WASHINGTON — In March 2020, the economy was grinded to a halt, as the COVID-19 pandemic forced sudden widespread shutdowns of businesses. As Congress watched the economy fall off the cliff, it responded by doing something lawmakers have resisted since the 1960s: a large expansion of the social safety net.
Emergency paid sick and family leave, modernizing and expanding unemployment insurance, monthly tax payments to families with children and expanded health care access all were passed during the emergency. These programs provided a critical lifeline and saved millions of families financially. In turn, it rescued the U.S. economy from a crash that could have rivaled the Great Depression.
“It was just sort of a sense of hope for the future,” said Piper Stiles, a Maine resident and a single mother of a 10 year old, about the importance of the assistance.
But these programs were temporary. President Joe Biden tried to extend them through his Build Back Better agenda, but Congress failed to find the votes. And despite calls in Washington to cut the deficit rather than expand programs at this time, activists are pressing to foster the permanent return of these benefits.
How Congress acted
The first action that passed Congress at the beginning of the pandemic was emergency paid leave, through the Families First Coronavirus Response Act. The law created paid family, sick and medical leave for the government and employers with less than 500 employees.
Despite its limited form, it was still a major victory for advocates, like Dawn Huckelbridge, director of Paid Leave for All. “Congress suddenly felt the urgency that working families every day had about a lack of paid leave,” she said.
Soon thereafter, Congress temporarily altered unemployment insurance (UI) in the CARES Act. They increased weekly payments by $600, created a benefit program for those outside UI qualifications, like gig workers and contractors, and extended how long recipients can receive checks.
The National Employment Law Project’s UI Campaign Coordinator Alexa Tapia credited workers for why Congress acted boldly, compared with weaker responses to other recessions. “Workers really organized and advocated and made the urgency and the need for this known,” she said.
One year later, a Democratically controlled Congress moved forward even more provisions through the American Rescue Plan Act (ARPA). Newly-created ones included Affordable Care Act (ACA) premium subsidies eligibility expansion and subsidy increases for low-income recipients. It also expanded the child tax credit, from $2,000 per child to $3,000 for children 6 to 17-years-old and $3,600 for children under 6. The provision also made half of the credit come available as a monthly payment.
Elisa Minoff, senior policy analyst at the Center for the Study of Social Policy and the center’s lead in work on the ABC Coalition, a group dedicated to creating a guaranteed income for children, said momentum had been building for years. “Giving cash to poor families helps lift them out of poverty,” she said. “The pandemic really shined a light on the disparities in our economy. So I think there was interest in thinking about what are the supports that can actually help families who are left behind.”
Rep. Rosa DeLauro (D-Conn.) championed an expanded child tax credit for nearly two decades, and it’s that longer term activism that Bob Greenstein, a visiting fellow at the Brooking Institute’s Hamilton Project, said is the reason why Congress could act so quickly. “While most of the provisions that got enacted did not look in January 2020 like they were about to be, it is worth noting years of groundwork had been laid.”
But even despite bipartisan support for some of these initiatives, there was pushback even from the beginning from conservatives concerned about spending and government expansion. “In the early days of the COVID pandemic, Club for Growth was way ahead of the curve recognizing the damage inflicted on economic freedom, opportunity, and liberty,” a Club for Growth, a conservative economic group, spokesperson said. Over two years, the debt expanded by $5.9 trillion, a concerning figure for conservative spending hawks like the Club. Slowly, Republicans started backing away, to the point where ARPA had zero Republican support.
‘It kept families from sinking’
Stiles worked jobs that shut down early on in the pandemic, so she relied on unemployment benefits, which she called a huge help. When the monthly expanded child tax credit payments started coming, Stiles said they didn’t suddenly make her financially sound, but they provided optimism.
“Could this be sort of an inoculant for our culture,” she said, “to (be) willing to extend actual meaningful support to people who are struggling economically?”
The benefits for Stiles were in addition to her support from Maine’s Parents as Scholars program, a Temporary Assistance for Needy Families benefit that aids parents in college. And while Stiles said the extra cash injection wasn’t life changing, she paid off debt that improved her credit rating, and used payments to open a savings account for her daughter.
The government’s interventions had meaningful effects. After the child tax credit expanded in 2021, child poverty fell from 9.7% in 2020 to 5.2%. The drop was even larger for Black and Hispanic children.
During UI expansion, despite the unemployment rate hitting 14.7%, the poverty rate in 2020 fell to 9.3% in June from 11% in February. The national uninsured rate fell to a record low of 8% by early 2022, and the paid leave scheme prevented an estimated 15,000 cases of COVID-19 per day nationwide.
“It saved people’s lives,” Huckelbridge said about emergency leave. “It kept families from sinking.”
Kali Daugherty, a Wisconsin resident and also a single mother of a 10-year-old, was working three jobs before the pandemic. When it hit, she lost one of them. While financial difficulties are constant in her life, she said the expanded child tax credit payments alleviated that. “We weren’t better financially off completely, but we weren’t struggling.”
Using the payments, she didn’t rely on her credit card between paychecks to get last minute groceries or other essentials to last until the next pay day, avoiding acquiring more debt and paying off some. Daugherty also used it for things she wouldn’t do otherwise, like using some of the last payment through the program to take her son to a waterpark, thanks to the increased financial security.
But the child tax credit expired at the end of December 2021, and emergency paid leave ended a year earlier, with ARPA only partially bringing it back via a tax credit. UI expansion and reform lapsed in September 2021.
Some of these programs were supposed to be extended through Build Back Better. UI reforms weren’t in the bill the House passed, but a paid leave scheme was, along with extensions of both the expanded child tax credit and health care subsidies.
But when it came time to pass the bill in the Senate, support dried up. “When we got past the sense of dire emergency, and the economy began to rebound, the support gradually diminished,” Greenstein said.
The final iteration of Build Back Better came through the Inflation Reduction Act. The climate and tax focused bill only included an extension of the ACA subsidy expansion and increases, until 2025, and changes to Medicare.
Ben Day, executive director of Healthcare NOW, a group advocating for a national single-payer health care system, said he thinks health care survived because of what the pandemic revealed. “It just dramatically exposed how employment based health insurance doesn’t make sense at all.” Even then, he said he was disappointed at how few of the health care items from Build Back Better became law.
Return to the status quo
A stereotype of the American social safety net programs is that once you start one, it’s hard to do away with it. An example is the public outcry against the GOP push to repeal the ACA in 2017. Americans, according to polling, were split on whether the expanded child tax credit should be permanent, but broadly support paid leave.
Huckelbridge said the Trump Administration’s Labor Department failed to advertise emergency paid leave, so when it expired there wasn’t outrage. Meanwhile, Greenstein said that trope isn’t exactly true, as Congress before has expanded access to government benefits during economic downturns then taken them away as the economy recovers, though not on a scale like this.
When the programs expired, millions who benefited suddenly lost support. The child poverty rate rose from 12.1% in December 2021 to 17% in January 2022 after the expanded child tax credit’s end.
Daugherty said when payments stopped she returned to the financial struggles expansion temporarily ended. “We just went back to how things were,” she said. Daugherty’s income is just over the limit for other programs, meaning she doesn’t have access to other support. “This is all we had to rely on.”
Tapia contended that paring back the expanded unemployment benefits harmed some workers more than others. “Many Black and Brown workers were left without the benefits they need,” she said. “Every job loss is a crisis, and we need to ensure we have UI benefits that allow workers to meet their family needs, and be able to find good jobs.”
That disproportionate effect on who programs help is partially why Minoff thinks securing a permanent solution is difficult. “There are still a lot of myths and stereotypes about families that are steeped in racism that sort of have a hold on the political discourse,” she said.
The path forward
While coming so close to a long-term law on paid leave Huckelbridge said was “devastating,” the advancement on the issue she said is enormous. “We’ve made more progress in the last three years than we had in the decades prior.”
Day said a key part of that has been an increasing embrace of government, a shift that he thinks was accelerated by the pandemic. “The more the US government provides these programs that have life saving impacts, the more that narrative (of demonizing government) changes.”
That change is happening with voters. In the 2010 elections, exit polls reported 56% of voters said the government was doing too much. But in the 2022 elections, 53% said the government should do more.
Now that some programs have already been implemented, the case for bringing them back gets easier, Greenstein said. Driving that is now-existing evidence for the activists’ arguments. “We have the data showing how immensely successful this program was,” Tapia said about UI enhancement.
And despite the more partisan nature of the debate in the latter half of the pandemic, there are some residual areas where activists see bipartisanship. Republicans have expressed openness to paid leave in the past, particularly parental leave, and Sens. Mitt Romney (R-Utah) and Marco Rubio (R-Fla.) have their own proposals to expand the child tax credit, though different than what activists support.
Overall, Minoff said more lawmakers are prioritizing bringing back the expanded child tax credit, because it benefited so many of their constituents. “They’ve heard directly from families in their communities,” she said. “Now that we’ve tried it, I think it can definitely be easier to get something permanent.”
Stiles and Daugherty are now, after being beneficiaries of the programs, involved in the ABC Coalition’s Parent Advisory Board. If and when the expanded credit returns permanently, they’re pushing it be stronger with more robust benefits.
But while they’re involved in this fight specifically, they also stressed this benefit can’t stand alone. Instead, all of the programs previously mentioned and more need to return or be created for there to be a more effective safety net.
“Welfare in the United States is such a dirty world, and it’s just not in other areas,” Stiles said. “What really needs to shift to allow the change that needs to happen is something that is more subtle and internal, and I feel like that’s the conversation that we need to be having.”
