PODCAST: Congressman Don Beyer on the Path Out of the COVID-19 Economic Crisis

Posted on August 18, 2020 by The Progressive Policy Institute

PPI President Will Marshall and Ben Ritz from the Center for Funding America’s Future are joined by Congressman Don Beyer (VA-8), Vice Chair of the Joint Economic Committee, to talk about the fiscal health of the United States, the path out of the economic crisis caused by COVID-19, the role automatic stabilizers should play as America works to build a resilient recovery, and the Worker Relief and Security Act.

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Invest in Metro Recovery and Resilience

Posted on August 10, 2020 by The Progressive Policy Institute

A resilient city is defined by “the policy-induced ability of an (urban) economy to withstand or recover from the effects of shocks.” It took many U.S. cities years to recover from the 2008 Great Recession and Wall Street meltdown. Today, the coronavirus pandemic and recession pose an even more severe test of the resilience of America’s great metropolitan hubs.

“The scale and speed of this economic collapse is without precedent in modern American history,” according to a new Brookings Institute study. “In just two months, measures to safeguard public health wiped out a decade’s worth of job gains since the Great Recession.”

The speed and strength of America’s recovery from this calamity is inextricably linked to what happens in urban centers. According to 2019 report by The United States Conference of Mayors and IHS Markit, the nation’s 10 highest-producing metro economies generated $7.2 trillion in economic value in 2018, surpassing the output of the sum of 38 US states. Their output exceeds all the nations of the world save China, and is 45% greater than that of Japan, the 3rd largest economy of the world. Twelve of the world’s 50 highest-producing economies are U.S. metropolitan areas. In 2018, the U.S. metro share of total employment increased to 88.1% as metros added 2.1 million jobs, accounting for 94% of all US job gains. Metro areas are also where our most dynamic innovation clusters are centered, particularly for digital technology, pharmaceuticals, biotech and robotics. Boston, Seattle, San Diego, San Francisco and Silicon Valley captured nine out of 10 jobs created in such industries from 2005 to 2017, according to a report by the Brookings Institution’s Metropolitan Policy Program.

Compounding today’s urban economic distress is racial unrest. Coming on top of a disease that has exacted an especially heavy toll on low-income and minority communities, the police killings of George Floyd and other African Americans have triggered protests that continue to roil U.S. cities. Metro leaders are focused not only on the new challenge of recovering from the pandemic, but many recognize they must also tackle the old problems of racial disparity and injustice.

Meanwhile, cities face an intensifying fiscal squeeze. In March 2020, local governments employed nearly 14.7 million people. Two months later that number dropped to 13.4 million with more layoffs and furloughs expected in the coming months as the virus ravages the South and West. Those job losses rippled through various crucial public services, including fire, police, teachers, and frontline healthcare workers.

As millions continue to file for unemployment benefits each week, a recent survey finds that 96 percent of U.S. cities are facing budget shortfalls due in large part to COVID-19. Nearly half report “unanticipated spending increases on top of declining revenue.” City leaders also say they face catastrophic shortfalls in all major revenue categories – 69% loss in permitting fees; 68% in other fees; 63% loss in utility fees; 61% loss in sales taxes; 38% loss in state intergovernmental aid and 35% loss of property tax revenue.

Because of balanced budget requirements, local government officials are facing brutal choices – whether to raise taxes in a recession, lay off more municipal workers, slash public services or all of the above. Without an immediate and direct infusion of fiscal relief for all municipal governments, they are certain to act as a major drag on the nation’s economic recovery.

Only Washington has the fiscal resources to step into the breach and keep both state and local governments from cratering. Without fiscal support, U.S. cities will not have the capacity to tackle high rates of joblessness, rising hunger and homelessness, and entrenched racial and social inequities.

The CARES Act Congress passed in March provided $150 billion in direct aid to state and local governments. That sounds like a big number, but it broke down into $111 billion in direct aid to states; $22.5 billion for major counties and just $5 billion for large cities with populations over 500,000. The local aid was distributed only to about 38 cities.

At this writing, Congress is debating the scope of a new stimulus bill, but Senate Republicans are balking at Democratic calls for an additional infusion of $1 trillion for state and local governments. Yet doing nothing to help state and local governments weather the pandemic, warns Moody’s Analytics, “could shave as much as 3 full percentage points from real GDP and erase about 4 million jobs.”

If we fail to throw metro regions a fiscal lifeline, local governments may be forced to explore additional revenue-generating sources such as raising taxes, fines and fees to support the essential services such as water and sewer. Without direct fiscal assistance from the federal governments, local government will be forced to initiate more layoffs or furlough more workers, and cut critical services such as fire, public safety, education, child services, aging services, meal programs and more.

America’s cities and metro regions are perched on the edge of an unprecedented economic and social calamity. All of us, whether we live in urban, suburban, exurban or small town and rural American, have a shared interest in preventing these engines of national prosperity from falling into a COVID-19 sinkhole. And we need to look beyond the present crisis, tackling structural weaknesses and inequities that put our most disadvantaged and vulnerable citizens at risk.

METRO ACTION PLAN

PPI proposes three ways for the federal government to help cities provide basic services now while also making them more resilient against future crises.

• First, PPI believes state and local aid should be based on empirical evidence of need. To that end we have developed an interactive calculator that tracks state and local revenue losses due to the pandemic recession. By our calculations based on current economic projections, state and local governments need roughly $500 billion before the end of 2021 to replace lost revenues.

• Second, we recommend that Congress take two steps to ensure that aid reaches local governments as quickly as possible. One is to require states to meet “maintenance of effort” standards to ensure a significant part of the aid is passed on expeditiously to cities. We also propose that the federal government deliver a large percentage of its aid directly to local governments in the form of “revenue replacement” grants, to enable them to suspend layoffs and avoid cuts in essential services.

• Third, we call for creation of a “Metro Recovery and Resilience Board” to take a longer-range view of urban finances and identify key investments that metro regions should make, in direct partnership with Washington, to sustain the nation’s post-Covid recovery and make local governments more resilient against future national emergencies. The Metro Board would consist of leading Mayors, major county administrators, Members of Congress,
and top officials from the Housing and Urban Development Department as well
as the White House. Its mission would be twofold: 1) To open a direct channel of communication between local and national policymakers about fiscal needs and priorities; and 2) To take a deeper dive into the long-term investment needs of America’s metro regions, with an eye toward reducing geographical inequality.

Investment in city and metro economies is integral to U.S. recovery and growth. Immediate federal aid is essential to replacing lost metro revenues, which will help local governments combat rising Covid-19 infection rates, avoid mass layoffs and maintain vital public services. But Washington and metro leaders also should forge a new partnership aimed at strengthening metro resilience over the long-term, and to enable more of the public innovations that have made local government the most effective, responsive and popular component of American federalism.

Fix Higher Ed’s Broken Model

Posted on August 10, 2020 by The Progressive Policy Institute

The Covid-19 pandemic and recession will leave lasting marks on many major U.S. institutions, and higher education is no exception. Last spring, as most of the economy shut down, America’s colleges and universities also closed their campuses and shifted to online, video-teaching, or some combination of the two.

The experience likely will trigger a searching debate over the relative merits of online versus classroom instruction in higher education. But it already has shown that many U.S. colleges have been resilient enough to deliver a high-quality learning experience amid an unprecedented public health emergency.

If that’s the upside, here’s the downside: Once the pandemic is behind us, there will be fewer schools to welcome students, and fewer families that can afford to send them to college.

Many of America’s colleges and universities have lived on the economic margins for a long time, able to postpone tough budget choices so long as students could get federal loans to finance the rising price of a college education. A 2016 report by Ernst & Young found, there are 800 colleges vulnerable to “critical strategic challenges” because they depend on tuition for more than 85% of their revenue. Already more than 90 colleges have closed in the last three years, according to EducationDive, and that number will likely increase dramatically because of the impact of Covid-19.

The pandemic, in short, may bring to a boil a long-simmering crisis in higher education financing caused by profligate spending and mismanagement. Tuition and fees have skyrocketed since the 1970s, increasing by 2020 percent at private nonprofit four-year schools and 285 percent at four-year public colleges and universities. Though some higher education institutions have frozen or roll-backed tuition because of the pandemic and its impact on family income and savings, many others have marched ahead with their tuition hikes.

As America recovers from the Covid-19 crisis, policymakers and educators should give high priority to fixing higher education’s broken finance model. Building a more resilient education system, where schools are less dependent on tuition to survive and better skilled in providing different modalities of learning, is the key to moving forward.

More specifically, PPI proposes the following reforms:

1. Expand opportunities for qualified applicants at leading universities by creating more high-quality online and virtual courses and degrees. Many of America’s top schools already have significant experience in offering online education (where everything is online, lectures, assignments, readings) and virtual education (remote learning typically by videoconferencing). By combining in person, online, and virtual learning, schools could expand college enrollments by 10 to 25 percent, helping to expand access to America’s best public and private schools. For example, students could take their introductory courses online or virtually, and then shift to in-person classes for their majors. Schools also could offer an online/virtual version of their bachelor’s degree in certain specialties.

2. Cut the cost of higher education. Even before the pandemic, the cost of higher education was reaching a tipping point, with total debt held by students and parents now at half a trillion dollars — more than total credit card debt in America.

Yet despite the warning signs, few schools have made progress toward controlling tuition, much less reducing it. Most university presidents have called for more government aid to students rather than subjecting their institutions to touch-minded fiscal scrutiny and finding ways to cut costs and hold down expenses.

While those who call for the federal government to provide more aid to students are well-intentioned, experience shows that opening the spigots allows colleges and universities to inflate prices even more, thereby eating up most of the additional assistance. A better approach is to use some of the almost $75 billion in direct federal spending on higher education to leverage cuts in college tuition and fees. Schools can bring down the costs of tuition, and federal and state governments should require them to do so as part of any bargain to increase aid. There are a number of ways they can do this:

Reduce Administrative Bloat. As my colleague Ben Ginsberg has noted, over the past 40 years, the growth rate in the number of administrative staff at colleges and universities has been five times that of faculty. Jobs faculty used to do, including admissions, have now become the province of a cadre of overpaid “management” staff who spend days and weeks devising new rules and procedures that stifle creativity and initiative and bloat university budgets. Schools should commit to cutting administrative expenses, including staff, travel, as well as association fees, and salaries of every school leadership position (presidents, provosts, deans, vice deans, associate deans, etc.) by five percent for the next three years.
More Teaching. Teaching loads at research universities have declined almost 50 percent in the past 30 years, according to the American Council of Trustees and Alumni. While university research is often of great societal value, teaching should be given equal if not greater consideration. After all, tuition is the main source of revenue for most colleges and universities. Over the next five years, colleges should require tenured and full-time faculty to teach one additional course per year at the median pay rate for adjuncts –$2700. According to the American Association of University Professors, there are over 52,000 tenured or non-tenured
full-time faculty in the U.S. If each agreed to teach one additional course during the next academic year at 20 students per class, the number of course slots would increase by one million.
Three-Year Degrees. Three-year degree programs are common in much of Europe, and students who graduate with bachelor’s degrees from prestigious institutions such as Oxford, Cambridge, or the London School of Economics typically do so in just three years. Transitioning to a three-year degree system would force U.S. universities to streamline their curricula and cut unnecessary degree requirements that pad educational expenses for students without enhancing the value
of their degree. Making a 3-year bachelor’s degree the norm in the United States as well could cut the cost of tuition, fees, room & board by up to 25 percent. There are a variety of ways schools could shift to three-year degrees. Schools could award course credit (not just course waivers), for Advanced Placement (for students with a score of three or higher), International Baccalaureate, and other college-level coursework completed by students in high school. Schools could also give students credits for work experience and internships even if those jobs paid wages. And universities could create accelerated bachelors/masters programs so that students could earn both degrees within five years rather than in six or seven years as is currently the case.

The coronavirus pandemic has tested our country’s capacity to adapt and improvise in the face of a nationwide quarantine of indefinite duration. So far, many of America’s colleges and universities have stepped up to the challenge by shuttering their on-campus operations and swiftly moving students to virtual education. But others, operating on the slimmest of economic margins, are unlikely to survive the pandemic recession.

To make our higher education system more resilient against future shocks of this kind, lawmakers and educators must now focus on two critical tasks. The first is refining and improving remote learning and striking the right balance between online and classroom instruction. The second is developing a new financing model for higher education, one that makes colleges more cost-effective and affordable, instead of relying on ever-growing public subsidies to chase ever-rising tuition costs.

Make Electoral Democracy More Resilient

Posted on August 10, 2020March 17, 2025 by The Progressive Policy Institute

The COVID-19 pandemic has laid bare the fragility of the United States electoral voting system. Polling places, which are often densely packed indoor spaces, represent an acute public health danger. Yet, many states do not have the infrastructure in place to adapt to this situation, and it has thrown the health of Americans and our democratic institutions into doubt.

Right from the onset of this pandemic, several individuals and organizations raised alarms that the United States’ electoral system would have to radically adapt to coronavirus. Some states took this cue and pushed back their elections to buy time to implement alternative election systems or in hopes that COVID-19 would abate. Several other states, however, did nothing. Florida, which held its Democratic primary on March 17th, experienced a 53% drop in turnout from its turnout in 2016. Illinois which held its primary on the same day, saw a 61% drop in primary turnout.

States are still lagging on providing their residents with ways to vote safely during coronavirus. According to analysis from the Brooking Institute, 32 states received a C grade or lower on their performance providing residents with the ability vote-at-home during the pandemic. Alabama, which received an F grade as of writing, requires voters to have a notary or two witnesses to complete an absentee ballot. Connecticut, which received a D grade as of writing, does not offer no-excuse absentee voting, nor does it accept COVID-19 as a permitted reason to request an absentee ballot.

There is a solution to this dilemma: universal vote-at-home. Registered voters would receive a ballot in the mail automatically, without having to file an application or request one. Unlike traditional election procedures, universal vote-at-home allows Americans to vote from the safety of their households and then to return their ballot by mail or to drop in a secure drop box. This would give Americans the opportunity to carry out their democratic responsibility without putting them in harm’s way. Yet, very few states have the infrastructure currently in place to shift their electoral system to universal vote-at-home. Neither has Congress made this a priority.

Universal vote-at-home is not a novel idea. Five states – Washington, Oregon, Utah, Hawaii and Colorado – currently have the proven capacity to conduct their elections without the need for physical polling locations. Dozens of other states have the proven capacity to allow a significant percentage of their citizens to vote-at-home, and few others have precedence for voting-at-home but only allow it in the most extreme of circumstances.

Congress should incentivize the remaining states to move to a universal vote-at-home model, not only for the upcoming election but for future elections as well. Based on estimates from the Brennan Center for Justice, the cost of expanding vote-at-home to all Americans runs from $982 million to $1.4 billion. While the short-run cost is not insignificant, research has shown that universal vote-at-home reduces the administrative costs related to running elections by 40%. This represents a long-term cost saving for states and all Americans.

Some officials and organizations have alleged that universal vote-at-home is more vulnerable to fraud than in-person voting, but the evidence does not support such claims. The decentralized nature of vote-at-home means that widespread fraud would require infiltrating the foundations of the decentralized electoral network itself, while in-person voter fraud requires only the infiltration of a singular machine or ballot box within a centralized network. The track record of states with vote-at-home proves this point: Oregon, for example, had only 10 instances of voter fraud during the 2016 Presidential election.

In other words, allowing all citizens to vote from home will make our democracy more resistant to fraud as well as more resilient against national emergencies that threaten to impede our citizens’ basic right to vote.

With the evidence stacked against them, Republicans have resorted to other lines of argument to oppose vote-at-home. Sen. McConnell argued during the CARES Act debate that the proposed $2 billion in election grants would “federalize” states’ elections. Only $400 million in election grants were included in the final bill. President Trump also weighed in, saying “Mail ballots, they cheat. OK, people cheat. Mail ballots are a very dangerous thing for this country because there are cheaters” and tweeting “…[MAIL-IN VOTING] WILL ALSO LEAD TO THE END OF OUR GREAT REPUBLICAN PARTY.” This alarmist tweet is not just anti-democratic, but wrong. In a working paper out of Stanford, a team of researchers took advantage of the staggered rollout of vote-at-home in California, Utah and Washington to show that while vote-at-home modestly improved overall election turnout, the additional turnout did not benefit any party disproportionality.

Never has it been more paramount that our democratic institutions preserve their trust between it and the American people. For a small investment – one that will likely pay off in the long-run – Congress can ensure that our elections are safe and secure not just for this November but for generations to come.

Building American Resilience: A Roadmap for Recovery After COVID-19

Posted on August 10, 2020 by The Progressive Policy Institute

For Americans and much of the world, 2020 has been an annus horribilis. Following its outbreak in China late last year, the coronavirus has spread quickly across the main international travel and trade routes. To contain the pandemic, nations have been forced to order mass quarantines, freezing economic activity and social life. It likely will take decades to calculate the full human, economic and psychic costs of this still-unfolding global calamity.

Few countries have been spared the ravages of Covid-19, but no country has been hit harder than the United States. At this writing, coronavirus has killed more than 156,000 Americans, and infected more than 4.6 million. And with the pandemic spreading rapidly across the South, West and Midwest – 39 states report sharp increases in infections – the end is nowhere in sight.

Stay-at-home orders and social distancing have put the world’s biggest economy on life support. After shrinking by 5 percent in the first quarter of 2020, U.S. output plunged by nearly 10 percent in the second quarter. Since March, more than 42 million Americans have filed for unemployment and nearly 20 million are still out of work. As many as 40- percent of the virus-related layoffs could become permanent, according to a University of Chicago study.

Many small businesses have gone under, and millions more are treading water. “Data from credit-card processors suggest that roughly 30 percent of small businesses have shut down during the pandemic,” reports The Atlantic. And many large companies in sectors hit directly by social distancing – travel and tourism, restaurants and hotels, and brick and mortar retail – have announced layoffs and permanent workforce reductions.

The federal government has borrowed and spent prodigiously to combat the virus, put money in peoples’ pockets and keep the economy from cratering. Congress so far has passed three major relief bills and is wrestling over the scope of a fourth. Washington has spent $3 trillion and could be headed toward a staggering annual deficit of $5 trillion or more, the largest since World War II. Amid this unprecedented public health and economic crisis, an old American dilemma – racial injustice – has reared its head. The unconscionable killing of George Floyd, Breonna Taylor and other black Americans by police has triggered widespread public outrage and protests.

THE CRISIS IN U.S. DEMOCRACY

Intensifying all three of these traumatic shocks is a catastrophic failure of national leadership. In past crises, leaders of extraordinary skill and character have arisen to steer our republic through the storm. Not this time. President Donald Trump has run the ship of state aground.

As the coronavirus first appeared, he sought refuge in denial and dissembling. When that did nothing to halt the spread of the virus, he passed the buck to governors and refused to mobilize the full powers of the federal government to supply tests, masks and ventilators, and to help the states set up rigorous contact tracing systems. Learning nothing from his early blunders, Trump has continued to dismiss the severity of the virus, tout phony cures, and demand premature openings of the economy and schools.

Trump’s incompetence cost our country precious weeks when the federal government should have been taking vigorous action to contain the pandemic. The delay was deadly: Had we started social distancing and locking down on March 1 rather than March 14, 54,000 fewer Americans would have died, according to disease modelers at Columbia University.

Elections really do matter. If the United States had elected leaders as capable as those in Germany, South Korea and Japan, many fewer Americans would be getting sick and dying today. And with contact tracing, masks and selective social distancing, we could keep more of our economy up and running.

As demonstrations against police brutality and racial discrimination flare up around the country, Trump again has displayed a perverse talent for inciting social rancor and pitting Americans against each other. He has smeared protesters as “domestic terrorists” and, over the protests of Mayors and Governors, dispatched unbadged federal security guards to put down the phantom threat of mass anarchy in the streets.

Finally, with a crucial national election approaching, Trump is trying to deny Americans the right to vote safely at home. He’s falsely crying fraud to undermine public confidence in the legitimacy of our electoral system, even to the point of issuing a preposterous call to postpone the vote.

No wonder America’s nerves are frayed. At this fateful moment of intersecting crises – threatening our health, prosperity and cultural cohesion – our country is saddled with a dishonest, incompetent and malicious demagogue who specializes in creating chaos rather than solving problems. Here and abroad, the impression is growing that America is becoming a failed state.

DON’T COUNT AMERICA OUT

But that’s wrong. For all our dilemmas, America remains a resourceful and dynamic country capable of swift course corrections. Beneath our fractious politics lies a bedrock of shared belief in liberty, equality and democracy. We also draw strength from a diverse and inventive citizenry jealous of its freedoms. Time and again, this country has shown it can bounce back from adversity stronger than before. Now we have to reinvent ourselves again.

Fortunately, there is a national election this fall. The American people can fire a sham president and his cowed GOP lackeys and replace them with genuine leaders who can unite us and make our democracy work.

But new leaders also need a new vision.
The United States has received a series of extraordinary shocks in this still-young century: the dot-com bust, 9/11, the great recession and financial meltdown of 2007-8, and now coronavirus, a hobbled economy and civil strife over endemic racism.

We’ve learned the hard way that our country needs stronger economic and social shock absorbers. Our challenge isn’t just to recover from the present crisis, but to build a better, more equitable democracy that will be more resilient against future shocks no one can foresee.

Americans have made enormous sacrifices to save lives and keep our health system and economy from collapsing. Many have stood by helplessly as friends and relatives have died lonely deaths in isolation. The psychological toll also has been heavy: Research by The Society for Human Resource Management finds that one in four workers report feeling either hopeless or depressed. If U.S. leaders don’t emerge from this painful period resolved to build a more just and resilient society, this suffering and sacrifice will have been in vain.

CONFRONTING ENTRENCHED INEQUITIES

The fight against Covid-19 has not been borne equally by all Americans. Health care and emergency workers and those in “essential” industries (such as meatpacking and grocery stores) have been exposed to higher risks of falling ill. The chief victims of Covid-19, by far, are older Americans. Thus far, 43 percent of deaths have been linked to nursing homes.

The pandemic also has taken a severe toll on low-income and minority communities, where many suffer from health problems associated with poverty and discrimination. African-Americans are dying from Covid-19 at a rate nearly twice as large as their share of the population. At this writing, blacks (13 percent of the U.S. population) account for 24 percent of all deaths.

The economic pain inflicted by the pandemic also has been unevenly distributed.

The lockdown, in fact, has exposed a new class divide in America. On one side are office workers, mostly college-educated, well-paid and digitally enabled, who have been able to keep working from home, and to have food and other goods delivered to them. On the other side are low-paid service, hospitality and retail workers, who can’t work remotely. Young workers, immigrants and Hispanic workers have been hit hardest by Covid-19 job losses.

Minority-owned businesses, often smaller and more precarious, have been damaged disproportionately by the pandemic. The National Bureau of Economic Research reports that, between February and April, there was a 41 percent decrease in black business owners and a 31 percent decrease in Latinx business owners, compared to an overall decline of 22 percent.

The pandemic also has exposed serious weaknesses in our private economy. Because of offshoring and long supply chains, for example, U.S. factories were unable to supply masks, gowns, gloves and ventilators in a timely way to health care workers desperately battling the virus.

Key public sector systems, long starved of investment and entangled in red tape, also have failed to respond nimbly to the crisis. Archaic computer systems in state Unemployment Insurance offices crashed as applications surged. The Center for Disease Control and Prevention, our front-line agency against pandemics, not only sent out flawed coronavirus tests, but also allowed bureaucratic inertia to delay the production of reliable tests by private laboratories.

Tens of millions of young children and older students have lost months of early learning and classroom instruction as schools of all kinds have closed. Some K-12 school systems used virtual learning to mitigate the loss, but many either did not have that capacity or chose not to use it to avoid discriminating against low-income families without computers or internet access.

Through the free and reduced price lunch and breakfast programs, public schools also play a critical role in feeding needy children. While some schools improvised “grab and go” programs to provide meals to kids, 80 percent report serving fewer meals, and only 22 percent offered meals two days a week. School closings thus have contributed to an upsurge in hunger in poor communities, even as they interrupt all childrens’ education.

A BOLD BLUEPRINT FOR RECOVERY AND RESILIENCE

In contrast to Trump’s “let’s get back to the way things were” message, progressive leaders should offer voters this fall an ambitious vision for America’s economic and social reconstruction. In this report, PPI presents a blueprint for speeding recovery and building a more resilient society. It tackles long-festering social inequities and bolsters the capacities of business and government to perform their vital missions during future pandemics or other national emergencies. Applying what we have learned during the Covid-19 crisis, our scholars and policy experts offer radically pragmatic ideas for change:

• Spur digital manufacturing in America and shorten supply chains for essential goods.

• Launch a “national reemployment” drive to get everyone back to work as soon as conditions allow, and to make work pay.

• Drive down the exorbitant cost of medical care so that we can invest more in healthy communities.

• Create well-paid production jobs and fight climate change by making America number one in electric vehicles.

• Make the social safety net more resilient.

• Forge a new economic security bargain with gig workers.

• Install a “fiscal switch” that allows Washington to automatically stimulate during economic downturns and shrink its debts during expansions.

• Give birth to two million new businesses to replace those that have gone under during the pandemic shutdown.

• Invest in resilient cities and metro regions.

• Fix America’s broken financing model for higher education. • Create a more nimble and accountable K-12 school system.

• Democratize capital ownership and expand national service.

• Replace outdated U.S. immigration laws with a “demand-driven” policy that welcomes more willing workers.

• Make our electoral democracy more resilient by ensuring that every citizen can vote at home.

Find each report of our series, Building American Resilience, below:

INTRODUCTION: BUILDING AMERICAN RESILIENCE

Will Marshall

SPUR DIGITAL MANUFACTURING IN AMERICA

Michael Mandel

GET EVERYONE BACK TO WORK – AND MAKE WORK PAY

Will Marshall

INVEST IN A HEALTHIER AMERICA

Arielle Kane

MAKE AMERICA #1 IN ELECTRIC VEHICLES

Paul Bledsoe

WEAVE A STRONGER SAFETY NET POST-COVID

Crystal Swann

MAKE THE GIG ECONOMY MORE RESILIENT

Alec Stapp, Michael Mandel

CREATE A “FISCAL SWITCH” TO MAKE OUR ECONOMY MORERESILIENT AGAINST RECESSIONS

Ben Ritz

CREATE TWO MILLION NEW BUSINESSES

Dane Stangler

INVEST IN METRO RECOVERY AND RESILIENCE

Crystal Swann

FIX HIGHER ED’S BROKEN MODEL

Paul Weinstein, Jr.

CREATE MORE INNOVATION SCHOOLS

David Osborne

DEMOCRATIZE CAPITAL OWNERSHIP

Jason Gold

SHIFT TO “DEMAND DRIVEN” IMMIGRATION

Dane Stangler

MAKE ELECTORAL DEMOCRACY MORE RESILIENT

Colin Mortimer

Investment Heroes 2020

Posted on July 24, 2020September 18, 2024 by The Progressive Policy Institute

This post has been updated to include additional data, as well as updating our original preliminary estimate of Microsoft’s capital expenditures to reflect their since-released 10-K report.

Given the ongoing pandemic, capital investment is more important than ever before. Hundreds of billions of dollars of investment by broadband providers enabled the U.S. Internet to respond magnificently to soaring demand when the pandemic hit. On the other hand, some of the sectors that have struggled the most—such as medical equipment and supplies and food production and processing—have suffered from a shortfall of investment.

To emphasize the importance of capital spending for wages and growth, each year the Progressive Policy Institute publishes our list of U.S. “Investment Heroes:” the companies who are investing the most in America. Currently, accounting rules do not require companies to report their U.S. capital spending separately. To fill this gap in the data, we created a methodology using publicly-available financial statements from non-financial Fortune 150 companies to identify the top companies that were investing in the United States.

Table 1 below provides the top 25 non-financial companies, ranked by U.S. capital expenditure in the latest fiscal year through June 30, 2020. Table 2 below provides the top 25 nonfinancial non-energy companies, ranked by U.S. capital expenditure in the latest fiscal year through June 30, 2020 (Our methodology is described in last year’s report. In particular, page 15 of that report describes adjustments made for particular companies).

We note that 10 out of the top 11 companies in Table 2 are either broadband providers or tech/ecommerce companies. Out of those ten, the broadband providers invested $52 billion in the United States in their most recent fiscal year, while the tech/ecommerce companies invested $84 billion.

Table 1. U.S. Investment Heroes: Top 25 Nonfinancial Companies by Estimated U.S. Capital Expenditure

Rank

Company

ESTIMATED 2019 U.S. CAPITAL EXPENDITURES (Millions USD)*

Amazon.com

$19,306

AT&T

$18,520

Alphabet

$18,037

Exxon Mobil

$16,580

Verizon Communications

$16,058

Intel

$13,416

Facebook

$12,457

Duke Energy

$11,122

Microsoft

$11,073**

Comcast

$10,467

Chevron

$10,062

Apple

$9,772

Walmart

$7,904

Southern

$7,880

Exelon

$7,248

Charter Communications

$7,195

Ford Motor

$6,414

Energy Transfer

$5,960

Marathon Petroleum

$5,374

Delta Air Lines

$4,936

ConocoPhillips

$4,907

General Motors

$4,899

United Parcel Service

$4,793

FedEx

$4,647

Enterprise Products Partners

$4,532

Top 25 Total

$243,560

*Based on most recent fiscal year as of June 30, 3030

**Originally estimated based on 7/22/20 earnings report.

Revised estimate based on 2020 10-K report

Data: Company financial reports, PPI estimates

Table 2. Non-energy U.S. Investment Heroes: Top 25 Nonfinancial Companies by Estimated U.S. Capital Expenditure

Rank

COMPANY

ESTIMATED 2019 U.S. CAPITAL EXPENDITURES (Millions USD)*

Amazon.com

$19,306

AT&T

$18,520

Alphabet

$18,037

Verizon Communications

$16,058

Intel

$13,416

Facebook

$12,457

Microsoft

$11,073**

Comcast

$10,467

Apple

$9,772

Walmart

$7,904

Charter Communications

$7,195

Ford Motor

$6,414

Delta Air Lines

$4,936

General Motors

$4,899

United Parcel Service

$4,793

FedEx

$4,647

United Continental Holdings

$4,528

American Airlines Group

$4,268

Walt Disney

$4,024

CenturyLink

$3,628

HCA Healthcare

$3,537

Union Pacific

$3,453

Kroger

$3,128

Target

$3,027

CVS Health

$2,457

Top 25 Total

$201,945**

*Based on most recent fiscal year as of June 30, 3030

**Originally estimated based on 7/22/20 earnings report.

Revised estimate based on 2020 10-K report

Data: Company financial reports, PPI estimates

(Analysis by Elliott Long and Michael Mandel).

How Ecommerce Creates Jobs for American Workers and Saves Time for American Families

Posted on July 22, 2020September 18, 2024 by The Progressive Policy Institute

This past weekend a Wall Street Journal piece quoted me on ecommerce jobs:

One economist who has looked at these trends has concluded something surprising: When you include all the jobs in fulfillment, delivery, and related roles, e-commerce has created more jobs between 2007 and January 2020 than bricks-and-mortar retailers lost, says Michael Mandel, chief economic strategist at the Progressive Policy Institute, a think tank. Since January, employment in this sector has fallen, but Dr. Mandel believes that as consumer spending recovers, so will employment in this area.

I thought I would give some of the statistical backup. I calculated total jobs in brick-and-mortar plus ecommerce by adding retail trade, couriers and messengers (NAICS 492)(local delivery) and warehousing and storage (NAICS 493)(ecommerce fulfillment). This total was still rising in early 2020, before the pandemic hit, with the peak coming in January 2020.

Between December 2007, the previous business cycle peak, and January 2020, ecommerce industries created 900K more jobs than were lost in brick-and-mortar retail. We can see the total in this chart.

Total jobs went up because unpaid hours that Americans used to spend driving to the mall, parking, wandering through stores, waiting on line to pay, and driving home are now being transferred to the paid sector.

How many hours are being saved? Each year the BLS does a survey called the American Time Use Survey. It shows that average consumer shopping hours per person, excluding groceries and gasoline, fell by 27%, from roughly 144 hours per year in 2007 to roughly 105 hours per year in 2018. Presumably this decline was driven by ecommerce.

The implication: Summed over the whole U.S. population, ecommerce saved American families 10 billion hours per year in 2018.

The conclusion: More jobs for American workers, more time for American families.

Release: In Gig Economy Space, New Report Shines Light on Regulatory Improvements for Independent Workers

Posted on July 22, 2020 by The Progressive Policy Institute

Independent workers face a dilemma where they cannot currently receive benefit payments from companies without risking their independent status.

WASHINGTON, D.C. – A new report from the Progressive Policy Institute examines the possibility of creating a way to regulate platforms that would preserve the flexible nature of independent workers and the benefits to our economy at large while continuing to protect both workers and consumers. The flexibility of platforms will play a critical role in helping the U.S. labor market recover more quickly from the COVID recession.

The new report finds that companies that do business with independent workers can’t provide benefits because that would turn them into employees, an outcome that the overwhelming majority of these workers do not want. But independent workers providing benefits for themselves incur a much bigger tax burden than they would face as an employee.

Key findings from the report include:

According to a recent report from Edelman Research & Upwork, 51% of respondents said there is no amount of money where they would definitely take a traditional job;
During recessions, unemployment insurance benefits received swell far out of proportion to taxes paid in, as the federal government typically appropriates more money to beef up unemployment insurance;
One estimate from the Berkeley Research Group concluded that switching the status of app-based drivers to full-time employees would reduce the number of drivers by 80 to 90 percent in California.

The new report identifies four prongs in which there is a ‘better way’ to revamp the current system tax treatment for independent workers: straighten out the current tax code, simplify the dividing line, apply a baseline level of benefits, and implement a cafeteria style plan.

Straightening out the current tax code would require independent workers to deduct healthcare and retirement contributions from the earnings calculation for the self-employment tax. In order to simplify the dividing line, an independent worker would have to reach a certain number of hours contracting with a particular company or platform, then the worker would be entitled to a required set of tax-advantaged benefits.

To apply a baseline level of benefits, companies would be able to offer benefits to independent contractors without worrying that they would be reclassified as employees at either the state or federal level. The cafeteria plan would allow independent workers to choose from a variety of pre-tax benefits, including health insurance, paid time off, and retirement savings.

Policy recommendations include:

Construct a new regulatory framework that explicitly recognizes a middle ground of independent workers who can receive benefits from the (multiple) companies they contract with;
Straighten out the tax treatment of benefits so that independent workers are on a level playing field with employees;
Require a baseline level of benefits and protections for independent workers, including a cafeteria style plan;
Install a uniform national standard for determining who is an independent worker.

“A separate and important question is whether the new regulatory regime would be opt-in or mandatory,” said author Michael Mandel, the chief economic strategist at PPI. “If companies do not opt in, they would remain subject to existing legal tests for determining worker classification.”

View the report by clicking here.

Regulatory Improvement for Independent Workers: A New Vision

Posted on July 21, 2020 by The Progressive Policy Institute

One of the biggest productivity advances in recent years has been the use of platforms to connect buyers and sellers at lower cost. Platforms offer less rigid contractual arrangements, expanded earnings opportunities for workers and access to essential goods and services for underserved communities. Overall, platforms generate win-win economic activity which benefits everyone.

The flexibility of platforms will play a critical role in helping the U.S. labor market recover more quickly from the Covid recession. In most economic recoveries, companies have been apprehensive about making the commitment to hire given lingering economic uncertainty. That has typically made employment a lagging indicator in recoveries. By contrast, platforms will make it easier for workers to scale up hours worked gradually as the economy expands, which will boost consumer spending and demand, which will in turn boost employment.

The big question, though, is how to regulate platforms in a way that preserves the flexible nature of the work and the benefits to our economy at large, while continuing to protect both workers and consumers. The Progressive Policy Institute believes strongly in the importance of regulation for a well-functioning market economy. Yet we have long advocated for “regulatory improvement” as essential for accelerating growth and job creation.

Regulatory improvement is very different from deregulation. Too many sectors of the economy have overlapping and contradictory layers of regulation that get in the way of productivity gains and rising incomes. At the same time, there may be parts of the economy where new rules are necessary. In this case, platform businesses need to step up and provide a baseline level of benefits to their workers.

The labor market, in particular, is struggling with a 20th century regulatory framework imposed on a 21st century economic structure. The first 1099 was issued in 1918 and the first W-2 in 1944. To this day the labor market is artificially divided into “employees” and “independent workers”, including freelancers, sole proprietors and other self-employed workers. The dividing line is quite complicated and, in some cases, almost impossible to understand, with different federal and state agencies following different rules for establishing the dividing line. This patchwork of conflicting regulations creates enormous business uncertainty, reducing the incentive to create new work opportunities.

In the current regulatory framework, workers classified as “employees” are subject to a completely different regulatory regime than independent workers, including rules for scheduling and hours worked, working conditions, minimum wages and who pays Social Security and Medicare taxes. Employees are subject to employers’ control in every aspect of how they do the job, which for many low-income workers means shift work tied to a single company, which sets the exact hours. Employees typically get certain benefits, such as workers compensation and unemployment insurance, which are generally paid for by payroll taxes, and possibly access to other benefits, such as group life insurance, defined contribution retirement plans, and employer-sponsored health insurance or health savings accounts (HSAs).

Independent workers have a unique flexibility that employees do not enjoy at all. In the same survey, 51% of respondents said there is no amount of money where they would definitely take a traditional job. Part of the explanation may be that independent contractors simply aren’t able to work under the terms of normal employment; in fact, 46% say they could not have a traditional job due to personal circumstances (e.g., health or caregiving duties).

But in exchange, independent workers, almost by definition, are not allowed to get benefits from the companies that they do business with. As an IRS publication states:

Businesses providing employee-type benefits, such as insurance, a pension plan, vacation pay or sick pay have employees. Businesses generally do not grant these benefits to independent contractors.

Unfortunately, the current tax system systematically penalizes independent workers who try to provide their own benefits and companies that want to help these workers maintain flexibility while accruing appropriate benefits or protections. For example, as we explain below, most independent workers have to pay FICA taxes on the money they contribute to their tax-deferred Individual Retirement Accounts (IRA), Simplified Employee Pensions (SEP) or solo 401k accounts. By comparison, the contribution of employers to employee retirement accounts is exempt from both employer and employee FICA taxes. This saving can be worth thousands of dollars. The same or similar problems show up with other benefits as well.

This puts independent workers into a catch-22 situation. The companies that they do business with can’t provide benefits because that would turn them into employees, an outcome that the overwhelming majority of these workers do not want. But independent workers providing benefits for themselves incur a much bigger tax burden than they would face as an employee.

There are two solutions to this problem for independent workers. One is to double down on the historical dichotomy between employees and independent workers and make the distinction even more rigid. This “Procrustean Bed” solution is best exemplified by which imposes rigid tests on who can be classified as an independent contractor. Basically, it forces companies to turn many of their independent contractors into employees, which would lead to the loss of these workers’ flexibility and control over their hours and who they can work for. In the gig economy space, this would almost certainly mean set schedules and the inability to work on more than one platform. Minimum wage rules and other employment regulations would lead to reduced service at certain times of day or in certain geographical areas.

The other alternative is to improve the position of independent workers by creating a new regulatory regime that extends them important new benefits, while still allowing the flexibility that self-employed workers choose.

This new regulatory regime would have several important features.

It would straighten out the tax treatment of benefits so that independent workers are on a level playing field with employees.
It would require a baseline level of benefits and protections for independent workers, including a cafeteria style plan with a menu of options for workers to choose what makes the most sense for them.
It would have a uniform national standard for determining who is an independent worker. One possibility is that companies would have no control over hours of work, and no non-compete agreements.

A separate and important question is whether the new regulatory regime would be opt-in or mandatory. We lean towards opt-in, as discussed below.

The Structure of Benefits

What benefits are U.S. employers actually paying to their employees? Table 1 below summarizes the distribution of benefits for full-time and part-time workers for the 2018-2019 period, based on BLS data. Note that part-time workers get a significantly small share of their compensation in benefits compared to full-time workers. Moreover, almost half of the benefit “package” for part-time employees comes through the legally mandated “benefits” such as employer tax payments for Social Security and Medicare, much of which independent workers already pay on their own.

In general there are two problems with independent workers providing their own benefits. First, as we will see, the tax laws are written in such a way as to be biased against independent workers compared to employees, especially when the independent workers file on Schedule C. Second, if the businesses hiring the independent workers try to provide benefits, that’s taken as prima facie evidence that the independent workers are really employees, which the overwhelming majority of self-employed workers typically do not desire to be.

Example 1: Retirement Savings

We already mentioned that the current tax system systematically penalizes independent workers who try to provide their own benefits. Let’s begin with retirement. Suppose that an employer wants to contribute $1000 to an employee retirement plan such as a 401k. That employer contribution is deductible from the employer’s business income and does not incur Social Security or Medicare Taxes for either the employer or the employee, as long as certain rules are met.

Now suppose a company gives that $1000 to an independent worker who is filing as a Schedule C sole proprietor or single-person LLC. They deposit the $1000 in their IRA, SEP, or solo 401k account as a tax-deferred retirement contribution. The independent worker gets to deduct this contribution from their federal income tax (line 15 or line 19 on schedule 1).

However, the independent worker has to pay both the employee and employer FICA tax, minus the net impact of the deductibility of the employer share (Schedule SE and line 14 on schedule

1). So, for example, if the independent worker’s marginal federal income tax rate is 22%, they end up paying a bit under 13% on the $1000, rather than 0%.

In other words, the independent worker is penalized on the retirement savings side. And the company can’t offer to bring the independent worker into the company’s plan without classifying the worker as an employee.

Example 2: Healthcare Benefits

A similar disparity holds in the case of healthcare benefits. If an employer contributes $1000 to a health insurance plan for their employee, that contribution is deductible from the employer’s business income and exempt from both employer and employee FICA taxes (within limits). And the contribution does not count towards the employee’s taxable income.

That same $1000, paid directly to the independent worker, can also be used to finance health insurance. In many circumstances, that spending on self-employed health insurance can be deducted from taxable income (Line 16 on schedule 1). However, the independent worker still must pay employer and employee FICA taxes on that $1000, minus the deductibility of the employer share. As before, if the independent worker’s marginal federal income tax rate is 22%, they end up paying just under 13% on the $1000, rather than 0%.

Example 3: Workers’ Compensation

Workers compensation is basically an insurance policy that covers employees for on-the-job accidents or injuries. Workers comp benefits are typically not taxable, and workers comp premiums are deductible from business income. Depending on the particular state, independent workers with no employees are usually not required to purchase workers’ comp for themselves. Such individual policies can be quite expensive, so many independent workers go without. But going without workers comp or occupational accident insurance, runs the risk of being exposed to large medical bills and a significant loss of income if workers are injured on the job. On the other hand, if the company provides worker compensation to an independent worker, that runs the risk of having them reclassified as an employee, which is not the outcome self-employed workers want.

Example 4: Unemployment Insurance

Under ordinary circumstances, the U.S. unemployment insurance system is a fairly small part of benefits. Depending on the year, average state and federal premiums for unemployment in the private sector amounts to between 0.5% and 0.9% of compensation. In 2018—a low-unemployment year–that came to only about $40 billion, on an annual basis. By contrast, unemployment benefits received in 2018 came to only $27 billion. Unemployment insurance premiums are deductible from business income, while unemployment benefits are subject to income taxes but not to FICA taxes.

On the other hand, during recessions, unemployment insurance benefits received swell far out of proportion to taxes paid in, as the federal government typically appropriates more money to beef up unemployment insurance. In 2009 and 2010, for example, unemployment benefits rose to over $130 billion annually. Because of these special payments, unemployment benefits paid out over this last business cycle (2008-2019) exceeded unemployment insurance taxes paid in by more than $100 billion, none of which went to independent workers.

However, the discussion around unemployment insurance for independent workers is different now than it would have been even six months ago. The Pandemic Unemployment Assistance (PUA) covered self-employed workers and small businesses, and showed that it was possible to provide “income insurance” for independent workers in hard times outside of the conventional unemployment insurance structure.

So let’s focus for now on how to provide “income insurance” for independent workers in normal, non-recession circumstances. The key is that independent workers need a cushion not just against economic shocks, but personal shocks such as illness or family needs. One solution is for employers to contribute to a pot of money for the independent worker that could be used for a variety of different purposes. Like unemployment insurance premiums, the contributions to the fund should be tax-deductible.

One variant of income insurance that could apply to independent workers is income averaging for tax purposes. Because of the progressivity of the income tax code, allowing independent workers and employees to average between good years and bad years could significantly reduce the average tax bill, and cushion the effects of fluctuations. Income averaging was available to taxpayers whose income spiked up until 1986, when it was eliminated by that year’s tax reform (it is still available to farmers and fishermen).

The Wrong Approach

The key goal is to make independent workers better off. One potential solution, as noted in the introduction, is to double down on the historical dichotomy between independent workers and employees. California, which went into effect on January 1, 2020, is the exemplar of this approach. This codifies and expands the “ABC test” which says that a worker is an employee unless they meet all of the following conditions: (A) “the individual is free from direction and control,” applicable both “under his contract for the performance of service and in fact,” (B) “the service is performed outside the usual course of business of the employer,” and (C) the “individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”

Under this extremely stringent test, some independent workers would need to be reclassified as employees. This reclassification is incompatible with business models predicated on independent workers, and as a result, many businesses have cut ties with California-based workers or shut down operations in California entirely. Under the new classification, it’s not illegal per se to allow an employee to completely decide which work opportunities to accept and to set his or her own days and hours (without any intervention from the business), but it’s certainly doesn’t fit the way employers typically operate.

As a response to this new law, California independent workers have been laid off en masse. In its news coverage of the passage of AB-5, Vox published an article with the headline “Gig workers’ win in California is a victory for workers everywhere.” Its reaction as a business, however, was quite different. A couple months later, the parent company Vox Media laid off 200 freelance writers right before the holidays (and right before the law went into effect on January 1). Deliv, a Menlo Park-based crowdsourced, crowd-shipping, same-day delivery startup, severed its relationship with 591 drivers a few months after it went into effect. 7-Eleven halted new California franchises. One estimate from the Berkeley Research Group concluded that switching the status of app-based drivers to full-time employees would reduce the number of drivers by 80 to 90 percent in California.

A Better Way

An alternative is to construct a new regulatory framework that explicitly recognizes a middle ground of independent workers who can receive benefits from the (multiple) companies they contract with.

As we noted above, would have to address three main issues.

It would straighten out the tax treatment of benefits so that independent workers are on a level playing field with employees.
It would require a baseline level of benefits and protections for independent workers, including a cafeteria style plan.
It would have a uniform national standard for determining who is an independent worker. One possibility is that companies would have no control over hours of work, and no non-compete agreements.

A separate and important question is whether the new regulatory regime would be opt-in or mandatory. We lean towards opt-in given the wide variety of independent contractor arrangements that exist (e.g., doctors, realtors, etc.). If companies do not opt in, they would remain subject to existing legal tests for determining worker classification.

Note that our proposal is very different from the “marketplace contractor” laws passed in states such as Florida. Such laws merely specify that certain on-demand workers are to be treated as independent contractors. However, they do not fix the federal tax laws that unfairly penalize benefits for independent workers. They also do not specify baseline levels of benefits and protections.

Straightening out the tax code

As documented in this paper, the current tax treatment of benefits systematically favors employees over independent workers. Sole proprietors and single-member LLCs that file via Schedule C pay a substantial tax penalty for attempting to access the same benefits employees get. That needs to be fixed. For example, when a self-employed worker contributes to an SEP, that contribution should be exempt from payroll taxes. The tax fix here would be a simple one, allowing independent workers to deduct healthcare and retirement contributions from the earnings calculation for the self-employment tax.

The companies need to step up here, too. A company should be able to contribute to an independent worker’s retirement or health accounts without triggering additional tax consequences, just as would happen for an employee. This would require a modification to current law governing benefits.

Simplifying the dividing line

The dividing line between independent workers and employees should include whether the company contributes to benefits for the independent worker. To the contrary, in this new category, once a worker reached a certain number of hours contracting with a particular company or platform, the worker would be entitled to a required set of tax-advantaged benefits —for example, portable benefits including paid leave, retirement savings accounts and contributions towards an individual’s health insurance premiums. All workers should be covered by occupational accident insurance for on-the-job injuries. On the other hand, companies would be forced to allow workers in this third category the freedom to choose their hours as well as work for other companies in the same industry. In other words, control over hours or non-compete agreements.

Baseline level of benefits

The exact level of benefits required in the new category would have to be considered carefully. The optimal mix of benefits will create an option that is preferable to current rules for many companies and workers, creating a win-win proposition. The flexibility, in particular, will be attractive to many workers.

We note that it’s especially important to design the benefits package to help low wage workers. For example, one could imagine zero-cost banking as part of the package in order to link the unbanked to the financial system. These zero-cost bank accounts would be designed to be portable and would be subsidized by the companies with which the worker contracts.

Companies would be required to choose, on a year by year basis, whether they treat their independent contractors under this new category. This choice would allow companies to offer benefits to independent contractors without worrying that they would be reclassified as employees at either the state or federal level, while preserving the flexibility and independence that are synonymous with independent contractor status. And independent contractors would be on a level playing field with the tax-advantaged employee benefits.

How the cafeteria style plan would work

The cafeteria plan would allow independent workers to choose from a variety of pre-tax benefits, including health insurance, paid time off, and retirement savings. These benefits would be tied to the individual, not the job, making them truly portable. Plans would be managed by a qualified benefits provider. If an independent contractor ceases work for one company, they do not lose any accrued benefits from that relationship. Companies pay the equivalent of a certain share of the worker’s earnings into a dedicated account for pre-tax benefits. There is no required match from the beneficiary – the cost is fully borne by the business and nothing comes out of workers’ pockets. The independent contractor accrues benefits in proportion to the amount of money earned on the platform.

Independent workers can choose to use these funds towards individual health insurance premiums. They can also choose to add the money toward paid leave or retirement. Individuals access the paid leave benefits by self-certifying that they have experienced a qualifying event, such as falling sick, needing to take care of a family member, or living under a state of emergency. Since there is no separation event for an independent contractor similar to an employee being laid off an employer, there needs to be a cutoff when this short-term insurance plan converts into a cash benefit. For example, at the end of the year, the unused benefit funds could be rolled into a retirement savings account.

In order to prevent a patchwork of state and local laws from developing, the new federal law needs to include preemption. This new regulatory model — in particular the social insurance component — is critical to solving market failures. To take one illustrative example, consider the negative externalities created during a pandemic. In the case of a contagious disease, one individual’s actions (such as wearing a mask) directly affect the likelihood of others getting infected. Similarly, there is a public interest in ensuring independent contractors aren’t financially pressured to work when they’re feeling sick. The government needs to create a new regulatory framework that incentivizes private sector companies to fund benefits programs such as sick leave or paid leave to reduce the recurrent negative spillovers in labor markets.

Cost

Obviously this new regulatory regime extends certain tax breaks now enjoyed by employees to independent workers as well, which incurs some hit to tax revenues. But note that the alternative solution to the independent contractor problem—redefining the dividing line so that more independent workers are reclassified as employees—also incurs a hit to tax revenues. Reclassification of independent workers as employees costs the federal government FICA tax revenues on employer contributions to healthcare and retirement plans. In addition, reclassification significantly reduces the amount of work (and therefore the amount of taxable worker pay) overall.

Consider, for example, business payments for health insurance. As we saw earlier, for independent contractors who file a Schedule C, those health insurance payments can be typically deducted from taxable income, but not from the payroll tax base. By contrast, business payments for health insurance for employees are not subject to the payroll tax. So, legislation that forces independent workers into employee status ends up reducing payroll tax revenues, all other things being equal. This would reduce the public funds available for vital social insurance programs.

This is not a final answer on the cost question, of course. But it does mean to get a good cost estimate, it’s necessary to compare apples to apples. Critically, businesses should incur the full cost of participating in the new framework we are proposing.

Conclusion

Independent workers face a dilemma where they cannot currently receive benefit payments from companies without risking their independent status. Meanwhile, they cannot provide benefits for themselves without being unfairly penalized by the tax code relative to employees.

Previous attempts at the state level to define a new category of “marketplace contractors” has not fixed this dilemma, because they did not address disparities in the tax treatment of benefits. Nor did they create a baseline benefit package that companies must provide.

We suggest that it is possible to design a new regulatory regime that is a win-win proposition. It makes independent workers better off by making it easier for them to either get benefits from a company or provide the benefits for themselves, while still retaining the flexibility that is an essential attraction of independent work for most. At the same time, by allowing companies to opt into this new regulatory regime, it ensures that companies have an alternative to a patchwork of state regulations if they are willing to offer a baseline package of benefits.

The Uneven Distribution of Pain: Healing the Broken Labor Market

Posted on July 6, 2020September 18, 2024 by The Progressive Policy Institute

The Covid recession is the most uneven economic downturn in history. Take a look at the following table, which we calculated from last Thursday’s employment data.

The table compares occupational employment in the second quarter of 2020 with the second quarter of 2019. On the one hand, some occupations, like computer and mathematics-related jobs, have seen a significant employment gain over the past year of almost 10%. On the other hand, food preparation and personal care jobs saw an almost inconceivable plunge in excess of 40%. Production jobs are down more than 20%.

This differential frames the economic task ahead. How can we make sure that these workers, detached from the labor force, can find new jobs quickly when the economy starts to recover? Moreover, many of the businesses where they were formerly employed are likely to have disappeared as the country continues to stagger under the pandemic.

PPI has identified several policy prescriptions that can help. Just to summarize here:

First, policymakers must make it easier for the small businesses that survive to quickly expand to fill the void, especially in the hard-hit restaurant and personal care industries. Elliott Long describes how adopting a “startup tax credit” can help encourage small businesses to grow. Designed like the earned income tax credit, but only for businesses, the startup tax credit helps give small companies a boost in the right direction. In addition, state and local governments need to be wary of regulations that make it harder for companies to expand.

Second, the U.S. has to adopt policies to encourage shorter supply chains and manufacturing entrepreneurship, It should be a national imperative to help small manufacturers adopt digital technologies that make them more flexible and able to compete with foreign suppliers, and then connect them up with larger buyers.

Third, any economic recovery and infrastructure legislation should include large investments in clean manufacturing, as Paul Bledsoe of PPI has advocated in a recent report. That means many more production and construction jobs building electric vehicles, charging stations and other elements of green technology, while upgrading all of our essential infrastructure.

Fourth, digital technologies can help connect up workers with open jobs much faster. We’ll be writing more about that soon.

The UK Online Ad Market

Posted on July 1, 2020September 18, 2024 by The Progressive Policy Institute

Last year I did a paper entitled The Declining Cost of Advertising: Policy Implications. Not surprisingly, I was intrigued by the new report from the Competition and Markets Authority in the UK, entitled Online platforms and digital advertising market study . I’m still going through the report, which exceeds 400 pages, not including multiple appendixes.

But I just want to highlight one important point. The report repeatedly alludes to the impact of advertising on consumer prices for goods and services. For example:

The costs of digital advertising, which amount to around £14 billion in the UK in 2019, or £500 per household, are reflected in the prices of goods and services across the economy. These costs are likely to be higher than they would be in a more competitive market, and this will be felt in the prices that consumers pay for hotels, flights, consumer electronics, books, insurance and many other products that make heavy use of digital advertising.

But here’s the thing—ad spend in the UK, measured as a share of UK GDP, is more or less flat over the past thirty years (chart below). There’s no evidence that the burden on advertisers or consumers has increased because of the arrival of Google and Facebook to the UK ad market. Indeed, it may have gone down a bit, comparing the 1.1% peak in 2019 with the 1.2% peak in 2000, before Facebook existed and when Google advertising was first getting started.

Given how many places ads appear these days, it’s reasonable that advertising in the UK has become much more intensive over time–that is, in real units advertising has grown faster than overall real UK GDP. If so, then the shift to digital advertising has coincided with a fall in the price of advertising relative to other UK goods and services. The easiest interpretation, at least for me, is that advertisers are consistently getting a bigger bang for their buck from digital advertising, without paying more in total.

A Transatlantic Digital Trade Agenda for the Next Administration

Posted on July 1, 2020 by The Progressive Policy Institute

CAN A NEW DEMOCRATIC ADMINISTRATION RECONSTRUCT DIGITAL TRADE POLICY WITH EUROPE FROM THE ASHES OF TTIP?

As the global leader in digital trade, the United States has a big stake in ensuring that international rules facilitating its continued expansion are put in place.

The Obama Administration’s bold agenda to establish these rules across Europe and the Asia-Pacific did not yield lasting success, with the failure of the Transatlantic Trade and Investment Partnership (TTIP) negotiations and the Trump Administration’s withdrawal from the Trans-Pacific Partnership (TPP). Nonetheless, the key elements of US digital trade policy enjoy bipartisan policy support, providing a promising basis for the next Democratic administration to re-engage with Europe, our biggest digital trading partner.

Part 1 of this issue brief explains why international rules are needed to protect and facilitate digital trade. Part 2 describes the turbulent past decade in transatlantic trade relations and the growing importance of US digital trade with Europe. Part 3 explains why the US government and the European Union (EU), during TTIP negotiations, were unable to agree on a digital trade chapter, including a key provision guaranteeing the free flow of data. Finally, Part 4 suggests how two parallel sets of trade negotiations beginning early this year — between the EU and the United Kingdom (UK) and between the United States and the UK — may help a future US Administration end the transatlantic stand-off over digital trade.

1. THE CASE FOR DIGITAL TRADE AGREEMENTS

The United States leads the world in the fast-growing digital economy.1 Digital services include not just information and communications technology (ICT) but also other services which can be delivered remotely over ICT networks (e.g. engineering, software, design and finance).2 Although trade in digital services is hard to measure precisely, there is no mistaking that it has become one of the fastest-growing areas for the United States internationally. In 2017, all types of digital services made up 55% of all U.S. services exports, and yielded 68% of the U.S. global surplus in services trade.3 The beneficiaries of this burgeoning area of trade are not just the U.S. technology giants, but also many smaller and medium-sized companies that develop and sell digital services or use ICT networks for marketing products to consumers.

More than a decade ago, the Office of the US Trade Representative (USTR) recognized the US comparative advantage in digital services trade and began to pursue binding rules with a number of foreign governments. TPP negotiations were the first major step in this direction. The TPP agreement signed by the Obama Administration included provisions designed to protect against practices harmful to digital trade. It prohibited:

Customs duties and other discriminatory measures on digital products like e-books, movies, software and games;
Requirements that data or computing facilities be localized in the foreign jurisdiction;
Discriminatory treatment of crossborder data flows;
Obligations to use local technology, content, or suppliers;
Discriminatory foreign standards or burdensome testing requirements; and
Requirements for disclosing source code and algorithms.

TPP also included facilitative measures:

Requiring governments to adopt measures to protect against on-line fraud and guard consumers’ personal information;
Promoting cooperative approaches to cybersecurity; and
Facilitating the use of electronic authorizations and signatures for e-commerce, electronic payments, and other on-line applications

President Trump’s decision to withdraw the United States from TPP left US digital services companies exposed to these harmful practices in the Asia-Pacific region. From the perspective of liberalizing and expanding US digital trade, it was a spectacular own goal.4 However, USTR quickly set out to partially mitigate its effect by seeking bilateral trade accords with some TPP signatories. Digital chapters in the updated Korea-US Free Trade Agreement (KORUS), the new US-Mexico-Canada Free Trade Agreement (USMCA), and, most recently, the Japan-US Digital Trade Agreement largely duplicate the TPP’s digital trade provisions.

2. THE TRANSATLANTIC TERRIBLE TEENS

Transatlantic trade politics also has seen its share of drama over the past decade. The comprehensive TTIP negotiations begun in 2013 badly backfired. Popular fears of US corporate domination flared across Europe, the EU’s member states failed to back the project enthusiastically, and progress between US and European Commission negotiators on the many subject-matter chapters proved glacial. As the Obama Administration came to an end, TTIP talks were quietly shelved.

The Trump Administration’s trade agenda for Europe has been strikingly different. It has concentrated on rectifying the sizeable US deficit in merchandise trade with the EU, which reached an estimated record high of $168 billion in 2018.5 The President demanded that the EU, which is solely responsible for the bloc’s international trade relations, address the imbalance in such areas as steel, aluminum and automobile trade. (He also somewhat mystified Germany by insisting that it negotiate directly with the United States to reduce the U.S. goods trade deficit.) The US Government determined that a number of jurisdictions including the EU had engaged in trade practices unfair to US steel and aluminum, and imposed higher tariffs on these imported products as a consequence; higher tariffs on European autos so far remain a threat.

In the summer of 2018, European Commission (then-)President Jean-Claude Juncker managed partly to defuse transatlantic tensions by agreeing to negotiate with the United States on increasing EU purchases of US-made industrial goods and on related regulatory standard.

Juncker also committed to greater European purchases of US natural gas and soybeans. Trump in return agreed not to proceed with unilateral tariff increases for the time being. Since the advent of new EU leadership late last year, USTR Robert Lighthizer and his Commission counterpart Philip Hogan have stepped up efforts toward reaching, before the 2020 US presidential election, a limited accord in the areas identified by Trump and Juncker.

Throughout the decade, the volume of goods and services trade across the Atlantic has continued to grow steadily. The United States and the European Union are still each other’s largest trading partners. US goods exports to the EU grew to $293 billion in the first eleven months of 2018, a 13% increase over the previous year.6 US exports of all types of services to the EU reached a record $298 billion in 2017, resulting in a $66 billion surplus in 2017.7 European countries comprise four of the top ten export markets for US services, and in 2017 the Union as a whole absorbed 37% of US services exports.8

Despite the continuing growth in trade, the next Democratic administration will inherit a transatlantic trade policy environment characterized by an unusually high level of tension and distrust. TTIP’s failure appears to have stifled any impulses in Washington and Brussels simply to resume the slog towards a comprehensive trade agreement. Still, there are good reasons for Democrats to not abandon the work begun on digital trade during the TTIP negotiations.

3. THE US DIGITAL TRADE IMPASSE WITH EUROPE

Since Trump’s trade ambitions with the EU remain firmly focused on the goods deficit, the question of whether the United States should resume direct digital services trade negotiating efforts with Europe seems likely to be deferred till the next administration. From an economic perspective, the case for US re-engagement is compelling. In 2017, the United States exported $204.2 billion in digital services to Europe, generating a surplus in this area of more than $80 billion.9 International data flows, measured in terms of capacity for data bandwidth, also are heavily skewed in a transatlantic direction. Cross-border data transfers between the United States and Europe, by this measure, are 50% higher than those between the United States and Asia.10 In sum, the transatlantic area is the world’s largest for digital trade.

During TTIP negotiations, the United States proposed language close to TPP digital trade provisions, but the EU objected to a number of them. One of the most important was a US proposal to guarantee cross-border ‘free flow’ of electronic information for business purposes, and to put bounds on the extent to which European public policy measures relating to personal privacy could serve as an exception to unrestricted data flows.

The United States proposed that public policy exceptions be allowed, but that they be subjected to long-established World Trade Organization (WTO) disciplines. These WTO rules allow for exceptions for legitimate public policy objectives, so long as they do not constitute arbitrary or unjustifiable discrimination or disguised restrictions on trade, and they are narrowly tailored to achieve a public policy objective.11 Alleged breaches could ultimately be addressed through a formal dispute settlement system, if necessary.

The EU regarded the US proposal as an attack upon its unfettered discretion to apply its privacy laws to data moving across the Atlantic, and it rejected the possibility of any discipline based upon WTO rules. The EU’s rejection of objective limits on its potential public policy measures leaves it free to invoke privacy rules as a basis to discriminate against US digital service providers or to protect local competitors. The issue remained firmly deadlocked when TTIP negotiations were set aside.12 Since then, the United States and the EU have not re-engaged bilaterally on digital trade rules.

Both governments are among the eighty countries participating in a low-profile multilateral negotiation on electronic commerce (e-commerce) launched a year ago under WTO auspices, however.13 In Geneva, the United States has tabled a similar proposal to its TTIP and TPP language; the EU so far has not managed to offer a counter-proposal. For the time being, it seems unlikely that the WTO negotiations will yield quick success in settling the disagreement between the EU and the United States and other like-minded countries on regulatory limits to the free flow of data.14

A new Democratic Administration should engage bilaterally with the EU to see if there might be scope for a targeted digital trade agreement, but without softening its insistence on a rigorous free flow of data obligation. Agreeing with the EU on the proper scope for public policy exceptions should not be an impossible task, as WTO rules provide a useful framework. Moreover, it is conceivable that the new leadership of the European Commission at some point will consider jettisoning its insistence on a selfjudging privacy exception, in favor of language more consistent with international trade law.

4. BREXIT AND DIGITAL TRADE

Following Britain’s January 31 departure from the European Union, it now has embarked on the urgent task of negotiating its future economic relationship with the EU. Brexit notwithstanding, the EU will remain the UK’s principal trading partner; 45% of overall UK exports in 2018 were destined for the Continent.15 At the end of 2020, however, if no accord is reached, EU tariffs and quotas on UK exports would revert to much higher WTO tariff levels, which would have a damaging effect on UK-EU trade.

In addition to fixing tariff levels, Britain and the UK also must agree on the extent to which the UK will continue to adhere to EU regulations in a host of areas – for example, workers’ and consumers’ right, the environment, and antitrust. Many observers expect the UK-EU talks on these non-tariff barriers to be difficult and drawn out, likely stretching beyond the 2020 deadline. Despite continuing tough UK rhetoric, the parties may well settle for a ‘phase one’ agreement on goods tariffs, and grant themselves an extension into 2021 or beyond to complete the rest of a comprehensive agreement.

Setting the terms for digital trade with the EU will be particularly important for Britain. UK services exports to the EU yielded a £77 billion surplus in 2018, more than offsetting a deficit in goods trade.16 Approximately three-quarters of Britain’s data flows are with EU countries17, making harmonization with the Continent on privacy regulation crucial for its thriving data-dependent businesses, such as financial services.

In its negotiating mandate for the future economic partnership agreement with the UK, the EU specifically calls for provisions facilitating digital trade, but also indicates an intention to “address data flows subject to exceptions for legitimate public policy objectives, while not affecting the Union’s personal data protection rules.”18 The UK’s counterpart negotiating mandate similarly calls for measures to facilitate the flow of data to and from the EU, and expresses an ambition to go beyond the digital trade provisions in the EU’s trade agreements with other countries.19

The Union previously had pledged to decide before the end of 2020 whether the UK’s postBrexit privacy protections are ‘adequate’ in relation to those on the continent; an adequacy determination would be by far the most favorable and efficient legal basis for data flows across the Channel.20 The EU should have leverage in this separate negotiation, and as a result the UK’s future data protection regime should remain generally close to the EU’s General Data Protection Regulation (GDPR). An adequacy finding is not a foregone conclusion, however, as Britain may be reluctant to alter its wide-ranging surveillance laws.21

The United States is also a very important trading partner for the United Kingdom, accounting for 15% of Britain’s total trade.22 Nearly a fifth of Britain’s exports head across the Atlantic, more than double the share it sends to Germany, its next-biggest trading partner.23 US services trade with the United Kingdom exceeds goods trade, and is growing; US services exports measured $74.1 billion in 2018, generating a surplus of $13.3 billion that year with Britain.24 There are more transatlantic undersea cable connections transmitting data directly between the United States and the United Kingdom than with the rest of Europe combined.25 Foreign affiliates of U.S. multinationals supply more information services in the United Kingdom than in any other European country.26

The Office of the US Trade Representative and the UK Department for International Trade started negotiations on a bilateral trade agreement in May. The United States seeks a comprehensive agreement with the British, including a chapter on digital trade in goods and services and cross-border data flows modeled on the most recent U.S. bilateral successes with other countries.27 The United Kingdom’s negotiating objectives with the United States are broadly consistent with the United States perspective on digital trade.28 They specifically mention the importance of preserving UK data protection rules in an agreement with the United States.29 The United States officially attaches the highest priority to these negotiations and aims to complete them in 2020.30 Privately, US officials acknowledge that the United Kingdom will have to give greater priority this year to redefining its all-important trading relationship with the EU, before US-UK talks can advance definitively.

The most that US and UK trade negotiators may be able to deliver this year is a partial agreement setting tariffs and quotas for goods. A new Democratic administration would be well-advised to build upon whatever progress is achieved with the UK this year, and to give particular priority in the future to agreement on digital trade. The latter could even take the form of a stand-alone agreement on digital trade, as was done in the Japan – United States Digital Trade Agreement, if a comprehensive US-UK trade agreement proves a longer-term prospect.

The United States and the United Kingdom should be able to make rapid progress on many aspects of a digital trade agreement. Historically, both governments have shared a philosophical commitment to open international trading regimes. Both have highly developed digital economies and leading-edge digital services companies. Each favor free data flows and opposes data localization measures. Intangible factors including similar legal traditions also could speed talks.

The long arm of the European Union will constrain the United Kingdom’s negotiating room on digital trade with the United States, however. The EU may insist that, as part of the price for adequacy, the UK agree not to undermine the Union’s position on data flows in any of the UK’s future trade agreements with third countries. The United States, for its part, presumably would take the same position on this issue as it took in TTIP – that legitimate privacy measures are those permitted under WTO principles rather than by EU fiat.

Still, in the short term, the United States may be better off tackling this tough issue with the United Kingdom than seeking to resolve it bilaterally with the EU. The British are in a tough negotiating position: they must find a way forward on data flows with both the EU and a range of important third country trading partners. UK negotiators will need all their creative legal talents to find a way through this intersection of digital trade and privacy law. If they succeed, the payoff in a settled legal landscape for digital trade across both the Channel and the Atlantic eventually could be substantial. Brexit has generated considerable trade uncertainty, but it also ultimately could yield dividends for digital trade.

Congress Should Stabilize The American Economy – Both Now And Later

Posted on June 24, 2020 by The Progressive Policy Institute

At the end of next month, several economic support programs created by the CARES Act in March will expire. House Democrats have moved to extend and expand these supports through January 2021 with the $3 trillion HEROES Act. Senate Republicans, however, have used fiscal cost as a pretext to oppose or scale back this and other potential future stimulus measures. The stakes are high: allowing the CARES Act programs to expire would reduce the incomes of up to 30 million unemployed Americans by more than half overnight and cut off lending programs that have helped otherwise healthy businesses stay afloat during the crisis. Fortunately, there is an opportunity for lawmakers to strike a bipartisan compromise that supports our economy in a fiscally responsible way.

Read the full article here.

America’s COVID-19 Debacle: A Chronology

Posted on June 15, 2020 by The Progressive Policy Institute

Updated on October 21, 2020.

As the coronavirus pandemic enters its 10th month, the United States continues to lead the world in deaths and infection rates. The hard truth is America ranks dead last when it comes to responding effectively to COVID-19.

As of mid-October, more than 222,000 Americans have been killed by the virus, some 70,000 more fatalities than second-ranking Brazil. The United States accounts for about one-fifth of global deaths. We have more than 8.2 million confirmed cases of COVID-19, and the number is rising as the pandemic’s “third wave” spreads throughout the Midwest and mountain West, and in rural America.

Since the United States is rich and technologically advanced, and spends far more than other countries on health care, there can only be one explanation for our abysmal showing against the coronavirus pandemic: An epic failure of political leadership, especially at the top.

The Trump administration’s manifest inability to contain the pandemic has cost tens of thousands of preventable U.S. deaths and prolonged the nation’s worst economic crisis since the Great Depression. More than 50 million Americans have filed for unemployment, countless small businesses have gone under, and national output has plummeted.

COVID-19 deaths have been concentrated among the elderly in nursing homes; front-line health workers and those in “essential” industries like meat packing; and, poor and minority communities where people are more likely to make medical conditions that make them more vulnerable to the virus.

The crisis also has aggravated the nation’s pre-existing economic inequities. Layoffs have been heaviest in low-paid hospitality and service jobs, while many office workers with college degrees have been able to keep working remotely. Even as the economy has contracted, the stock market keeps rising, widening the nation’s wealth gap.

Millions of K-12 students suffered acute learning losses when public schools closed last spring, and many disadvantaged children also lost access to school meals. Many schools remain closed this fall, putting a heavy burden on parents forced to stay home to look after their kids and help them keep up with their studies online.

No one expected the United States to escape the ravages of COVID-19 unscathed. But the enormous scale of our human and economic losses was not inevitable. Other countries have managed the COVID-19 crisis far more effectively. For example, South Korea, which reported its first case of infection on the same day as the United States, reports less than 400 deaths and about 22,000 cases.

In fact, the COVID-19 crisis has posed a kind of “governance stress test” to countries around the world. It is casting a remorseless light on the quality of each country’s political leadership and the competence of its national government.

Comparing America’s performance with that of other countries, the political scientist Francis Fukuyama concludes that President Donald Trump proved incapable of rising to the challenge:

“It was the country’s singular misfortune to have the most incompetent and divisive leader in its modern history at the helm when the crisis hit, and his mode of governance did not change under pressure. Having spent his term at war with the state he heads, he was unable to deploy it effectively when the situation demanded. Having judged that his political fortunes were best served by confrontation and rancor than national unity, he has used the crisis to pick fights and increase social cleavages. American underperformance during the pandemic has several causes, but the most significant has been a national leader who has failed to lead.”

Now, with an eye to this November’s election, President Trump and his party seek to convince Americans the debacle they have been witnessing throughout 2020 is a mirage. In a surreal spectacle, speaker after speaker in the Republican National Convention extolled Trump’s “decisive action” against COVID-19, while Trump himself bragged about ordering an “unprecedented national mobilization” against the “China virus.”

In fact, the mobilization of national will and resources our country needed never happened. The president’s negligence and disdain for taking elementary precautions against the disease, like wearing a mask, has contributed to outbreaks in the White House itself, infecting him and his family and many top staffers.

Even now, with the rate of infection surging again, it’s painfully clear that President Trump has no plan to contain the disease. Instead he’s fighting it with happy talk and promises that a vaccine is just around the corner. He and his party have given higher priority to adding another conservative Supreme Court justice than to passing a major COVID-19 relief bill to check the disease, boost our sputtering economy and maintain unemployment benefits.

The Progressive Policy Institute believes the 2020 presidential election should be a referendum on Donald Trump’s handling of the gravest national crisis he has faced as president. To help voters distinguish fact from fiction, PPI has assembled this comprehensive chronology of key events and milestones in the COVID-19 crisis. As it continues to unfold, we will update this instant historical record as necessary. If readers think we have missed any important events or information, please notify Kate Hinsche at khinsche@ppionline.org.

*Note: The main source for each entry can be found by clicking on the date.

COVID-19: Chronology of a Debacle

2017

JANUARY 12 – Speaking at Georgetown University, Dr. Anthony Fauci, Director of the National Institute on Allergy and Infectious Diseases, urges the incoming Trump administration to be prepared for outbreaks of viral diseases. “If there’s one message that I want to leave with you today based on my experience, it is that there is no question that there will be a challenge to the coming administration in the arena of infectious diseases.”

JANUARY 13 – Outgoing Obama administration officials run a crisis simulation for President-elect Trump’s national security team on how to react to the outbreak of a deadly respiratory disease. The incoming administration is also given a 69-page playbook with best practices for handling global pandemics.

MAY 11 – Dan Coats, Director of National Intelligence, reports to Congress about threats to the United States, including global pandemics.

MAY 27 – In his first budget, President Trump proposes a $1.3 billion cut in the Center for Disease Control (CDC) for 2018. In each year of his presidency, President Trump has proposed similar cuts to the CDC’s funding. (2019) (2020) (2021)

2018

FEBRUARY 13 – DNI Coats again warns Congress about the threat of a global pandemic.

APRIL 10 – Tom Bossert, White House homeland security advisor, resigns at the request of National Security Advisor John Bolton. Bossert had repeatedly called for a comprehensive biodefense strategy against pandemics and biological attacks.

MAY 7 – Speaking at Emory University to mark the 100th anniversary of the 1918 influenza pandemic, Luciana Borio, the National Security Council’s Director of Medical and Biodefense preparedness, warns “The threat of pandemic flu is the number one health security concern. Are we ready to respond? I fear the answer is no.”

MAY 8 – President Trump calls for cuts in emergency funds for Ebola and other pandemics, as well as the State Department’s Complex Crisis Fund for “emerging or unforeseen crises.”

MAY 10 – As part of his effort to “streamline” the National Security Council, Bolton disbands the Directorate for Global Health Security and Biodefense and removes its director, Rear Admiral Timothy Ziemer.

OCTOBER 19 – “In a move that worries public health experts,” the New York Times reports, “the federal government is quietly shutting down a surveillance program for dangerous animal viruses that someday may infect humans.”

2019

JANUARY 29 – DNI Coats again warns Congress that the United States remains “vulnerable to the next flu pandemic or large scale outbreak of a contagious disease that could lead to massive rates of death and disability, severely affect the world economy, strain international resources, and increase calls on the United States for support.”

JULY 28 – DNI Coats, who had publicly differed with President Trump over Russia’s interference in the 2016 election, steps down.

SEPTEMBER 15 – The President’s Council of Economic Advisers (CEA) warns that an influenza pandemic could cause enormous health and economic losses.

OCTOBER 1 – The Department of Health and Human Services (HHS) issues a draft report on a series of exercises code-named “Crimson Contagion.” The report warns that the federal government is “underfunded, underprepared and uncoordinated” to fight an influenza pandemic.

DECEMBER 31 – China reports the outbreak of the novel coronavirus (COVID-19) to the World Health Organization.

2020

JANUARY

JANUARY 6 – The CDC issues a travel notice for Wuhan, China following reports of the outbreak of a new infectious disease.

JANUARY 10 – Chinese state media reports first death in China due to the novel coronavirus.

JANUARY 18 – HHS Secretary Alex Azar warns President Trump of the possibility of a pandemic stemming from the outbreak in China.

JANUARY 21 – The CDC reports the first coronavirus case in the United States: An unidentified Washington State man, in his early 30s who recently had traveled to Wuhan.

JANUARY 22 – In an interview in Davos, Switzerland, President Trump dismisses concerns about the coronavirus, saying “We have it totally under control.”

JANUARY 22 – White House officials turn down an offer to buy millions of N95 masks manufactured in America, according to the manufacturer.

JANUARY 24 – President Trump congratulates Chinese President Xi on his handling of the outbreak in Wuhan, tweeting: “The United States greatly appreciates their efforts and transparency.”

JANUARY 29 – White House advisor Peter Navarro circulates a memo outlining the risks of coronavirus contagion. It estimates that, in a worst-case scenario, a pandemic could claim up to 500,000 U.S. lives and cost close to $6 trillion.

JANUARY 30 – Amid serious outbreaks in Italy and China, the World Health Organization (WHO) declares COVID-19 a global public health emergency.

JANUARY 30 – HHS Secretary Azar again warns President Trump of the possibility of a pandemic. The New York Times reports, “Mr. Azar was blunt, warning that the virus could develop into a pandemic and arguing that China should be criticized for failing to be transparent.”

JANUARY 30 – In a press conference, President Trump assures Americans have little to worry about: “We think we have it very well under control. We have very little problem in this country at this moment — five — and those people are all recuperating successfully.”

JANUARY 31 – President Trump issues an executive order ostensibly banning travel to and from China.

FEBRUARY

FEBRUARY 2 – “We pretty much shut it (coronavirus) down coming in from China,” President Trump tells Fox News’s, Sean Hannity.

FEBRUARY 6 – COVID-19 claims its first U.S. victim: Patricia Dowd, 57, of Santa Clara, California. This fact isn’t disclosed until after an April 21 autopsy.

FEBRUARY 8 – Labs receiving coronavirus tests from the CDC start to complain that they don’t work properly. The problem isn’t resolved until weeks later when the FDA waives rules against tests developed elsewhere.

FEBRUARY 10 – President Trump continues to express confidence in China’s management of the pandemic. He tells governors at the White House that President Xi of China feels “very confident” because “by April or during the month of April, the heat, generally speaking, kills this kind of virus.”

FEBRUARY 23 – Navarro sends a second memo to President Trump, warning of the “increasing probability of a full-blown COVID-19 pandemic that could infect as many as 100 million Americans, with a loss of life of as many as 1-2 million souls.”

FEBRUARY 24 – “The Coronavirus is very much under control in the USA,” President Trump tweets.

FEBRUARY 26 – President Trump introduces the White House coronavirus task force, even while continuing to minimize the danger: “The flu, in our country, kills from 25,000 people to 69,000 people a year… And again, when you have 15 [COVID-19 victims], and the 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done.”

FEBRUARY 27 – “It’s going to disappear. One day it’s like a miracle, it will disappear,” President Trump declares in a White House briefing with African American leaders.

FEBRUARY 29 – Stung by criticism of White House inaction, President Trump tells the press: “We’ve taken the most aggressive actions to confront the coronavirus. They are the most aggressive taken by any country and we’re the number one travel destination anywhere in the world, yet we have far fewer cases of the disease than even countries with much less travel or a much smaller population.”

MARCH

MARCH 1 – First reported U.S. COVID-19 death in Washington State. The unidentified patient was a man in his 50s with serious health problems.

MARCH 2 – President Trump predicts that a COVID-19 vaccine is imminent. “I’ve heard very quick numbers, that of months.” This contradicts Dr. Fauci’s repeated warnings that a vaccine may not be available for a year or a year and a half.

MARCH 6 – At a press briefing, President Trump boasts about his understanding of the coronavirus: “I like this stuff. I really get it. People are surprised that I understand it. […] Every one of these doctors said, ‘How do you know so much about this?’ Maybe I have a natural ability.”

MARCH 6 – “Anybody that wants a test can get a test,” President Trump asserts after touring the CDC headquarters in Atlanta.

MARCH 6 – The Coronavirus Preparedness and Response Supplemental Appropriations Act — Congress’s first response to the pandemic — becomes law. It provides $8.3 billion in emergency funding for federal agencies to combat coronavirus.

MARCH 9 – In a tweet, President Trump again compares COVID-19 to the flu: “So last year 37,000 Americans died from the common Flu. It averages between 27,000 and 70,000 per year. Nothing is shut down, life & the economy go on. At this moment there are 546 confirmed cases of CoronaVirus, with 22 deaths. Think about that!”

MARCH 10 – Following a meeting with Republican Senators, President Trump again praises his administration’s handling of COVID-19: “It hit the world. And we’re prepared, and we’re doing a great job with it.”

MARCH 10 – In a televised address to the nation, President Trump asserts, inaccurately, that Americans won’t have to pay for COVID-19 treatment.

MARCH 11 – In a press briefing, President Trump again downplays the danger of COVID-19. “The vast majority of Americans, the risk is very, very low. Young and healthy people can expect to recover fully and quickly if they should get the virus.”

MARCH 11 – President Trump announces increased travel restrictions for 26 European countries. In practice, however, the order is riddled with loopholes that create long lines for some and zero screening for others.

MARCH 11 – WHO upgrades COVID-19 from a public health emergency to a global pandemic.

MARCH 11– News reports say that the United States has tested just over 7,000 people for the coronavirus, compared to 222,395 tests conducted in South Korea. Both countries reported their first COVID-19 case on the same day.

MARCH 13 – Asked by a reporter if he would “take responsibility for the failure to disseminate larger quantities of tests earlier,” President Trump replies, “I don’t take responsibility at all.”

MARCH 15 – 33 states plus the District of Columbia close their public schools.

MARCH 16 – President Trump announces self-isolation guidelines for Americans to follow for the next 15 days.

MARCH 16 – President Trump denies understating the danger of COVID-19: “I’ve always known this is a real — this is a pandemic. I felt it was a pandemic long before it was called a pandemic.”

MARCH 17 – U.S. COVID-19 death toll exceeds 100.

MARCH 18 – Congress passes a second relief bill, the Families First Coronavirus Response Act. It provides close to $3.5 billion for coronavirus testing, 14-day paid leave for workers affected by the pandemic, and removes work requirements for food stamps.

MARCH 19 – President Trump touts, without evidence, chloroquine, and hydroxychloroquine as a potential cure to COVID-19.

MARCH 22 – In a flurry of tweets, President Trump voices frustration over governors’ handling of the pandemic. The public, however, expresses far more confidence in their governors than the president in national polls.

MARCH 23 – The first nine states implement stay-at-home orders (Washington, Oregon, California, Louisiana, Illinois, Ohio, New York, Massachusetts, and New Jersey).

MARCH 23 – The media reports that 48 states plus the District of Columbia have closed their public schools for the rest of the academic year.

MARCH 24 – In the daily coronavirus task force briefing, President Trump imagines the U.S. economy reopening in a matter of weeks: “I would love to have the country opened up and just raring to go by Easter… I think Easter Sunday — you’ll have packed churches all over our country.”

MARCH 25 – In the daily briefing, President Trump claims the United States leads the world in testing. “We have tested, by far, more than anybody…There’s nobody even close. And our tests are the best tests.” On a per-capita basis, however, the United States ranks low on tests.

MARCH 25 – U.S. COVID-19 death toll passes 1,000.

MARCH 26 – Twelve more states implement stay-at-home orders (Idaho, Colorado, New Mexico, Michigan, Wisconsin, Kentucky, Indiana, West Virginia, Hawaii, Connecticut, Vermont, and Delaware).

MARCH 26 – U.S. cases surge to 82,404, overtaking both Italy and China to make America the world’s leader in reported COVID-19 infections.

MARCH 27 – Congress passes its third and largest aid bill, the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act provides $2 trillion to aid businesses and workers, procure medical supplies and equipment, and expand Unemployment Insurance.

MARCH 28 – In signing the CARES Act, President Trump claims that the Inspector General charged with oversight of the bill requires his permission before reporting to Congress.

MARCH 30 – Nine more states implement stay-at-home orders.

MARCH 31 – President Trump concedes that COVID-19 “is not the flu. It’s vicious. When you send a friend to the hospital… And you call up the next day, ‘how’s he doing?’ And he’s in a coma? This is not the flu.”

MARCH 31 – U.S. COVID-19 death toll surpasses 5,000.

APRIL

APRIL 3 – President Trump tells the public that COVID-19 is retreating. “I said it was going away – and it is going away.”

APRIL 3 – New York City COVID-19 deaths surpass the number of Americans killed on 9/11.

APRIL 3 – The U.S. Chamber of Commerce reports that 24% of small businesses have closed due to the coronavirus lockdown and predicts another 40% could close soon.

APRIL 3 – In response to the CDC’s recommendation that Americans wear facial masks, President Trump declines to lead by example, saying, “I don’t think I’m going to be doing it.”

APRIL 4 – U.S. COVID-19 death toll passes 10,000.

APRIL 6 – Twelve more states issue stay-at-home orders, bringing the total number to 42.

APRIL 6 – The United States overtakes Spain’s COVID-19 death toll with 13,298 fatalities, the second-highest in the world behind Italy.

APRIL 7 – President Trump ousts Glenn Fine, the DOD Inspector General picked to oversee the implementation of the CARES Act.

APRIL 9 – The United States overtakes Italy’s COVID-19 death toll with 19,802 fatalities, becoming the world leader in COVID-19 mortality.

APRIL 14 – President Trump halts America’s contribution to WHO funding and calls for an investigation into the agency’s role in ”severely mismanaging and covering up the spread of the coronavirus.”

APRIL 14 – U.S. COVID-19 death toll passes 30,000.

APRIL 17 – In a series of tweets, President Trump encourages protests against Democratic governors’ social distancing restrictions: “LIBERATE MICHIGAN,” “LIBERATE MINNESOTA,” “LIBERATE VIRGINIA.

APRIL 17 – The BLS reports that national unemployment grew 0.9% in March, to 7.4 million unemployed or 4.4%.

APRIL 19 – U.S. COVID-19 death toll passes 40,000.

APRIL 21 – Tests from autopsies performed in early February come back positive for coronavirus, revealing COVID-19 deaths before the CDC reported the first U.S. fatality on March 1.

APRIL 21 – The White House removes Rick Bright, Director of the Biomedical Advanced Research and Development Authority (BARDA). Bright had said the president’s claims for the curative powers of chloroquine and hydroxychloroquine “clearly lack scientific merit.”

APRIL 23 – In a fourth relief bill, Congress approves $484 billion in additional funding for small businesses, hospitals, and coronavirus testing.

APRIL 23 – President Trump is widely ridiculed for musing in a task force briefing that COVID-19 might be treatable with disinfectants and sunlight. “I see the disinfectant, where it knocks [the virus] out in a minute… is there a way we can do something like that, by injection inside or almost a cleaning?”

APRIL 24 – Georgia becomes the first state to start lifting restrictions and reopening some businesses.

APRIL 28 – U.S. COVID-19 death toll surpasses the official tally (58,300) of Americans who died in the 1955-1975 Vietnam War.

APRIL 29 – The Bureau of Economic Analysis reports that the U.S. economy shrank at an annual rate of 4.8% in the first quarter of 2020.

MAY

MAY 1 – President Trump announces his intention to replace Christi Grimm, the Inspector General of HHS, who released a late April report documenting shortages of medical supplies and testing delays.

MAY 4 – Media reports say that almost 20 states have begun to lift social distancing restrictions.

MAY 5 – Trump announces he’ll wind down the coronavirus task force by the end of May so that the White House can focus on restarting the economy.

MAY 5 – U.S. COVID-19 death toll passes 70,000.

MAY 6 – President Trump again expresses impatience about opening the economy. “We can’t have our whole country out. We can’t do it. The country won’t take it. It won’t stand it. It’s not sustainable.”

MAY 10 – Two White House employees test positive for COVID-19.

MAY 11 – The BLS reports that the unemployment rate in April has ballooned to 14.7% with 20.5 million unemployed, much higher than at the peak of the 2008 Great Recession.

MAY 11 – President Trump castigates Pennsylvania Gov. Tom Wolf for “moving slowly” to reopen his state as protestors rally.

MAY 18 – President Trump admits he has been taking daily doses of hydroxychloroquine, which has yet to be proven effective and may even be harmful to those who contract coronavirus.

MAY 21 – President Trump, after conducting a Michigan factory tour without a face mask, explains, “I wore one in this back area, but I didn’t want to give the press the pleasure of seeing it.”

MAY 26 – U.S. COVID-19 death toll passes 100,000.

MAY 26 – 36 states have reopened or are in the process of reopening.

MAY 28 – The total number of new jobless claims surpasses 40 million.

JUNE

JUNE 2 – Trump suggests GOP move convention to Jacksonville, FL after N.C. Gov. Roy Cooper refuses to allow packed arenas.

JUNE 3 – According to a new study from the University of Minnesota, the malaria drug hydroxychloroquine does not prevent people from contracting COVID-19.

JUNE 6 – 35.4 million Americans are receiving unemployment benefits.

JUNE 8 – Following an easing of lockdown conditions in many parts of the country, infections are rising in 21 states.

JUNE 11 – U.S. COVID-19 cases surpass two million.

JUNE 11 – News outlets report that more than 20 European countries have reopened their schools. Most U.S. schools remain closed.

JUNE 16 – In an op-ed, Vice President Mike Pence dismisses reports about a “second wave” of coronavirus infections and boasts that the Trump administration is “winning the fight against the invisible enemy.”

JUNE 17 – Vice President Pence tells governors that an apparent rise in U.S. coronavirus outbreaks stems from an increase in testing.

JUNE 19 – Gov. Andrew Cuomo wraps up 111 consecutive days of widely praised coronavirus briefings as COVID-19 hospitalizations in New York have dropped below 1,000 for the first time since March 18.

JUNE 19 – Nine Texas mayors write a letter to the states’ residents, urging them to wear masks. Coronavirus cases in Texas continue to surge and the number of hospitalizations has been climbing since May.

JUNE 20 – Disregarding warnings from administration health officials against large public gatherings, Pres. Trump resumes mass campaign rallies in Tulsa, with 6,200 people in attendance.

JUNE 21 – President Trump complains that more COVID-19 testing is increasing the number of confirmed U.S. cases. “When you do testing to that extent, you’re going to find more people, you’re going to find more cases, So I said to my people, ‘Slow the testing down, please’,” he says at the Tulsa rally.

JUNE 22 – Two members of President Trump’s campaign advance team, who attended Trump’s rally in Oklahoma, test positive for coronavirus.

JUNE 22 – New data confirms that COVID-19 cases are growing in 29 states.

JUNE 23 – President Trump again insists that more tests are to blame for the increase in coronavirus infections.

JUNE 23 – At a Congressional hearing, Dr. Fauci says U.S. health officials see a “disturbing surge” of infections in some parts of the country, as Americans ignore social distancing guidelines.

JUNE 23 – Texas tallies more than 5,000 new cases in a single day for the first time. “The coronavirus is serious. It’s spreading,” Texas Gov. Greg Abbott told a local television station.

JUNE 23 – President Trump addresses a crowd of student supporters at a tightly packed megachurch in Phoenix. Trump appeared without a mask, flouting a Phoenix rule that came into force less than 72 hours earlier.

JUNE 26 – VP Pence’s Coronavirus task force hails states for “safely and responsibly” reopening their economies. Yet Texas and Florida officials reimpose restrictions on bars and restaurants amid record levels of new cases and tightening hospital capacity.

JUNE 30 – The E.U. bloc will allow visitors from 15 countries, but the U.S., Brazil and Russia were among the notable absences from the safe list.

JUNE 30 – New York Times data confirms 40,041 U.S. COVID-19 cases.

JULY

JULY 2 – Daily number of new COVID-19 cases in the U.S. tops 50,000 for the first time, the largest single-day total since the start of the pandemic.

JULY 2 – The unemployment rate declines by 2.2 percentage points to 11.1 percent, and the number of unemployed persons falls by 3.2 million to 17.8 million.

JULY 2 – GOP 2012 presidential candidate Herman Cain is hospitalized with COVID-19 a week after attending the Trump rally in Tulsa, where many attendees were not wearing masks.

JULY 5 – President Trump dismisses the impact of COVID-19 and says that while the testing of tens of millions of Americans had identified many cases, “99 percent” of them were “totally harmless.”

JULY 7 – Pres. Trump insists U.S. colleges and universities should remain open for the fall semester, citing several European school openings, “We’re very much going to put pressure on governors and everybody else to open the schools, to get them open.”

JULY 8 – The U.S. reports more than three million coronavirus cases, with all but a handful of states struggling to control outbreaks of COVID-19.

JULY 10 – The United States reports 68,000 new cases, setting a single-day record for the seventh time in 11 days.

JULY 10 – Hong Kong shuts down its school systems, reporting more than 1,400 cases and seven deaths.

JULY 11 – Disney World reopens its gates in Orlando, Florida.

JULY 11 – President Trump appears with a face mask for the first time in public, five months after administration officials recommended that all Americans wear face masks in public.

JULY 12 – Florida reports a record 15,300 new coronavirus cases, by far the most any state has experienced in a single day.

JULY 13 – The media reports that at least 5.4 million Americans have lost their health insurance during the pandemic.

JULY 13 – In an apparent attempt to undermine Dr. Fauci’s credibility, a White House official releases a statement saying that “several White House officials are concerned about the number of times Dr. Fauci has been wrong on things.”

JULY 17 – India reports one million coronavirus cases and 25,000 deaths. Researchers at MIT estimate that by the end of 2021, India could have the world’s worst outbreak.

JULY 17 – Israeli Prime Minister Benjamin Netanyahu announces new restrictions on gyms, restaurants and beaches.

JULY 19 – During a Fox News interview, President Trump again asserts COVID-19 is going to disappear, “I think we’re gonna be very good with the coronavirus. I think that at some point that’s going to sort of just disappear.”

JULY 20 – U.K.’s Oxford University COVID-19 vaccine shows positive results in first phase of human trials.

JULY 21 – European Union leaders agree on a $857 billion spending package to rescue their economies from ravages of COVID-19.

JULY 21– At his first coronavirus-related news conference in weeks, President Trump admits that COVID-19, “will probably, unfortunately, get worse before it gets better. Something I don’t like saying about things, but that’s the way it is.”

JULY 23 – U.S. surpasses 4 million reported coronavirus cases

JULY 23 – Trump cancels Republican convention activities in Jacksonville.

JULY 30 – Second-quarter GDP plunges by worst-ever 32.9% amid virus-induced shutdown.

JULY 30 – Herman Cain succumbs to COVID-19.

AUGUST

AUGUST 3 – Trump criticizes Deborah Birx after she warns the U.S. that the coronavirus outbreaks are “extraordinarily widespread.”

AUGUST 5 – Twitter temporarily restricts the Trump campaign’s ability to tweet false COVID-19 claims.

AUGUST 6 – U.S. records more than 52,000 new COVID-19 cases and 1,388 virus-related fatalities.

AUGUST 6 – Ohio Gov. Mike DeWine tests positive for the coronavirus.

AUGUST 26 – Under pressure from the White House, the CDC issues new guidance saying that people who do not exhibit symptoms after being exposed to someone with coronavirus, “do not necessarily need a test.”

SEPTEMBER

SEPTEMBER 9 – Media reports revelations from Bob Woodward’s new book Rage that President Trump purposely minimized the dangers posed by the coronavirus: “I wanted to play it down. I still like playing it down because I don’t like to create panic,” Trump told Woodward.

SEPTEMBER 9 – “The president never downplayed the virus,” White House press secretary Kayleigh McEnany tells the media.

SEPTEMBER 12 – Media reports that Michael Caputo and Paul Alexander, Trump-appointed officials at the Health and Human Services Department, pressured CDC to “revise, delay and even scuttle weekly reports on the coronavirus that they believed were unflattering to President Trump.”

SEPTEMBER 16 – Caputo takes a leave of absence from HHS after posting a Facebook video accusing government scientists of working to defeat President Trump. Alexander announces his departure from HHS.

SEPTEMBER 18 – Olivia Troye, a top adviser to Vice President Pence and member of the White House coronavirus task force, says the task force recognized by mid-February that the virus posed a big threat to the United States. “But the President didn’t want to hear that, because his biggest concern was that we were in an election year.”

SEPTEMBER 18 – CDC reverses its August 26 guidance and encourages people exposed to someone with coronavirus to get tested, whether they show symptoms or not.

SEPTEMBER 22 – The U.S. COVID-19 death toll passes 200,000, accounting for 21% of global deaths.

SEPTEMBER 25 – The number of confirmed U.S. cases passes seven million.

SEPTEMBER 28 – Twenty-one states report increases in cases as health experts warn of a surge in fall pandemic surge.

SEPTEMBER 29 – Seven former commissioners of the federal Food and Drug Administration accuse the Trump administration of distorting science and “eroding public confidence” in the agency.

SEPTEMBER 30 – Olivia Troye tells NPR that CDC Director Robert Redfield has faced “very challenging dynamics, at times when you’re changing the wording and guidances to fit a narrative, to play down the severity of the virus or cases.”

SEPTEMBER 30 – In the same interview, Troye says President Trump’s refusal to wear a mask in the White House sets the tone for staff: “Even in the West Wing, …you were looked down upon when you would walk by with a mask.”

OCTOBER

OCTOBER 1 – White House communications director Hope Hicks tests positive for the coronavirus.

OCTOBER 1 – President Trump hosts a post-debate fundraiser at his golf club, where few attendees wear masks.

OCTOBER 2 – President Trump and First Lady Melania Trump test positive for COVID-19. Later that day the president is taken to Walter Reed National Military Medical Center.

OCTOBER 2 – Media reports that the official U.S. unemployment rate fell to 7.9% in September. However, the labor force participation was 61.3%, two points lower than in February.

OCTOBER 4 – President Trump temporarily leaves Walter Reed Hospital for a car ride by supporters stationed outside the hospital.

OCTOBER 5 – Several Secret Service agents anonymously criticize the president’s “joyride,” saying it exposed members of his security disease to the virus. “He’s not even pretending to care now” said one agent. Said another, “That should never have happened. The frustration with how we’re treated when it comes to decisions on this illness goes back before this though. We’re not disposable.”

OCTOBER 5 – President Trump’s medical team confirms that he will be returning to the White House this afternoon. “Feeling really good! Don’t be afraid of Covid,” the president tweets.

OCTOBER 5 – A Cornell University study identifies President Trump’s Twitter feed as the “single largest” transmitter of false information about COVID-19. Graham Brookie, Director of the Atlantic Council’s Digital Forensic Research Lab, reaches a similar conclusion: “There is no doubt that Donald Trump is by far the largest spreader of specific and important types of misinformation today.”

OCTOBER 6 – Stephen Miller, President Trump’s top immigration policy adviser, tests positive for COVID-19.

OCTOBER 6 – The stock market plunges after President Trump tweets that he has instructed his representatives to cease negotiations with Democrats on a new COVID-19 relief and stimulus bill.

OCTOBER 6 – NIH scientist Rick Bright resigns in protest over President Trump’s handling of the pandemic. “In this Administration, the work of scientists is ignored or denigrated to meet political goals and to advance President Trump’s re-election aspirations,” Bright charges.

OCTOBER 6 – In the Vice Presidential debate, Democratic nominee Kamala Harris says of President Trump’s handling of the pandemic, “The American people have witnessed what is the greatest failure of any presidential administration in the history of our country.” Vice President Pence responds by crediting Trump with “The greatest national mobilization since World War II.”

OCTOBER 7 – In a scathing letter, former CDC director Bill Foege – called the “Babe Ruth of public health” – calls on CDC Director Robert Redfield to publicly acknowledge the administration’s failure to level with the American people over COVID-19. “Don’t shy away from the fact this has been an unacceptable toll on our country. It is a slaughter and not just a political dispute.”

OCTOBER 8 – Senate Majority Leader Mitch McConnell admits he hasn’t been to the White House since August 6th, “because my impression was their approach to how to handle this was different than mine and what I insisted that we do in the Senate, which is to wear a mask and practice social distancing.”

OCTOBER 10 – The government reports a third consecutive day with over 50,000 coronavirus cases, the most since August.

OCTOBER 11 – On NBC’s Meet the Press, Bill Gates says, “We are running the worst testing system, in terms of who gets access to it, of any country.”

OCTOBER 12 – Dr. Fauci warns COVID-19 is “on a trajectory of getting worse.” The latest data shows infections increasing in 31 states.

OCTOBER 15 – The New York Times reports show that the autumn coronavirus surge is hitting the Midwest, mountain states and rural communities especially hard. “Of the 100 counties with the worst per-capita outbreaks in the last seven days, more than half are home to fewer than 10,000 people.”

OCTOBER 16 – More than 70,000 new cases of the coronavirus were reported today, the highest single-day increase since July. At least nine states set single-day case records, with Midwest and Mountain West states driving the surge.

OCTOBER 19 – The Washington Post reports on Dr. Scott Atlas’s attempts to hijack the White House coronavirus task force. “Atlas shot down attempts to expand testing. He advanced fringe theories, such as that social distancing and mask-wearing were meaningless and would not have changed the course of the virus in several hard-hit areas. And he advocated allowing infections to spread naturally among most of the population while protecting the most vulnerable and those in nursing homes until the United States reaches herd immunity, which experts say would cause excess deaths, according to three current and former senior administration officials.”

OCTOBER 19 – A new Yahoo News/YouGov poll shows that Joe Biden has a built a 19-point lead over President Trump on who would do a better job of handling COVID-19.

OCTOBER 19 – In a call with campaign staff, President Trump asserts that voters no longer want to hear what U.S. health officials have to say about the pandemic. “People are tired of hearing Fauci and all these idiots,” said. “Every time he goes on television, there’s always a bomb, but there’s a bigger bomb if you fire him. But Fauci is a disaster.”

OCTOBER 20 – Dr. Francis Collins, director of the National Institutes of Health, defends Fauci in an NPR interview. “Tony Fauci is probably the most highly respected infectious disease expert in the world – he’s also a terrific communicator – and I think the public has actually been greatly benefitted by hearing his unvarnished, unflinching descriptions of what’s happening with this pandemic.”

OCTOBER 26 – More than half of US states report their highest single day of new cases in October.

OCTOBER 30 – US surpasses 9 million coronavirus cases, only two weeks after hitting the 8 million case milestone.

NOVEMBER

NOVEMBER 6 – White House Chief of Staff Mark Meadows tests positive for coronavirus.

NOVEMBER 7 – Joe Biden is projected to win the electoral college by all major news organizations, but Trump refuses to concede.

NOVEMBER 9 – Pfizer announces vaccine candidate is 90 percent effective in early trials.

NOVEMBER 16 – Early data shows Moderna vaccine candidate is 94.5 percent effective.

NOVEMBER 20 – Biden coronavirus advisory board member says lack of shared information between Trump and Biden’s team is ‘dangerous,’ as Trump continues to block the Biden transition process.

NOVEMBER 20 – Donald Trump, Jr. tests positive for the coronavirus.

NOVEMBER 23 – The General Services Administration officially designates Joe Biden as the president-elect, beginning the formal transition of power.

DECEMBER

DECEMBER 1 – US closes out a record-breaking month for coronavirus cases and hospitalizations.

DECEMBER 7 – President Trump’s personal lawyer Rudy Giuliani is hospitalized after testing positive for coronavirus. The 76-year-old has spent the past month traveling around the country as part of his legal efforts to challenge the November election.

PODCAST: Scoring a Better Future — Getting Facts on Credit Scores & How They Work

Posted on June 12, 2020 by The Progressive Policy Institute

Join Paul Weinstein, Jr., Senior Fellow at the Progressive Policy Institute in Washington, D.C., and Joanne Gaskin, Vice President of Scores and Analytics at FICO, for a discussion on the changes FICO has made to its models, and how they may impact credit scores, particularly for millennials and GenZ.

Or listen to the full audio here without a Spotify account:

Lawsuits threaten to derail economic recovery

Posted on June 8, 2020 by The Progressive Policy Institute

As governors start lifting stay-at-home orders, businesses, schools, non-profits and houses of worship are trying to figure out how to reopen safely. A driving concern for many employers has been the fear of getting slapped with lawsuits if their workers or customers contract COVID-19.

It’s a reasonable fear; the pandemic is already inflaming America’s legendary litigiousness. Hundreds of COVID-19 lawsuits have already been filed. Law firms tout their “Coronavirus Litigation Task Force” as they troll for clients. Employees and customers who do not have COVID-19 have sued businesses because they feared they were at risk of catching it. Even some factories deemed “essential” have been labeled “public nuisances” for asking courts to determine the safety measures businesses must take.

Judges are not qualified to make these calls; government health experts are. But we’re in uncharted territory. America has never experienced anything like this pandemic or virus-induced freeze on economic and social activity. The experience over the past three months has been that federal and state public health guidance is vague, variable and sometimes contradictory.

Read the full article here