Building an Economy that Works for Everyone

As Feds Fail to Act on HEROES, Washington’s Budget Crisis Deepens

Congress refuses to use a tool that could prevent national economic devastation

Hold on to your hats. Washington’s revenue forecast is not pretty. We’re facing a $9 billion budget gap over the next three years. The forecast, released by the Washington State Economic and Revenue Forecast Council on June 17, portrays a dismal, if not unexpected picture of our state’s financial well-being.

The forecast comes at a time when, despite President Trump’s insistence that the COVID-19 pandemic is over, record numbers of cases are being reported across the country and the Institute for Health Metrics and Evaluation projects cases will surpass 200,000 in the U.S. by October.

The good news? Congress has a tool that would prevent country-wide devastation and impoverishment for millions of Americans. It’s called the HEROES Act. The bad news? They aren’t using it.

The House of Representatives passed the HEROES Act on May 15, but the Republican-dominated Senate has failed to take action on the bill, due to their view of the bill as “frivolous” and a “waste of taxpayer dollars”.

The relief package, which would be the fourth in a series of relief bills passed at the federal level, contains $3 trillion in provisions that would provide crucial relief to individuals and businesses and would help state, local, and tribal governments avoid devastating budget cuts.

Key provisions of the HEROES Act include:

  • Extending unemployment insurance enhancements through 2021;
  • A second round of $1,200 stimulus payments (and this time, unlike previous federal relief packages, the payments would cover all dependents and also apply to undocumented people who pay their taxes using Individual Tax Identification Numbers);
  • Nearly $900 billion to fill state, local, and tribal government budget gaps;
  • $7.6 billion of emergency funding to federally qualified community health centers, many of which are struggling to continue running;
  • A 14% federal Medicaid match increase, to help states meet sharply rising Medicaid costs and prevent states from having to cut health care to low-income and vulnerable people;
  • Medicaid pathways for covering COVID patients who are uninsured and for citizens of Freely-Associated States (COFA).

While HEROES isn’t perfect (it fails to provide the funding needed for child care and hands a huge win to the health insurance industry by subsidizing ultra-expensive COBRA plans), federal support is essential to flattening the curve and preventing an economic catastrophe.

The Great Recession a decade ago lasted much longer and caused lasting harm to millions of Americans because Congress pulled back from economic stimulus much too soon. If Congress repeats the same mistake now, the consequences will be even worse. As federal leaders fail to act, states like Washington fall deeper into budget crises, and our ability to protect the health and economic security of our communities falls with it.

  • Leave a Reply
    • David Dittemore

      About time for a state income tax!!!

      Jul 4 2020 at 6:11 PM

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