ICYMI: Automatic Stabilizers in the News
The New Democrat Coalition (NDC) is committed to bold, innovative solutions to help Americans deal with the impacts of coronavirus. The NDC was the first House ideological caucus to publicly release a comprehensive set of recommendations, which included automatic triggers to help end the pandemic and mitigate the severe economic disruptions it has caused.
Following House passage of the CARES Act, the NDC Leadership team sent a letter to House Leadership and Committee Chairs urging them to focus continued COVID-19 response packages on targeted, timely, and temporary policies. The NDC reiterated the need for automatic stabilizers, along with a national recovery strategy and health care coverage affordability, to be included in future relief packages to support the nation’s recovery.
Catherine Rampell of the Washington Post today wrote about the current state of play on “‘automatic stabilizers,’ or programs that ramp up automatically when the economy tanks.” Specifically, she notesNDC Rep. Don Beyer’s proposal to implement automatic stabilizers for unemployment benefits.
“Fair warning: Trigger-based programs are likely to have big up-front price tags. But they are no more expensive than the cumulative cost of multiple program extensions, such as those enacted after the Great Recession.
“They could actually be less expensive, because they’d prevent costly program lapses and restarts. And they’d give states greater certainty around budgeting, and households greater confidence in their ability to pay bills. (Remember when Republicans used to complain about policy uncertainty?)”
…
“The next round of stimulus negotiations will be difficult and high-stakes. But it must include relief measures automatically linking stimulus to economic conditions, so that further rounds of negotiations can have lower stakes. Some Democratic lawmakers have proposed plans that would do this. Rep. Don Beyer (Va.) and Sens. Michael F. Bennet (Colo.) and Jack Reed (R.I.) recently offered a framework for linking enhanced jobless benefits to (duh) the joblessness rate. So did Sen. Ron Wyden (Ore.).”
As reported in Roll Call, the NDC was pleased to see House Speaker Nancy Pelosi support the use of automatic stabilizers in future coronavirus relief packages last week. As stated in Roll Call:
“Automatic stabilizers are a mechanism for keeping government assistance flowing by tying relief programs to economic or timing triggers. The New Democrat Coalition, a group of more moderate House Democrats, has been pushing leadership for months now to include automatic stabilizers in economic relief legislation.
…
“Washington Rep. Derek Kilmer, chairman of the New Democrat Coalition, has a bill that uses an automatic stabilizer to extend the life of the Paycheck Protection Program, which provides forgivable loans to small businesses to keep employees on payroll. It would sunset the program 30 days after the national emergency declaration ends and allow borrowers to request extensions of the eight-week loans as needed.”
Today NDC Vice Chair Scott Peters led colleagues in a letter to Speaker Pelosi, emphasizing automatic stabilizers as an essential inclusion to the next COVID-19 response package. Read the full letter or excerpts below:
“In uncertain times, Congress can provide predictability to get our economy back on track by tying continued relief to economic triggers. Automatic stabilizers, which keep aid on when it is needed but turn off when it isn’t, are fiscally responsible. The beauty of automatic stabilizers is that the economy tells us when to start backing off of additional stimulus.”
…
“The coronavirus pandemic has uprooted the lives of many Americans, and our country will feel the impacts of the damage for years. Congress should not make the same mistakes again. Nearly all economists agree: Congress needs to go big to save our economy.”
Read more about automatic stabilizers in Washington Post, Roll Call, and Rep. Scott Peters’ letter. Read the NDC’s economic recommendations and the NDC’s letter to House Leadership and Committee Chairs.
Next Article Previous Article