Our country is reeling under the dual onslaught of COVID-19 and runaway unemployment, but there’s one person who’s willing to give President Trump high marks for handling the situation: Donald Trump. “I think in a certain way, maybe our best work has been on what we’ve done with COVID-19,” he mused in an interview this week.

Most Americans disagree with Trump’s generous self-appraisal. “Since March 20, President Donald Trump’s net approval rating (approval minus disapproval) for his coronavirus response has dropped 23 points, settling at a new low of minus 9 this week,” reports Morning Consult, which tracks public opinion on the crisis daily.

“The president’s failure to maintain public confidence in recent weeks stands in contrast with a number of other world leaders, who benefited from significant approval rating improvements in the wake of the pandemic,” Consult adds. Other polls also show that Americans express much more confidence in their governors than in Trump when it comes to combatting COVID-19 and reopening the economy.

The truth is, COVID-19 is fast becoming Trump’s Vietnam War — the defining debacle of his presidency. Even more than impeachment, it poses a mortal threat to Trump’s reelection in the fall. He and his allies know that, which is why the country should brace for a furious propaganda campaign from Trump, GOP SuperPacs, Senate Majority Leader Mitch McConnell and the Republicans’ house organ, Fox “News.”

It will be a cynical exercise in instant historical revisionism. Trump and his minions will recast his fumbling response to the virus as decisive leadership that saved “millions of American lives.” It could have been worse, we’ll be told, and that much will be true, because with Trump at the helm it could always be worse.

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Many state governments have deemed school construction an essential service during the coronavirus crisis. This is a good thing. While New York, the nation’s pandemic epicenter, didn’t give school facilities projects the green light until April 9, states less hard-hit were quicker to make the declaration. That sounds like good news for charter schools expecting to move into new or renovated buildings in time for the fall.

Not necessarily.

Mass public quarantines implemented by China to slow the coronavirus there temporarily shut down factories in the world’s second-largest economy. This will disrupt supply chains globally for months at least, and that includes building supplies.

What does this chaos mean for school leaders, building owners and contractors — not to mention teachers, students and parents — wondering about the fate of charter school construction projects? The Charter School Facility Center turned to three experts in the field for guidance.

Read the full piece here.

To no one’s surprise, Stephen Miller wants to make President Trump’s temporary suspension of immigration permanent. On April 22^nd, in a very belated — and plainly cynical — response to the COVID-19 crisis, the president signed an executive order restricting the issuance of new green cards.

The move was mostly symbolic: the crisis has already halted many forms of immigration. Court proceedings and visa processing are on hold; travel restrictions have been in place for some time. Miller, chief White House nativist, is already saying that the order is a wedge to put in place permanent immigration restrictions, to “turn off the faucet of new immigrant labor.”

Politically, the restrictions are fairly deft and put Democrats in a bind. What is former vice-president Joe Biden, the presumptive nominee, supposed to say? What are any Democratic candidates for Senate supposed to say? They can criticize the restrictions all they want but, so far, Trump’s immigration “pause” appears to have support.

In a new poll from the Washington Post and University of Maryland, two-thirds (65 percent) of respondents said they supported the president’s suspension. Support was predictably split by party affiliation, with 83 percent of Republicans approving of the policy. Yet 67 percent of independents and 49 percent of Democrats also supported the restrictions.

Any calls by Democrats to reopen the borders will be fairly unpopular. They would be met with inflammatory social media activity. That is not a reason to refrain from criticizing the president — but Democrats need to have a smart alternative at hand. This alternative must grapple with the complications of immigration policy while also demonstrating a vision of a functioning immigration system. Moral outrage at the president is warranted, but if it isn’t accompanied by something constructive, Democrats will be left vulnerable to accusations that they simply want to throw open the borders.

Read the full piece here.

The coronavirus crisis is a stark reminder of the grave costs of infrastructure neglect — in this case, neglect of our public health infrastructure.

Decades of hard-earned experience — with SARS in 2002, H1N1 in 2009, and Ebola in 2014 — gave us a roadmap for international and domestic rapid response systems to identify and isolate outbreaks before they could cause catastrophic damage.

Properly funding pandemic preparedness infrastructure might have cost us a few billion dollars. Instead, our lack of preparedness has cost the U.S. economy over $12 trillion in market value, $2 trillion in taxpayer-funded stimulus and bailouts (and counting), threatened the health of hundreds of millions of Americans, and plunged the world economy into a what could be a global depression.

Read the full piece here.

On Monday, April 20^th, President Trump tweeted that he would “temporarily suspend immigration into the United States!” By the middle of the week, the executive order he issued had suspended many forms of immigration for 60 days.

In some ways, this was merely pro forma. It is simply the latest in a string of policy actions taken in response to the pandemic and economic shutdown. Immigration court proceedings are on hold, visa processing is suspended, non-essential travel from abroad has been banned. These are unfortunate but understandable.

Almost immediately, Trump was accused of politically exploiting the pandemic to further his restrictionist immigration agenda. Neither Trump’s actions nor the criticisms are surprising — he is, after all, a politician and this is basically the definition of what they do. Besides, some urban liberals are doing the same thing.

One of the president’s stated reasons for his executive order is to “protect” Americans jobs in the midst of rising unemployment. In many parts of the country, the economic doldrums are expected to last into 2021.

This may sound paradoxical but, in contrast to the president’s erroneous “lump of labor” thinking — and in contrast to pre-crisis Democratic calls to throw open the borders — some modestly expanded immigration channels can help with economic recovery.

There are at least three areas where some loosening of immigration policy could kickstart the rebound — and perhaps generate bipartisan agreement.

Read the full piece here.

The enormity of challenges posed by the coronavirus pandemic, and the speed at which crises can take root, demand that our leaders act boldly and quickly. But the need for decisive action also gives leaders an unfortunate opportunity to “not let a good crisis go to waste” by slipping unrelated policies into must-pass legislation. Congress has largely avoided this temptation to date, and it should continue to avoid it while preparing the next rounds of investment, relief, and stimulus.

Unfortunately, some of President Trump’s proposals for the next comprehensive relief bill would not meet this standard. Instead, these ideas risk exacerbating the spread of the disease while recklessly giving money away to those least in need. Although significantly less harmful, some Democrats have also put forth proposals that would do little to mitigate the current crisis and have no place in stimulus legislation. Policymakers in both parties should keep taking bold action to fight this historic pandemic without embracing these counterproductive or wasteful policies.

1. Limit Business Liability for Employees Who Contract the Coronavirus: Among the worst ideas proposed by the administration and its Republican allies in Congress is offering businesses immunity from legal liability if they make decisions that cause their employees to get sick. These decisions could include opening their business too quickly or failing to abide by social-distancing guidelines. There is no debate among top economists that social distancing should continue for as long as is necessary for the good of public health, including partial or full business closures. Liability protection would incentivize businesses to take risks with their employee’s health, likely exacerbating the spread of the disease. Moreover, it may not even achieve its goal of hastening the recovery — if consumers do not think it is safe to shop, then businesses will not thrive even if they have legal protections. This proposal would only double down on the public health blunders Trump has already made, such as cutting staffing and financing for vital public health offices, downplaying the virus’ threat, and neglecting states who tried to buy lifesaving equipment.
2. Restore the Food and Entertainment Deduction: President Trump has also proposed bringing back the full business deduction for food and entertainment expenses, which he claims would encourage people to patronize restaurants struggling for business amid the pandemic. Restoring this deduction, which has been curtailed over the years to prevent businesspeople from reducing their tax burden through extravagant purchases, will do nothing to encourage diners to eat out as long as they believe it is unsafe to do so. The main beneficiary would be someone like President Trump, a hotel owner with a financial interest in encouraging businesspeople to travel and dine at high-end destinations.
3. Cut Payroll Taxes: The Trump administration has repeatedly championed cutting payroll taxes as a preferred form of stimulus. Unfortunately, doing so would provide the greatest assistance to those that need it least. Workers who are laid off or otherwise unable to earn a paycheck would receive no benefit from a payroll tax cut, while someone earning six figures would receive a tax cut more than double the size of what a median-wage earner would receive. Moreover, cutting employer-side payroll taxes would give little benefit to businesses in the short-term as half of their tax payments have already been suspended until the end of 2021, and the other half until the end of 2022. If policymakers nevertheless choose to cut or suspend payroll taxes, these reductions should only apply to the first $15,000 of a worker’s earnings or the earnings of workers whose production capabilities have been idled by the coronavirus. They should also consider replacing the payroll tax with more-efficient tax policies to better meet our economy’s needs in both good times and bad after the current crisis has passed.
4. Cut Capital Gains Taxes: The administration has also proposed cutting the income taxes that investors pay on the gains they make from selling stocks and other assets that have appreciated in value. Income from capital gains is heavily tilted towards high-earners: households in the highest-income 1 percent make 22 percent of their income through capital gains in 2016, while less than 2 percent of income that went to all other households came from capital gains. Accordingly, cutting capital gains taxes would be extremely regressive. Additionally, temporarily incentivizing investors to sell their assets would only accelerate the recent crash in market prices.
5. Repeal the SALT Cap: The Trump administration has not been alone in using the coronavirus crisis to push for wasteful tax cuts. Some Democratic leaders have floated the idea of retroactively rolling back the $10,000 cap on the amount of state and local tax (SALT) liabilities households can deduct from their federal income taxes. Proponents argue any such proposal would target the benefit towards the middle class, but the SALT cap affects very few middle-class families. The only people affected by the cap are those who earn enough to both benefit from itemizing their deductions and have a large enough state liability to exceed the cap, so repealing the cap would mostly benefit the very wealthy. Ninety-six percent of the benefit of fully repealing the SALT cap would go to the highest-earning fifth of American households, and 56 percent of the benefit would go to the highest-income 1 percent. Further, making this change retroactive obviously would not affect taxpayers’ past decisions about where to live and pay taxes, and would simply offer a windfall to wealthy people in high-tax states.
6. Forgive Student Loan Debt: Some Democrats, echoing presidential campaign ideas from Sens. Bernie Sanders and Elizabeth Warren, have also proposed forgiving up to $10,000 of every student loan holder’s debt burden. There is no question that policymakers should be giving borrowers flexibility at a time when a short-term cash crunch will prevent many from making their required payments. But Congress has already addressed this need by suspending required minimum payments and additional interest accrual on public student loans for six months. Forgiving future debt won’t provide any economic benefit until long after the crisis and need for stimulus have passed. Further, untargeted student debt forgiveness would be a regressive policy. Students take on debt to increase their earning potential, and high-income people are more likely to have student debt than low-income people. The steps Congress has already taken achieve the same short-term financial relief as student loan forgiveness in a far more effective way.
7. Create Costly Permanent Programs: Some have argued that the government’s ability to spend trillions of dollars fighting the coronavirus and its economic impact now somehow proves that fiscal discipline in normal economic times is unnecessary. Although the government can pay back a one-time cost in future years, permanently large deficits will compound rather than fall over time. The federal government is fortunate to fight this battle against the pandemic at a time when interest rates are low, but those rates may well rise in the future if structural deficits are not brought under control. Rising interest costs threaten to crowd out critical public investments and reduce future economic growth. Accordingly, lawmakers should not accept policies that permanently increase deficits just because debt-financed stimulus is necessary to address temporary problems.
8. Enact Other Unrelated Policy Riders: The urgency of action to support the economy unfortunately makes it easy for leaders on both sides of the aisle to attach unrelated riders to emergency legislation. The CARES Act, although generally focused on the task at hand, included some policies that have nothing to do with the coronavirus pandemic, such as extending abstinence-only sex education programs and requiring the Food and Drug Administration to consider approving new kinds of sunscreen. The Trump administration has used the crisis as a pretext to weaken important environmental regulations and suspend applications for green cards. Democrats have also proposed including other policies, such as a permanent $15 minimum wage for workers at businesses that benefit from relief funds, that would not help mitigate the current crisis. These policies and others that do not relate to the immediate health and economic crisis could slow down the passage of much-needed support and should be debated separately on their own merits.

There is no shortage of good ideas to fight the coronavirus and mitigate the economic damage it’s doing to businesses and families. Lawmakers should reject inferior alternatives that would waste important public resources or otherwise exacerbate the crisis.

Read the full piece here.

Since the coronavirus pandemic reached America’s shores, Congress has passed four major pieces of legislation to address the growing crisis. The $8 billion Coronavirus Preparedness and Response Supplemental Appropriations Act funded public health agencies at the federal, state, and local level and set money aside to lower the cost of any eventual vaccine. The Families First Coronavirus Response Act, which cost just under $200 billion, offered medical leave to many of those affected by the outbreak and expanded public support programs such as Medicaid. Finally, the $2.3 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act and a nearly $500 billion supplemental follow-up bill extended loans and grants to businesses, sent stimulus checks to most Americans, expanded unemployment insurance, and offered funding to hospital systems and state and local governments. Together, these laws have provided a powerful response to the crisis — but more still needs done, and leaders from both parties are beginning to consider what to include in the next piece of legislation.

Congress was right to bolster spending on the health-care system, as fighting the virus itself must be our top priority. Increasing production and distribution of personal protective equipment, ventilators, and other lifesaving equipment will help reduce the disease’s spread and death toll. Leaders must also continue to ensure that there are enough affordable tests to effectively track the disease before they gradually reopen the economy. And most importantly, policymakers should clear regulatory and funding barriers that inhibit the development of effective treatments and an eventual vaccine needed to end the pandemic once and for all.

But Washington must also do more to help businesses, people, and governments that are suffering financially. In the short-term, this means providing more “life support” to an economy that has been put into a temporary coma in order to facilitate public health measures. Policymakers must then put in place policies that will help revive the economy when it is safe to do so. This piece outlines a series of steps U.S. policymakers should take to facilitate both phases of this recovery and ensure future prosperity after the coronavirus.

Supporting State and Local Governments

People across the country are turning to their governors, mayors, and other state and local officials for support during this crisis. But many programs that support struggling citizens and are partially financed by state governments, such as unemployment insurance and Medicaid, are already being financially stressed by the economic freeze. State and local efforts to fight the pandemic itself are also expensive, and with much of the economy shut down, states are losing vital sales and income tax revenue. The result is a fiscal squeeze on state and local governments that with few exceptions are required to balance their budgets each year. Without adequate support from the federal government, states and municipalities will be forced to cut services or raise taxes at a time when doing so would undermine national efforts to prop up the economy.

Fortunately, Congress has already taken some steps to ease the financial burden these governments will experience. The first coronavirus bill allocated almost $1 billion to state and local health departments, which coordinate contact tracing, quarantines, and other essential efforts to contain the disease. The second bill increased the federal government’s matching rate for state Medicaid spending. And the CARES Act established a $150 billion fund to directly supplement the budgets of states, territories, tribal governments, and large cities.

But state and local leaders say this is not nearly enough. Over 2100 cities still expect budget shortfalls, and many say they will have no choice but to lay off workers and cut public safety spending this year if they don’t receive adequate financial support. New York City, which has the nation’s largest coronavirus outbreak, is already preparing to cut back on trash pick-up, traffic safety operations, and public transportation. And some governors are warning that they may need to cut teacher pay or lay off teachers before the next school year. Accordingly, the bipartisan leaders of the National Governors Association — Govs. Andrew Cuomo (D-NY) and Larry Hogan (R-MD) — are asking Congress to give states and territories at least $500 billion in additional aid. Depending on the severity of the current recession, PPI estimates that it is possible even more support could be needed over the coming year.

Democrats fought to include $150 billion in additional support for state and local governments in the most recent coronavirus relief legislation to help keep states afloat until federal leaders reach a larger deal, but they were rebuffed by their Republican counterparts. Some Republicans oppose offering federal aid because they believe doing so will make it easier for state and local governments to delay reopening their economies, even though those social distancing guidelines are currently essential for slowing the virus’ spread. Meanwhile, Senate Majority Leader Mitch McConnell has suggested that state and local governments themselves are responsible for their budget crunches because some had pre-existing shortfalls in their pension funds. But the coronavirus and the economic shutdowns required to contain it are imposing an additional squeeze government budgets completely unrelated to any earlier policy decisions. State and local governments, no matter how good their fiscal management before the current crisis began, will need financial help for as long it continues.

There are two main ways Congress can get money to state and local governments. As it did in the CARES Act, the federal government could offer states and localities a lump-sum amount based on a jurisdiction’s population or other metrics of need. For example, a bipartisan Senate proposal would create a $500 billion fund to support state and local governments with grants based on the virus’ spread in each jurisdiction and their lost revenues, in addition to their population size. A lump-sum structure such as this offers financial support immediately rather than as state and local governments spend, and ideally gives governments flexibility in their use of the funds to prevent layoffs or cuts to essential services. Although the CARES Act initially required aid go towards medical equipment and other spending priorities specifically relating to the coronavirus outbreak, Democrats have fought to allow state and local governments to use these funds to plug general revenue shortfalls as well.

Alternatively, Congress could increase the matching rate for existing state and local partnerships, as it did with Medicaid in the Families First Act. Doing so avoids the practical limitations of establishing new channels to move the money and oversee it while incentivizing state and local governments to maintain their pre-existing spending commitments. Tying aid to state programs such as Medicaid that grow with health-care expenses will also target aid somewhat towards the states with the greatest costs. Regardless of the mechanism Washington uses to support state and local governments, it is essential that sufficient aid is provided — and soon.

Strengthening Automatic Stabilizers

The path this crisis will take is unpredictable, so federal action should be designed to last as long as is necessary to protect public health and stabilize the economy. The best way to ensure this is through “automatic stabilizers” — policies that cause spending to rise or taxes to fall automatically when the economy contracts, and vice versa. These policies are responsive to real economic needs and are unconstrained by the political processes that often slow the passage of discretionary stimulus or end it prematurely. Tying relief to real economic conditions can also be politically beneficial because doing so ensures the public feels that federal actions are supportive enough to sustain them through the crisis.

The federal government should use automatic stabilizers to extend its relief measures for as long as the economy needs them. The Payroll Protection Program (PPP), which was established by the CARES Act to support small businesses, required an emergency infusion of funds when it ran out just three weeks after opening. Rather than continuing to provide limited pots of money that will only briefly stem the deluge of layoffs and closings, lawmakers should change the program to grow automatically with eligible business’ needs or replace it with more direct payroll subsidies. Similarly, the CARES Act’s $600-per-week increase in unemployment benefits will only last for 39 weeks, even though there is no guarantee workers can reasonably expect to find a job in that time. Policies such as this one should expire only when certain economic benchmarks are met rather than on an arbitrary calendar date.

Future stimulus packages will also give Congress an opportunity to address structural problems that couldn’t be addressed in their past legislation:

• Let businesses access more forgivable loans to pay for fixed costs other than payroll (such as rent) so long as they don’t lay off workers.
• Give states adequate resources to modernize their antiquated unemployment insurance systems, the limitations of which prevented federal policymakers from enacting targeted benefit increases and instead forced them to inefficiently increase all benefits by a flat amount, resulting in some workers receiving benefits even greater than their lost wages.
• Plug holes in the Supplemental Nutritional Assistance Program (SNAP) expansion included in the Families First Coronavirus Response Act, which excluded the poorest families and will only last until the president’s national emergency declaration ends.
• Perhaps most importantly, lawmakers must act decisively to ensure aid reaches those who need it by reigning in President Trump’s corrupt efforts to avoid accountability, such as his decision to unilaterally fire and replace the independent Inspector General who was supposed to lead the oversight of lending under the CARES Act.

Addressing these shortcomings to the extent possible during a crisis would ensure that relief efforts reach those who truly need them and would help people and businesses weather the economic storm.

Restarting the Economy

In the short term, policymakers should focus on efforts to bolster our public health response and give Americans the economic life support they need while the economy remains frozen. The policies above fulfill these objectives by keeping Americans attached to their jobs, giving them the money they need to pay for necessities and preventing otherwise viable businesses from failing. But policymakers should also begin developing policies that will help stimulate the economy into a robust recovery once it is reopened by encouraging businesses to invest, consumers to spend their money, and employers to hire more workers.

One example of a good “recovery” policy is increasing infrastructure investment. The U.S. already had a $1.5 trillion infrastructure deficit before the coronavirus crisis hit — rebuilding our aging infrastructure would create good-paying jobs, give those workers more money to stimulate the economy through consumption, and leave future generations with a robust public investment that will pay dividends for decades. Both President Trump and Speaker Pelosi have demonstrated interest in boosting infrastructure investment, making it a form of stimulus that in theory at least should have bipartisan support. But timing is everything: there is limited value in putting more people to work at a time public health experts are advising them to stay home, and putting money in their pockets will do little good when they are unable to spend it on anything but basic necessities because so many producers are closed. Creating jobs and encouraging consumption are goals best left for the end of the pandemic rather than when we’re in the middle of it.

Another good way for policymakers to encourage consumption as they reopen the economy is by reducing taxes that ordinarily discourage it. Forty-five states and many local jurisdictions have sales taxes that raise the cost of buying and selling goods. While economists generally favor taxes on consumption because they encourage saving and reduce economic distortions, temporarily reducing sales taxes in a weak economy can help boost demand when it’s most needed. Federal leaders should encourage state and local governments to cut sales taxes and compensate those governments for the lost revenue (states that do not have sales taxes to cut could instead offer refundable tax credits to residents for purchases they make during the crisis, the cost of which would be reimbursed by the U.S. Treasury). The cuts should be tied to economic indicators so that the taxes automatically rise back to normal as the economy improves. The entire subsidy from cutting sales taxes would encourage spending, making this policy an exceptionally potent stimulus tool. Lower-income people would disproportionately benefit from sales tax cuts because they must spend a larger share of their income just to get by.

Finally, after the pandemic has been defeated and our economy fully recovers, policymakers must confront our nation’s dire fiscal situation. The federal government is on track to spend at least $4 trillion more than it raises in revenues this year. The cost of action should not deter policymakers from taking any step necessary to combat this pandemic and its resulting economic damage, but leaders will need to deal with the debt we accumulate now after the crisis passes. The national debt was already on track to grow at an unsustainable rate in the coming years because of wasteful tax cuts, the rising cost of health care, and the strain our aging population will put on social insurance programs such as Social Security and Medicare. Adopting automatic stabilizers will help ensure that stimulus is no more expensive than it needs to be, but the only reliable way to preserve our fiscal capacity to address future economic crises is by adopting comprehensive solutions that close the structural gap between revenues and spending.

No one can predict all the challenges that lay ahead or how long they will take to resolve. Rather than enacting short-sighted solutions that only carry our country through one month at a time, policymakers should develop a comprehensive roadmap to recovery that will adequately meet our economy’s needs at each turn. Supporting state and local governments, strengthening automatic stabilizers, and putting in place a package of policies to stimulate the economy when it’s ready to reopen would put America back on the right track.

Read the full piece here.