for their families despite the difficult times ahead for us all.
In seeking to support and sustain economic recovery, Americans and their elected leaders face a number of critical challenges. The Bipartisan Policy Center is committed to exploring these challenges and putting forth actionable solutions. In our new initiative, Reopening America: Protecting Public Health and Rebuilding Economic Strength, BPC will marshal in-house experts, veteran subject matter authorities, and public opinion surveys to chart a course forward which speaks to the realities of working Americans of all political persuasions, geographies, and ages.
The series will begin with two events, both this week:
- Wednesday, May 20, at 11 a.m. ET: Is There a Bipartisan Solution for Liability Concerns? will be a web event exploring the challenges businesses face in reopening and the merit of proposals for federal policy changes intended to protect companies from some COVID-19-related lawsuits.
- Thursday, May 21, at 11 a.m. ET: The $600 (Unemployment Insurance) Question will be a web event exploring the impact of recent expansions to the unemployment insurance system and proposals to enable a safe return to work.
Below are the five key challenges which will be the focus of the series.
While the level of COVID-19 testing has improved in recent weeks, testing capacity remains the largest challenge to ensuring public health, and in turn economic recovery, in the United States. As BPC emphasized in an April report on lessons learned from other countries, “loosening social distancing interventions is incumbent upon increased testing.”
Among public health experts, there is general consensus that continued economic reopening will require a more robust COVID-19 testing infrastructure which can promptly identify and isolate cases. It will also require a public health system that is well-funded, well-supported, and able to lead contact tracing efforts, and a health care system with sufficient capacity and available personal protective equipment and critical medical supplies.
To determine when to loosen restrictions on economic and social activity, BPC has recommended that states, with the assistance of the federal government, develop and utilize a uniform and consistent set of quantitative metrics that includes indicators of epidemic spread, health care capacity, and public health. The trajectory of such metrics towards improvement is likely to be limited until the United States has a more robust testing infrastructure in place.
BPC will continue to monitor the country’s progress in developing sufficient COVID-19 testing capacity—as well as the trajectory of test outcomes and its implications for public health and the economy. We will also continue to develop plans to bolster the country’s public health infrastructure and the availability of health care services.
Child care is essential to our economy, and it must be treated as such by policymakers. Even before the COVID-19 economic fallout, BPC has emphasized that lack of access to affordable and reliable child care is a barrier keeping Americans from engaging in the labor market. Now, as economic restrictions are lifted and parents return to the workplace, it is more important than ever that families have access to safe and affordable care for their children.
However, three in five child care programs are currently closed for the foreseeable future, and nearly two-thirds of parents in need of child care are having difficulty accessing it, according to an April survey from BPC and Morning Consult. Just 8% of parents report experiencing no change in the availability of their child care provider, while only 10% of larger child care centers and 16% of smaller centers report remaining open with no changes to scheduling and availability.
Moving forward, policymakers must take steps to reinforce the child care sector’s essential role in our nation’s recovery. BPC will continue to explore the impact of COVID-19 on the child care market, evaluate the implementation of recent federal legislation which supports working families and child care providers, and develop policy proposals to support the child care market.
Due to social distancing measures and business restrictions implemented to slow the spread of COVID-19, an unprecedented number of Americans have lost jobs. In the past two months, 36 million have applied for unemployment insurance, and the jobless rate now stands at or above 14.7%.
As the labor market has plunged into free fall, state unemployment insurance systems have struggled to respond. To provide additional support, the federal government approved a historic expansion in the scope and size of unemployment benefits, boosting the weekly payout by $600 per recipient and expanding eligibility to include self-employed workers, “gig” workers, and workers with caregiving responsibilities caused by COVID-19.
This expansion has played an important role in stabilizing families’ consumption through the downturn, lessening financial pain and extending a lifeline to the economy. But, as the economy begins to reopen, there is growing concern that these benefits—which offer many workers more pay than their jobs did—will disincentivize labor market reentry and in turn slow down the recovery. One in three small business owners say expanded unemployment insurance eligibility and benefits have made it more difficult to retain their employees, and two in five report that losing workers due to new unemployment insurance provisions has been “very difficult” or “somewhat difficult” for their business, according to an April survey conducted by BPC and Morning Consult.
These expansions are set to expire in late July. As that deadline approaches, elected leaders must consider how to transform unemployment insurance from a system that deliberately encourages workers to stay off the job to prevent the spread of a pandemic into one that incentivizes a safe return to work. They must also consider reforms to the administration of unemployment insurance which will allow the program to better respond to future economic downturns. In the coming weeks and months, BPC will play an active role in exploring these key challenges and developing policy proposals that promote work and contribute to economic recovery.
As federal lawmakers developed policy responses to COVID-19, BPC’s Saving Small Business series highlighted the unique challenges facing the small companies who together employ a majority of American private sector workers. Now, as business restrictions are lifted, employers face a new set of challenges that will determine whether they are able to safely resume operations. BPC’s recent survey of small business owners found that while a majority are planning to reopen, as many as a third are uncertain about their ability to do so. Other assessments are even less optimistic.
Adding to the uncertainty is the prospect that businesses of all sizes will face lawsuits from customers and employees who may have been exposed to COVID-19 on their premises. Even companies that are following health and safety guidance from federal authorities and state public health agencies could bear significant legal risks that slow or stall economic recovery. In recent weeks, governors in several states, including New York, Illinois, and North Carolina, have taken action to shield certain essential services from liability, and 21 state attorneys general recently sent a letter to Senate leaders urging federal action.
Elected officials must continue to consider timely and targeted liability protections for businesses. At the same time, they must ensure that reckless and irresponsible actors are held accountable for decisions that put workers, consumers, and the public at risk. BPC will continue to create a space for discussion and deliberation which is mindful of, but not captive to, the long history of debate on this subject.
Throughout American history, moments of economic crisis have laid bare shortcomings in systems intended to ensure stability and security. Just as the Great Depression motivated the creation of a more robust social safety net, and as the Great Recession prompted more prudent banking regulations, the economic fallout caused by COVID-19 must challenge us to strengthen the financial security and resiliency of working families.
The truth is that, even before COVID-19, four in 10 American families were not prepared to cover an unexpected $400 expense without triggering a shockwave to their household finances, and even middle class families struggled to cover the costs of raising kids and saving for retirement. These same families have been the hardest-hit by layoffs and pay cuts caused by COVID-19.
As we emerge from the pandemic, we must consider what more can be done to support working families through both good times and difficult times. Thankfully, there is no shortage of such proposals which have earned authentic bipartisan support. Here are just three, which together can form a much-needed financial foundation for households while encouraging and rewarding work.
First, elected leaders should consider plans to shore up family incomes by boosting the earned income tax credit, child tax credit, and child and dependent care tax credit. In their current forms, these tax credits lift tens of millions of Americans out of poverty each year. Lawmakers must pursue the opportunity to expand these credits on a bipartisan basis, providing more support to families while encouraging parents to enter back into the labor force. At the same time, lawmakers should explore proposals to enhance program administration and reduce improper payments—both of which have long served as obstacles to meaningful bipartisan reform.
Second, elected leaders must consider enacting a permanent federal paid family leave program. As has become even clearer in the midst of COVID-19, a great many of parents struggle to balance the responsibilities of work with the responsibilities of caregiving. To enable both, Congress and the president created an emergency temporary paid sick and paid family leave program in March. While implementation of this program has not been perfect, the motivation behind it deserves continued support.
Third, elected leaders must explore proposals to boost families’ emergency savings. Just as the country is certain to emerge from this pandemic with the imperative to build a larger stockpile of critical health care supplies, it must emerge from the pandemic’s economic fallout with the imperative to build families’ financial stockpiles of cash for unexpected events. As COVID-19 hit, fewer than half of American households had saved enough to cover three months of expenses; as a result, in recent weeks, many have been forced to draw down retirement savings to cover necessary items like groceries. Bipartisan legislation before Congress would reduce the costs and obstacles associated with creating emergency savings accounts and enable employers and workers to automatically deposit a small amount of each paycheck into these accounts. Lawmakers must also explore options to ensure that emergency savings accounts follow workers when they change jobs, and create a system allowing workers with multiple employers to establish savings plans that match the realities of our modern economy.