Our nation is facing an unprecedented crisis with wide ranging consequences. It is imperative that Congress take the lead as we work through this crisis, putting the needs of the most acutely affected populations — white, Black, and brown working people — at the forefront of all further relief efforts.
In the last economic crisis, banks demanded government support not available to ordinary businesses or workers, and received huge bailouts that helped concentrate wealth, while working people and especially communities of color, were left struggling with an unprecedented loss of wealth. Early in this crisis, we are again seeing working people, and especially people of color, bear the brunt of the economic and health fallout, while large corporations and Wall Street reap the lion’s share of relief funds.
Relief legislation during and after the crisis must focus on protecting white, Black, and brown working people, and prevent the accumulation of more wealth in the hands of the few. We simply have no excuse not to get the bailout right this time.
Take on Wall Street’s Priorities for COVID-19 Legislation
Put Working People First
The FFCRA and the CARES Act provided much needed relief for working families, but the package does not address critical aspects of the coronavirus crisis—issues that threaten the lives of working people. Working people are being infected at work and dying to save our neighbors from the coronavirus, and any discussion of legislation or policy must start by addressing this. Some critical measures that coalition members have advocated for and that we support include, but are not limited to:
- Inclusion: Close loopholes in the Families First Coronavirus Response Act that omit tens of millions of workers from the Act’s grant of emergency leave
- PPE: Rapidly escalate production of Personal Protective Equipment and patient treatment equipment like ventilators, masks, etc.
- Exposure Control Plans: Enact an Emergency Temporary Standard to require health care and other critical employers to develop comprehensive infectious disease exposure control plans.
- Premium Pay: Institute premium pay for essential workers, applied to all essential workers, rather than select groups
- Worker Protections: Strengthen worker protections for companies receiving federal aid to ensure that they keep workers employed and respect worker rights and safety
Prevent Wealth Redistribution to the 1% in a time of national crisis
The CARES Act takes minor steps to limit stock buybacks and executive compensation, however, the bill language does not adequately stop companies from gifting bailout funds to their executives and shareholders through excessive compensation packages and stock buybacks. Moreover, the CARES Act contains two costly provisions two costly business tax breaks directly benefiting the 1% which must be repealed To curb inequality and protect the long term health of our economy, we need to add the following:
- Stock Buybacks: Ban stock buybacks and dividend payments by companies receiving bailout funds. In the CARES Act, Congress gave Sec. Mnuchin discretion to ban stock buybacks or dividends for airlines receiving bailout funds, which does not go nearly far enough. Buybacks should be banned outright for any company receiving bailout funds.
- Executive Compensation: Cap executive compensation for all companies receiving government support. New legislation must require all companies receiving any federal financial assistance or economic recovery contracts to cap total executive compensation at no more than 50 times the median worker compensation and limit payouts to departing executives to the lower of 50 times median worker compensation or 2019 compensation.
- Bailout Accountability: Require half of pay that exceeds $1 million for employees at each aided company to fund a pool that will be used to pay fines in the case the firm is found guilty of misuse of aid or other misconduct. (Otherwise, taxpayers will be paying company fines for abuse of taxpayer monies.)
- Private Equity: Make sure private equity firms aren’t able to grab money meant for small businesses. If PE-owned businesses are allowed access to bailout programs, they should include conditions to prevent income streams from being diverted to wealthy PE executives, rather than supporting employment and customer service at portfolio firms. Congress should also act to restrict irresponsible profiteering at any private equity owned health care firm receiving any federal funds during this crisis.
- Tax Breaks for Corporations & the Super Rich: Repeal both provisions in the CARES Act expanding net operating loss (NOL) tax deductions. The first allows corporations and pass-through businesses to carry back losses not only from this year, but also the previous two years when the economy was healthy. The second more costly tax break gives the wealthiest pass-through business owners the right to apply an unlimited amount of business losses against their non-business income.The Joint Committee on Taxation (JCT) estimates this tax break alone will cost $170 billion, with 82% of the benefits going to those making $1 million or more.
Protect the U.S. Post Office
As a result of the economic impacts of the pandemic, the Postal Service is expecting revenue declines of as much as 50 percent. Mail volumes are already down by more than 30%, even as the need for universal delivery services of medicine, supplies and other essential goods The Postal Service and the broader mailing industry needs the same level of assistance provided other hard-hit industries like hospitality and civil aviation.
Congress must ensure continuity of postal services at a time when the USPS is more vital than ever to ensure home delivery of essential goods and federal stimulus checks and to facilitate mail-in voting.
To protect the Post Office, Congress must pass:
- Cash relief for USPS: An initial $25 billion “public service appropriation” and ongoing financial support through FY 2021 to ensure continuity of operations for pandemic response, economic recovery and provision of vote-by-mail
- Remove Unworkable Conditionality: Remove Treasury’s ability to force draconian cuts to USPS as a condition of lending.
- Distribute Stimulus Payments via USPS/Fed Accounts: Stimulus cash payments to households should be distributed through a combination of accounts with the Federal Reserve (“Fed Accounts”) and, where a regional Fed is not accessible, USPS branches, as was in the prior House proposal.
Shore up our Democracy
Not only has Coronavirus put our health and our economy under extreme duress, but as the recent Wisconsin Supreme Court election so dramatically demonstrated, our democracy is also under threat. Given the scale of the need to protect both the general election and postponed primaries, the $400 million in election funds in the CARES Act should be considered a down payment only.
To shore up our democracy, Congress must:
- No Lobbying: Prohibit any company that receives COVID-related federal support from all federal lobbying and campaign contributions for the duration of the national emergency. The CARES Act currently features no such limitation.
- Remote Deliberations for Congress: Turn on remote deliberations as part of the next COVID-19 supplemental bill, and provide adequate funds to Congress itself to support technological modernization and proper oversight.
- Elections Funding: Provide states and territories with $4 billion to:
- Expand vote-by-mail options, including no-excuse absentee voting, so that states can offer every registered voter the ability to vote by mail if they choose to do so.
- Extend in-person early voting to reduce long lines and to ensure that Americans have multiple weeks to cast their ballots.
- Ensure safe, accessible polling places, especially for voters without easy access to mail-in voting.
- Expand online and same-day voter registration in all states and to all voters.
- Educate voters about their voting options this November.
Ensure Strong Oversight & Effectiveness of Relief Funds
The oversight provisions in the CARES Act are too weak and modest to monitor trillions of dollars in federal spending during the pandemic. Stimulus oversight bodies must ensure support gets to those who need it and actively prevent rigging of the process in favor of wealthy white elites in order to regain the public’s trust in government. To ensure this, Congress must:
- Build Recovery Infrastructure: Congress must build the infrastructure necessary to deliver an effective stimulus and recovery, given the scale and importance of the undertaking. This could include the establishment of an independent agency responsible for allocation of stimulus resources; a tripartite committee composed of labor, management, and government at each major corporation receiving stimulus funds; and/or a national investment authority to finance the reconstruction of the U.S. economy through infrastructure and other public works projects.
- Conflict of Interest: Impose stronger conflict of interest provisions
- Congressional Oversight Commission: Strengthen the Congressional Oversight Commission (COC) to include subpoena power
- Reporting Requirements: Expand and strengthen reporting requirements to cover all COVID financial assistance, and require the Federal Reserve and the Treasury department to disclose names and terms for all assistance.
- Executive Accountability: Require half of pay that exceeds $1 million for employees at each company that receives a bailout to fund a pool to be used to pay fines if the firm is found guilty of misuse of aid or other misconduct. (Otherwise, taxpayers will be paying company fines for abuse of taxpayer monies.)
Impact on Black, Indigenous, and Other People of Color
- Racial Disparity Data: Congress must collect data on and address racial disparities in the response to COVID-19.
- No Waivers: There must be no waivers of or amendments to non-discrimination provisions in any relief program.
- Limited English Proficient: Congress must provide sufficient funding to ensure stimulus materials and services are accessible to Limited English Proficient (LEP) people living in the United States.