Viewpoint: Next federal COVID-19 relief spending should be targeted to states, localities

Karen Rubin
Karen Rubin, Columnist

It is beyond upsetting that as more than 4.5 million Americans have been infected with COVID, the dead approach 150,000 and 30 million are unemployed and losing their health insurance as well as under threat of losing their homes, Republicans are holding Americans hostage in order to create another $1 trillion slush fund for Trump and Friends of Trump – aid that Republicans condition on employers having immunity against liability if workers get COVID-19 because they can save money by not providing safe working conditions, while forcing workers back to work.

And just for a kicker, the GOP coronavirus bill, while cutting unemployment benefit by two-thirds, includes $1.75 billion to rebuild the FBI building where it is now in order to prevent a potential competitor to the Trump Hotel, plus 100 percent deduction for business meals (which would benefit Trump’s hotels). But not a cent to ensure safe and secure elections this November.

What is needed now is what the Democrats have outlined in the Heroes Act, which provides $375 billion in budgetary relief for local governments to help avoid cuts to public services, layoffs, and/or tax increases, all of which could further negatively impact the local economy (and has been sitting on Mitch “Grim Reaper” McConnell’s desk for more than two months).

But I would go further: what is needed now is $2 trillion in relief and stimulus sent directly to states and localities, to public schools and health care, and to keep renters from eviction and homeowners from foreclosure and families fed. That’s it.

States, counties and cities are the entities closest to the people (and less likely, therefore, to be stolen); spending to keep states and localities healthy will go far to keep the economy out of a Great Depression and keep families from financial ruin.

State and local governments employ 15 million and public spending accounts for 11 percent of the Gross Domestic Product (health care is 18 percent). Unlike the federal government, states and localities cannot have a budget deficit.

So, the pandemic, which has decimated major revenue sources, threatens jobs and services in education, public safety, health care, transportation and other vital functions.

America’s 3,069 counties, employing 3.67 million public servants, are on the front lines of the nation’s response to the coronavirus pandemic, operating 1,900 public health departments – the ground troops in the CDC’s fight against this complex outbreak – nearly 1,000 public hospitals and critical access clinics, more than 800 long-term care facilities and 750 behavioral health centers.

County governments run emergency operations centers and 911 services, court and jail management, public safety, protective services for children, seniors and veterans, and coroners and medical examiners.

Nassau County Executive Laura Curran and Suffolk County Executive Steve Bellone, reporting on a study about the impact of COVID-19, said Long Island “shed jobs here faster than NYC “– 270,000 jobs evaporated in just the first two months, 375,000 projected for the year. The hospitality sector alone lost 82,000 jobs; health care and social assistance shed 59,000.

Altogether, Long Island workers are expected to lose $21 billion in earnings while Long Island faces $61 billion in reduced economic activity. The counties expect a 30 percent fall in tax revenue.

Nassau is looking at a $749 million deficit over 18 months, “100 percent due to COVID. We stayed indoors. We did the right thing.”

Suffolk is looking at an $800 million budget gap, but even layoffs, lags in payroll, increasing sales tax and amortizing pension (the last thing we should be doing is laying off workers and increasing taxes) –only amount to $150 million. “This is a catastrophic situation.

“This would be a manageable crisis if federal disaster aid comes through. But without it, the numbers we are talking about are catastrophic, not an ‘economic downturn.’ The difference is between a manageable fiscal crisis versus catastrophe if there is no Heroes Act, no direct funding to states and counties,“ Bellone said.

States and localities should be the ones to spend money to provide public education – whether making the physical improvements to create safe environments in school buildings, PPE, hiring more staff, or improving virtual learning.

States and localities should be the ones to conduct testing, hire back from the unemployed the contact tracers and frontline and essential workers. They should expand Medicaid, reopen Obamacare and staff clinics.

It should go to shore up Food Stamps, food banks and programs to keep renters in their apartments and homeowners in their homes.

Instead, Trump and Mnuchin are salivating on making yet another fortune, as in 2008’s Housing Collapse, while using evictions as yet another form of voter suppression – challenging the right of people to cast a vote who have been thrown out of their residences. (It also helps them in sabotaging the census and apportionment).

Funding should go to maintain the nonprofits and institutions that are foundational to our communities and our society – the arts centers, the museums, the theaters which are holding on by thumbs.

Dollars should go to shoring up the US Post Office and election protection and to complete the census – all of which pay people to work as well as provide vital services for communities.

In this way, the stimulus would not only keep the services most vital at this crucial time, but actually support the economy, ripple through the economy and do real good.

“If Washington doesn’t provide state and local aid, there will be drastic budget cuts,” Governor Cuomo said. “We have about a $14 billion loss of revenue. We have about a $5 billion cost of this COVID virus. I’m calling on Republican lawmakers in this state to stand united with New York. It’s time to put your politics aside, stand up and call on your colleagues to do the right thing. You were elected to represent the people of this state, not the Republican Party. Fight for New Yorkers as loudly as you play politics for your party.”

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Karen Rubin

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