Late is better than never for more COVID relief

Now that Election Day is over Congress needs to get back to work and approve another round of COVID relief to support the states. New national daily COVID cases are topping 130,000, and the first round of federal relief is running out.

So far, Vermont hasn’t taken the financial hit that was anticipated last March when COVID-19 became a pandemic. That is due in large part to swift action by Congress. The CARES ¹Act directed more than $4.5 billion in federal aid to Vermont businesses, individuals, and state government. That included $600 a week in federal supplemental unemployment benefits, which was a lifeline to workers who had to stop working but couldn’t support their families on regular state unemployment insurance payments.

According to a new report from the Legislature’s Joint Fiscal Office, the federal aid pumped into the Vermont economy helped to generate nearly $50 million in extra tax revenue for the first three months of this fiscal year. General Fund tax receipts from July through September were expected to be $523 million. Instead, the state took in almost $573 million.

But while revenue collections appear strong now, the Joint Fiscal Office warns there could be trouble ahead:

• “Personal and corporate income taxpayers may have been overpaying in the first half of the year, which could lead to greater refunding during the April tax filing season.
• “In the absence of additional Federal fiscal stimulus, the money from the CARES Act drains out of the economy at some point by the end of the year, which could cause consumers and businesses to restrain growth and spending in the second half of the year.
• “The trajectory of the COVID-19 pandemic will impact consumer behavior, which will impact consumption-based taxes.”

The CARES Act has propped up the economy through the pandemic. Businesses, individuals, and states are going to need help again when that stimulus fades away. Congress dithered through the summer and fall, but now time has run out.

And it’s time to control the pandemic if we want the economy to recover. Clearly, the spread of the virus is getting worse. President Trump pointed to the recent spikes in COVID cases as proof that Europe was managing the virus poorly. Most of Europe has responded to the new surge by tightly restricting people’s movements as they did last spring. Most states in the U.S. are experiencing new spikes almost daily. If lockdowns in Europe slow the spread of the virus as well as they did in the spring, perhaps the U.S. finally will make a national effort to curb the virus. That, too, will require more federal help: to pay some people to stay home again, to give the states money to step up testing and tracing, and to help states balance their budgets when revenues fall again.

Winter is coming, and experts warn the worst is still ahead. We’re dying for some help.

1. Coronavirus Aid, Relief, and Economic Security Act [↩]