The subcommittee is now in order. I want to thank you and appreciate you for the work you have done to make this hearing possible. We cannot make it without you. Without objection, the chair is authorized to declare recess from the subcommittee at any time. Members of the full committee not on this subcommittee are authorized to participate in this hearing. Members are responsible to mute themselves and on mute themselves. With the regulations accompanying hrs 965, staff will only use witnesses as appropriate. Members are reminded that all rules relating to order and a decorum applied to the hearing. Members are reminded that this hearing is entitled, paycheck security Economic Perspectives on alternative approaches to protecting workers pay during covid19. I now recognize myself for four minutes to give an opening statement. In february, before a pandemic was declared and the economic livelihood of americans was placed in peril, i sent a letter asking the White House Treasury Department and the Federal Reserve how they planned to prevent the crisis due to covid19. I asked them about their strategy to protect American Health and economic. That i wrote with the chairman received a response. By that time, it was clear, at least to me, that there was no plan. Because we did not plan, we have become a part of the viruss plan. Congress was forced to take unprecedented steps to rescue our economy and provide Emergency Assistance to american families. We provided nearly every american money to feed their families. We rushed resources for covid19 testing and personal protective equipment, ppe, to hospitals. We created the Paycheck Protection Program. A shortterm lifeline to keep Small Businesses alive and employees on the rolls. Just last week, we heard from chairman powell that the cares act was able to, provide to businesses and communities and made a critical difference. Massive layoffs that threatened millions and millions of americans. Despite that significant bill, it has become clear that our initial response will not be enough and was not administered the way we intended. The u. S. Has suffered the largest increase in unemployment of any major economy on the planet. The Unemployment Rate was over 13 in may and 16 after accounting for various issues. Closer to 20 when workers with reduced hours are included. Additionally, the clock is ticking on the aspiration of many provisions on the cares act as economist and Public Health experts are telling us that the outlook is getting worse. This week, in a report written by a chief economist, he highlighted that the prospects are high that we will suffer what may well be considered an economic depression. His analysis leverages congressional budget Offices Research that initially said covid19 would be tapering off and doubledigit next year. With the resurgence of covid19 around United States in florida, texas, georgia, businesses are being forced to shut again, driving a possible second round of economic catastrophe. Throughout the course of the crisis, economic and Health Consequences of covid19 has fallen disproportionately on lower and middle income families and those of color. It was highlighted that the cares act required rural minority and women owned businesses to be prioritized for ppp loans but based on their analysis, they were not. By mid april, 440,000 black Business Owners had shuttered their company for good, and by comparison, 17 of white owned businesses closed during that same period. The cdc released covid19 information based on race and ethnicity, and blacks and latinos were three times more likely to be infected with covid19 and twice as likely to die. When you combine these facts with data from the Brookings Institute that lower income committees of color are more likely than frontline workers with higher rates of exposure, the second dangerous wave could be cataclysmic. The Federal Reserve chairman many of our Witnesses Today and is simple. There is a need for more congressional action that places employees first. The heroes act passed the house in may and is waiting in the senate and would go a long way to preventing the kind of catastrophe that leading economists are predicting. A bill sponsored by my friend, the congresswoman, would go along way in aiding those who need it the most. I would like to enter this into the record. I will now recognize the Ranking Member, mr. Mchenry, for five minutes. Thank you for the recognition. My understanding was it was shorter. But thank you for yielding. Let me first say thank you for yielding and thank you for being a good leader on this committee. The frustrating part is to listen to Opening Statements and recognize this serves as a legislative hearing on a bill that represents what is absolutely wrong with this congress. Some of my democratic colleagues response to covid19. They want to be hyperpartisan rather than trying to remake the bipartisan success of the cares act. Rather than coordinate between the house and senate and the white house, what they want to do is just up the ante because they view it as good politics. I have got to tell you, responding to the American Peoples concerns is the best way for us to be good stewards of the taxpayer and also good stewards to our constituents. Through that bipartisan success of the cares act, we have deployed Rapid Support to fellow americans. The administration has done a great job implementing it. We have portions of america that are reopening still. We have a norm is challenges ahead and that is the reason we should continue our bipartisan work. We are here today considering a partisan Covid Response bill by a far Left Progressive member. It seeks to hold American Workers and employees hostage unless they consent to a laundry list of unpopular social mandates from the far left wing. This bill, that this hearing is about, was so far to the left that it was not even part of the leftwing package called the heroes act which a number of democrats were not even while willing to go along with that partisan approach. This bill is nothing more than protecting democrats and we should get serious about crafting legislation that will get the American People back to work, grow our economy, not codify a wish list. So this is quite frustrating as a policymaker that we are wasting this committees time by having a hearing like this, when we should be crafting and working through the things that will make a good impact and get people back to work, keep people safe and healthy, and i think that should be our focus instead of a laundry list of leftwing ideas that this hearing is about. So lets stay focused on getting america back to work. Lets not focus on social mandates and extraneous partisan measures, and lets get back to the work americans want us focused on. With that, i yield back. Not that you used it all, so i apologize that we didnt present you with less time. Nonetheless, we will go to the Ranking Member of this subcommittee, mr. Hill. We cannot hear you. Thank you. We appreciate this distinguished list of witnesses. Today, we discuss the topic with a specific focus on h. R. 6918 , the paycheck recovery act of. 2020. Before making my comments on the legislation, i want to make procedural comments. This legislation should not be moving through the committee, let alone the subcommittee. This bill is to create a Grant Program for Small Businesses, and the Small Business committee should be managing the effort. The bill was referred to our committee as it involves the treasury. We are using are using our very limited subcommittee time to discuss a partisan bill sponsored by a member not on this committee. It is disappointing that there are plenty of bipartisan bills that we should notice that have influence over our direct work in international institutions, sanctions, and monetary policies. Let me turn my attention to the topic of the hearing at hand. The federal government responded to covid19 authorizing nearly 2 trillion of direct spending. 65 of what we spend in a full year, including 454 billion for the treasury for a fund which can be leveraged up to 10 times. Therefore, nearly 7 trillion of Resources Available to help the economy get back to full capacity as we fight together this virus, almost 35 of gdp. All that said, the money is still flowing in before we start creating new programs, we ought to assess the current programs we have and the amount of money we have gotten out into the economy. Hr 6918 would create a program of treasuries to provide grants to Small Businesses. As a former official, the treasury becoming another Program Agency in the cabinet and if we learned anything about the cares act we passed, the government is not always well equipped to carry out programs on a broadbased scale. Look at the ppp program. Versus the emergency injury disaster loan program. Using the banks, the ppp program, while not perfect, got over 500 billion of assistance out to our Small Businesses, preserving millions of jobs in just a month, whereas the Emergency Disaster Loan Program still suffers from a bureaucratic approach that has limited its effectiveness. The ppp program has 134 billion of available funding. Lets focus on improving that program to help our Small Businesses over the next weeks to come, and lets fix the idle program in the right way. Further, i would like to mention the role that state and local governments play. The state of arkansas used cares act funding to set up its own program for Small Businesses. The arkansas already for business Grant Program received over 2300 applicants within one hour and help over 200,000 arkansas employees across the state stay at work. 94 of those businesses had 50 employees or less, and a quarter were minorityowned and womenowned. I think we have the solutions here to help our Small Businesses items to our state and local government and lets fix the local program and ppp program so more Small Businesses can be helped as we continue to fight this terrible virus across our country. Thank you for the time. I yield back the balance of my time. Thank you. The chair today, i want to apologize again for the mismanagement of the time early on with you, mr. Mchenry. Today, we welcome the testimony of ms. Lisa cook, ms. Lily garcia, mr. Joseph stiglitz, and Diego Zuluaga. Ms. Cook is a member of the american as an authority on international economics, she is also advised policymakers from the nigerian and rwanda governments. Thank you for appearing before this committee. Next, we have lily garcia, the president of the National Education association, she served as the ndas neas vice president. She served as a member of the clinton administrations white house strategist session on improving hispanic education and was named a member of the president s Advisory Commission on Educational Excellence for hispanics. Thank you for appearing before the committee. Next, we have mr. Joe stiglitz, an economist and professor at columbia university. He is one of the chief economists of president clintons council of economic advisers. He is the founder for the initiative of policy guide law, a think tank on International Development and a recipient of the nobel memorial prize and the prestigious John Bates Clark medal. Thank you for appearing. Finally, we have mr. Diego zuluaga, who is the associate director of Financial Regulations studies at the cato Institutes Center for monetary financial alternatives. Prior to holding this position, he was that of the Financial Services and tech policy at the institute of Economic Affairs in london. He has written on a variety of regulatory topics and his work has been featured in a number of reputable publications. Thank you for appearing before this committee. Witnesses are reminded your oral testimony will be limited to five minutes. A chime will go off at the end of your time and i ask that you respect your members and other witnesses time and wrap up as quickly as possible. Your written statement will be made a part of the record. Ms. Cook, you are recognized for five minutes to give an oral presentation of your testimony. Ms. Cook thank you, members of the subcommittee on National Security International Development. The coronavirus pandemic and the resulting economic and financial crises are unfolding at breakneck speed. Nonetheless, the rent and bills for americans are still due. A quick action from congress would have gone a considerable way tos to postpone this recession. Specifically, these measures, including adding 600 per week to unemployment checks, providing assistance to Small Businesses through ppp, and giving americans a direct payment of 1200. With an Unemployment Rate of 11 come we have entered the history books with the second highest Unemployment Rate done than at any other time since 1940. The Unemployment Rate for African Americans is 15. 4 percent and for hispanic americans, it is 14. 5 . These data are especially disturbing because black and hispanic making it more difficult to whether the covid recession. By early june, 44 of adult latino renters and 41 of black renters compared to 21 of white renters reported not being able to pay their rent. 20 of rental households face eviction by september 30. A wave of bankruptcies could ensue if Small Businesses cannot stay afloat. Renters cannot pay their rent, and landlords cannot pay their mortgages. Early evidence shows that direct federal payments of up to 1200 for adults and 500 per child are critical first lifelines for many households in the u. S. Economy, allowing them to purchase food and pay their bills. To minimize the likelihood of a liquidity crisis for these households becoming a bankruptcy crisis for them and the economy, congress should authorize another round of direct payments along with extended Unemployment Benefits. By mid june, the businesses that were listed on yelp, 140,000 of those closing since march 1 or closed by mid june. 35 of shopping and Retail Businesses listed had closed their doors permanently. 3 of restaurants closed their doors permanently. 41 of africanamerican businesses reported being close compared to 35 overall. The only survey providing Demographic Data on ppp loan recipients, 45 of black imitative businesses were closed by the end of the year without more relief. States that recovered that received more ppe loans and with more genera unemployment benefit generous on employment benefits, had faster recoveries. Economists expect a slower recovery. Given that Consumer Spending is 7 of gdp, it is clear that more and expanded help to American People at Small Businesses and Small Businesses will be needed. I agree with colleagues who signed their letter that regular, lasting, direct payment, would be a critical part in ensuring economic recovery does not grind to a halt. More aid to state and local government is desperately needed, now, to continue to fight the pandemic and prepare for job losses and impending budget, being adopted by state and local government. This relief should be directed at health care providers, Community Colleges, universities, mental health, and other social services, universal broadband. Any and all relief to the American People should be authorized and dispersed. Thank you. Thank you very much. Ms. Garcia, you are recognized now. Ms. Garcia thank you, chairman cleaver, Ranking Member hill, and members of the committee for this opportunity to provide testimony for todays hearing. My name is Lily Eskelsen garcia and i am a sixth grade teacher from utah, and president of the National Education association, nea. As neas president , i am honored to represent more than 3 million teachers, Education Support professionals, and specialized instructional support professionals in k12 Public Schools and on Public College campuses. Nea also represents educators in department of defense schools, College Students who plan to become educators, Student Teachers and retired educators, and Public Employees in local and state government. I am so proud but not the least bit surprised how nea members risk rose to the moment, demonstrate resilience, creativity, and teamwork as we tried to cultivate in our students the same characteristics. We have been called on to organize caravans through student neighborhoods to deliver a message even though our School Building is closed, we are still learning and still here for you. Parents overnight had to become their kids substitute teachers and i had more than one member cry to me about how worried they are because school is the only stable place in their lives. Governors and mayors are taking note of very steep budget cuts that are going to harm our students. This is the result of a pandemic, not someone who did not plan for something no one even knew would come. Without federal assistance, we will see massive educator layoffs and that will be incredibly harsh, especially for those who struggle to make ends meet. Even during normal times, such as our wonderful and amazingly devoted Education Support professionals, lunch ladies, school bus drivers, the maintenance staff. Many of these workers stayed on the job and put themselves in harms way, to drop off work packets to students and keep schools sanitized and safe. Nearly 900,000 Public Education jobs have already been lost because of budget cuts. By comparison, more than 350,000 education jobs were lost due to the great recession. In other words, covid19 has done more damage in three months than a recession that lasted for a year and a half did. If this damage goes unchecked, nearly 2 million educators could lose their jobs over the next few years. According to neas analysis, and we have studied the same numbers that School Boards are receiving all over the country, this could represent 1 5 of the entire workforce that empowers Public Schools in Higher Education institutions. The covid19 recession could be six times worse for education than the 2008 financial crisis. Our nation now has 1. 4 million more k12 students but 135,000 fewer educators than we had 12 years ago. These layoffs could stem from pandemic related budget cuts. It will just worsen an already dire situation. No community will go on effective. But the schools and wealthy communities are more likely to weather the storm while schools in poor communities that are already struggling might not. Job losses in these schools would profoundly affect low income students whose schools rely on title i funding to reduce class sizes. We know that we will need more and we thank the house for taking the old action of passing the heroes act. We call on Mitch Mcconnell in the senate to please abandon the wait and see until we get around to it approach. I thank you for your time and i am happy to answer any questions. Thank you and i now recognize mr. Stiglitz for five minutes. Thank you very much. Sad to say, the u. S. Response to covid19 has been disappointing. Weve done a much poorer job than other countries, both in maintaining the health of our people and that of our economy. And the two are related there will not be a strong recovery until the pandemic is brought under control. In many ways Congress Responded to the pandemic with a massive amount of assistance. By all accounts, it succeeded in preventing much suffering that would otherwise have occurred. But in many ways, the programs were badly designed and badly implemented, with much of the money not going to where it was most needed, with the Unemployment Rate soaring far higher than elsewhere. This put strains on our Unemployment Insurance system, resulting in many of the unemployed not receiving money for weeks and weeks. The increase in unemployment is especially inopportune in the u. S. , because so many depend on employerprovided health insurance. Losing Health Coverage in the midst of a pandemic is a calamity. The program of assistance was predicated on there being a short shutdown; with enough love shut down. It was predicated on a vshaped recovery. Such beliefs appear now to be utter fantasy. With the pandemic continuing apace, no one thinks we will be back to normal by the end of this month. Because we cannot have a healthy economy without a healthy population, health should be a priority. While some of the earlier programs did this, there are important lacunae. It was full it and unconscionable not to have it was foolish and unconscionable not to have ensured that everyone was provided with paid sick leave. We dont want people with the disease going to work and spreading the disease; but with so Many Americans living paycheck to paycheck, it was inevitable that that would happen without paid sick leave. There are likely to be large increases in demand for medicaid, and the states will be suffering large losses in tax revenue. With states having balanced budget frameworks, only the federal government can help them meet these needs. Secondly, hysteresis effects are enormous bankrupt firms dont become unbankrupt when the pandemic is over. Balance sheets of households and firms often take a long time to recover. Thats why you did the right thing in responding quickly and massively. But all these investments in our future will be for naught if assistance is not continued so long as the pandemic and its economic aftermath persists. There is a third powerful force that will depress the economy precautionary behavior. As long as there is uncertainty, both about the course of the disease and the economy, there will be a reluctance to spend, either by firms or households. In previous downturns, like that of 2008, we provided assurances to workers that there would be extended ui so long as the Unemployment Rate remained elevated. We need to do that now. And we have to provide similar assurances to businesses. We need to provide incomecontingent loans, where repayments and the duration of the loan automatically adjust to the circumstances of the economy and the firm, providing an automatic stabilizer to the economy. Thus, there must be a commitment, in the famous words of mario draghi, to do what it takes. But at the same time, we must spend our money well, which is why the design of the programs is so important. As i wrote in my Roosevelt Institute policy brief in late april, even before the passage of the cares act, the alternative approach of direct payments to employers to retain workers seemed to some more likely to be more effective than the disparate programs included in that bill. The evidence over the last few weeks seems consistent with those expectations. The evidence since then, both in the United States, which took an alternative course, and in those countries around the world that adopted programs similar to the h. R. 6918, the bipartisan paycheck recovery act, strongly reinforces the conclusions i had reached at the time. Both the forecast that additional funding would be needed and that the ppp program would not be as effective as had been hoped have, unfortunately, been more than fully realized. I went on to argue that the program might be made even more effective by providing supplementary support for training, so that workers who are not fully engaged in production could be more productive when the economy emerges from the pandemic. This program represents a significant improvement over the existing ppp; it is simpler to administer, with more of the money going where it is needed, and considerably less costly and more effective. Some will say, yes, we should have adopted the paycheck guarantee program. But thats water over the dam. Its now too late. That argument might have had some validity if, as thought at the time these measures were adopted, the pandemic had been of short duration. But since then it has flared up, and there is a good chance it will be with us for a long time. As ive already said, we will need to maintain some kind of support, and this program is the best way forward. One of the virtues of the paycheck recovery act is that it allows states and localities to access grants. secondly, our grants. One sector is localities first, our assistance to the economy has to be far more comprehensive. There were some important sectors that did not receive the assistance that they needed. One sector is states and localities. I already referred to the severe budgetary constraints that they faced. These authorities are responsible for many of the services on which so many of our citizens depend, including education, health, and welfare. But cutbacks in spending will greatly weaken our economy, with large multiplier effects. It is austerity from below. In previous downturns we have seen the devastating macroeconomic effects. Already, layoffs of government workers are among the large sources of increasing unemployment. We will not have a robust recovery without adequate support for this vital sector of our economy. One of the virtues of the paycheck recovery act is that it allows states and localities to access grants. Secondly, our aspiration should not be a recovery in which sometime, say, in 2022 when we get back to where we were in late 2019, we simply pick up where we left off. Never has government played such a role in the economynot even economy. Not even in the Great Depression or in the great recession. Citizens have the right to thank you for your time. Diego zuluaga, you are recognized for five minutes. Diego zuluaga chairman cleaver, Ranking Member hill, members of the subcommittee, thank you for the opportunity to testify before you today. My name is Diego Zuluaga and i am the associate director of Financial Regulation studies at the cato institute. Americas 30. 7 million Small Businesses have taken a very severe hit from the covid19 pandemic. The share of Small Businesses reporting that the Health Emergency has had a large negative effect on them was 37. 7 in late june, down just 14 Percentage Points from eight weeks earlier. Another survey found in april that 1. 8 of Small Businesses had permanently closed because of the pandemic, which if true would mean 553,000 firms are gone forever. Yet Economic Activity and employment are so far recovering faster than many expected. Early action to support Small Businesses through the Paycheck Protection Program has helped. According to my estimates, around 77 of Small Businesses with employees had gotten a ppp loan by june 30. And while the proportion of employing Small Businesses with a ppp loan varies considerably across states, nowhere is it below 60 . By allowing millions of Small Businesses to keep paying their workers, as well as utility and rent bills, the Paycheck Protection Program has prevented a greater destruction of livelihoods and valuable business relationships than has actually happened. It doesnt follow, however, that a program of grants based on lost revenue will assist the recovery. I believe, on the contrary, that it will hinder the recovery by delaying businesses necessary adaptation to changing consumer demand. The pandemic has not just caused all sorts of businesses to suffer losses. It has also led to permanent changes in Economic Activity, mainly because production processes and Consumer Preferences have shifted in response to new health risks. Restaurants are cooking more meals for takeaway and outdoor consumption. More retail activity is moving online, as are larger transactions, such as home purchases. These changes are unavoidable. Any recession involves the reallocation of workers across firms and industries. But because of the pandemics wideranging consequences, recovery from the present recession will likely involve a larger redeployment of workers and capital than previous downturns. Attempting to freeze americas productive structure in its precovid19 state will therefore only delay the return to full employment and steady growth. The bounceback will be swifter, on the other hand, the more quickly businesses adapt to the new conditions. I dont at all mean to suggest that government policy cant play any additional, valuable role. But it can best do so by removing barriers to geographic mobility and business investment. Instead of rigid support programs that impede mobility and risk prolonging financial insecurity, workers need flexible support in the face of uncertain economic conditions. A program of direct grants to cashstrapped households, whether or not their members are employed, would address paycheck insecurity while preserving the incentive to adapt to the postpandemic economy. A conditional Grant Program, on the other hand, would tie up capital and labor in firms whose longterm viability is far from assured. Besides delaying adaptation, conditional Grant Programs are costly to administer, as officials must verify applicants declarations and monitor the use of funds. These programs also raise fairness concerns. Why should laidoff employees who find new work not be entitled to a reward, whereas those lucky enough to keep their job get a bonus . Why should taxpayers support businesses while the national Unemployment Rate remains above a threshold, but not thereafter . Macroeconomic arguments about supporting demand are unpersuasive, since direct, Unconditional Cash grants would have at least the same effect on demand, for two reasons. First, a larger share of available funds would go to recipients instead of program administrators. Second, because grant funds would go to the least welloff regardless of Employment Status, and the least welloff consume more of their disposable income, the Immediate Impact on aggregate demand might be greater. Congressional action to support the solvency of Small Businesses in the direst weeks of the pandemic has enabled a speedier recovery than many expected. Now the goal should be to encourage adaptation so American Workers and businesses can resume productive activity. Achieving this goal will require their ingenuity, on which we can count, but also flexible, changefriendly support from policymakers. Thank you. I will be happy to answer your questions. Thank you very much. I will recognize myself are fiveminute for questions. This morning, i got up to news that mexico is now closing some of its borders to the United States because we are losing this battle with covid19 and apparently, or than anybody else. If you believe we are losing and it is ok, we will never win. I am troubled by what i am seeing and reading, and it should be a little embarrassing, to the whole country, but the New York Times headline yesterday, european workers draw paychecks and American Workers scrounged for food. Dr. Stiglitz, you are a renowned and former chief economist. You had some outspoken comments about covid19 and the crisis for the United States. And comparing those to others. Do you believe that the report assessment that the prospects are higher that we might suffer from an economic depression . What is your analysis of his analysis . Unmute. Yes, i am very concerned. The fact, as i said in my testimony, is we are not getting a vshaped recovery. Even moderate economists like the head of the chairman of the Federal Reserve do not think we will be back to where we were at the end of 2019 until sometime in 2022, if we do everything right. If we do not do everything right, if we follow Herbert Hoover and do not provide the assistance the economy needs, then we are setting ourselves up for another depression for a severe economic downturn. Thank you. Someone said mexico will build a wall to protect itself from us. I guess something good can come out of something bad. I would like to know, what is going on with educators . How are they faring in this covid19 world . What difficulties are they experiencing . And what are the prospects of opening schools in september in the current atmosphere . You cannot see the back of our head. We have been pulling out our hair for four months. We are so frustrated. We love our students. I am a sixthgrade teacher and i have 39 kids in my room. 39 12yearolds one year. That was not helping on the best day of the year. We have got millions facing overcrowded classrooms, trying to figure out, how do you make that work coming back in the fall . When they told us to leave the building, it was like someone pulled the fire alarm. Everyone grabbed what they couldnt ran out and the next day, we were trying to figure out how to deliver to 52 million Public School students, reading, writing, and arithmetic online. It has been incredibly challenging. Under the best of circumstances, it is frustrating. That is when you have got wifi in the home and mom and dad have a laptop and it is just kind of annoying. But it can be alarming when you get into communities of poverty where the only technology in some homes was moms telephone and she took it with her to work because she stocked shelves in a Grocery Store and the kids did not have adult supervision in their home. Our members, americas educators, have said, we raced out and had to make up things and do the best we could to have a meaningful educational experience for the students, but they are alarmed because they see politicians, i know i am talking to some politicians here, but they see people who are making decisions to race back into that School Without the proper plan to distance. To have ppe. To have Health Checks and covid testing. It is like, we have to warehouse those kids. Put them back into my classroom and do not worry, do not worry, that somehow they will be at risk, or put their own families and teachers and the lunch ladies and the janitor at risk. So we are scared. Understandably. Thank you. I recognize chairman hill for five minutes. Ranking member. Rep. Hill thank you. A very interesting discussion. Would you tell me what you think watching the ppe program putting 500 million helping millions of people stay employed in arkansas with 3. 5 billion dollars for about 4000 businesses . We have with work and the house in the house, we extended that date, and i want to thank marco rubio for his leadership and my friends in the leadershipot blocking that and i thank my friends in the house for not blocking that. In thatuld we change program to make it more helpful for people still fighting various shutdown issues, while others are doing better . Click should we change . What should we change . Additional flexibility in terms of timing within which the funds can be spent would be quite helpful and adjusting percentages allocated to different types of expenses authorized. It seems it will take longer for the pandemic to get results and maybe the timing is different in different states. Fundsld be useful to get to help businesses change premises to become safer, at least before a vaccine and in addition, what is left of the vpp is not proportional the ppp is not proportional to those businesses who do not have a loan yet. Business was troubleantly down, and and revenues are still down 50 , would you allow business to get a second ppp loan . I would pick the key distinction between a supply, making a business verifiable, having the same Customer Base from being able to be in because of a second wave of Something Like that, distinguish that from aftershock. The longer this goes on and more changes in, the more demands and industrial patterns become permanent and in that case existing industrial structure is counter productive. Issue of the 600 of Unemployment Compensation on top of the states existing Unemployment Compensation benefits, members are really looking at how should that be extended or modified before the end of the month is an important component of the next legislative effort. What are your thoughts about the compensation . The 600 extra per week . It is still unclear as to whether there is a benefit in raising the unemployment benefit. In some places and for some businesses, it is more attractive for workers to earn Unemployment Benefits then to remain in work given the insecurity of going to work in the pandemic. Even though it may be intentional to boost incomes it is more helpful to have direct support regardless of Employment Status because in that case you do not get those incentives. From the massive letdown of the program so far it seems to be the case in some states, it was less and there was a relationship with boosting unemployment. We want to thank you for your leadership. I spent a lot of time talking to teachers and there is nothing more fun than sixthgraders, i dont know if i want 39 of them all day but i want to thank you for leading the nea this year and helping to be a constructive voice trying to find bipartisanship for what teachers need to go back to the classroom. Would you agree we need to get and it isin School Better in so many ways . Parent, is no republican or democrat, that once their kid in an unsafe situation. We dont have to do it in an unsafe way. People keep asking me the question. Overcrowded classrooms, we need Hand Sanitizer and ppe and all these things while are almost about laying off 2 million educators. That is unimaginable. We have to talk about whether we should close or open that Unsafe School wrong choices. We need to make those schools safe. We need to make sure we have everything that that Teacher Needs and that the parent wants to keep the children safe. Thank you so much. If you would like to proceed, mr. Hill, please feel free to do so. We went longer earlier. I yield back. All right, thank you. Youre recognized for five minutes. Thank you, mr. Chairman. I think you are saying two things, and i kind of agree with both of them, even though they are opposite. Ppe has generally been pretty good and i would agree. Some people ought to get a second loan. Maybe i agree with that. Business Bankruptcy Law for 25 years before i got elected to congress. But i am worried about you say demand shock. Economists have the advantage of hindsight as to what the demand shock is and we are seeing unavoidable permanent changes but you really dont know it for that weso i am worried are going to continue to throw good money out with the bad with respect to businesses that are not going to make it no matter what we want to do. I agree with some of your and i appreciate your desire for innovation. That is all right, but we are in an emergency situation right now. We came through three months and we got him ahead of us. You didnt get to finish your statement and i want to hear your Closing Remarks and then i got some questions for ms. Garcia and ms. Cook. Thank you very much for giving me the chance to finish. I wanted to say we needed to have a vision of what kind of economy we want coming out an agreement with whats been said. There will be structural changes. We are going to be worried about another pandemic. Those are some of the examples. Aviation sector will be changed. We ought to be thinking about how do we move the economy to the future economy. Part of that is, we not to have more of a knowledge sector. Our comparative advantage as an economy is technology. It is what really makes it strong. One very disturbing aspect of what has happened is we havent given support to the knowledge sector, education and we heard about how the number of teachers has gone down. Our universities are being devastated. All sources of revenue are going down. The decision yesterday to make it more different for foreign students to come in, one of the things that has made us strong, is having them come to the United States and often state to as the start of a lot of new enterprises. I. C. E. Just made the policy about the visas. I want to urge as you spend money, have a comprehensive view making sure no sector is devastated and we have a vision of what we want emerging in 2022. Thank you very much. To ms. Garcia and ms. Cook, my wife is an nea lifetime retired and has been called back three times and is making a list of things as a math teacher in high school need to be done to teach and deal with the potentials of the virus. She also knows tax revenue is way down, state, local, and School Districts. I will start with ms. Cook. You are talking about a number of the things to try to avoid bankruptcy, but i think they are coming anyway. I feel like we have to support our state, and local School Districts or we are going to hit a wall by the end of the summer. How would you react . We cant hear you. Ms. Cook, i am not sure what is going on with your audio. We can talk about it offline. I am just worried we are going to hit a brick wall at the end of the month. When unemployment runs out, when state and local and School Districts are broke, we have problems and we will have to deal with it. I will yield back to the chair. We had a technical problem. Ms. Cook, if you would like to respond to the question, please proceed. Im doing this a little bit lax because we are still experimenting with things. Ms. Cook, please. I am not hearing anything, mr. Chair. [no audio] there you go. So i absolutely agree with you. We want to avoid the problems we saw in the great recession. Fiscal cliff that led to so much pain, suffering, and unemployment because state and local government laid off so many people because congress didnt help and there wasnt enough aid. All of the problems we are talking about, from the schools to universities to Community College to arts, all of these Impact Health care workers, all of these support the economy. This is 70 of gdp. It is Consumer Spending. All of them need support. I think it would be foolhardy to think they are adopting a budget that they wont follow through. They have a hard budget. This aid has to be quick and now and this is learning the lesson of 2008, 2009. Thank you. Thank you very much. I yield back. The chair recognizes the gentlemen from texas and missouri. Mr. Williams. Thank you, mr. Chairman. I appreciate you bringing everyone together and to the witnesses. We saw promising canonic data coming out with 4. 8 million jobs being added during this month of june. We still have a long way to go before we are back to prepandemic levels, but it looks like the economy is bouncing back sooner than many people had predicted. Unfortunately, the legislature attached to this hearing today the paycheck recovery act is not a realistic path forward that would help continue this growth trend. The bill contains such a radical postal that they are not even included in the 3 trillion partisan heroes act passed in may. Do you think that drastic new government interventions would be the best way to get the economy to recover quickly . I dont think it would help. We need flexibility. We have seen from the start that relaxing, like traditional licensing or telemedicine or purchasing food and drink, all of those things are helpful in getting the economy moving, to the extent that you are introducing rigidities by tying support to prepandemic Employment Status. That could make it more precarious than assured. We have heard everyone talking about the need for another a package. Aid package. That is constantly what we hear. Congress, as we have said, has already allocated to 2. 2 trillion from the cares act and other bills passed related to the coronavirus. The paycheck Protection Plan still has over 130 billion that is currently untapped. How should congress be looking at the economy to be making sure the industries in most need of assistance receive it, while the other money already injected to the economy makes its way into the system . I would Pay Attention to where the need is, particularly in terms of local shutdowns of activity or places where the pandemic has a resurgence at a state level. It is useful because that is an indicator than things have stalled. As you indicated, there is still funding left over in the ppp, and i mentioned earlier how that could be helpful. Small Business Owners, of which i am one, for 50 years, on the engines of job growth in our economy. Unfortunately, i have heard from many businesses across texas that they are concerned they are going to be sued if they attempt to reopen and some individuals get the coronavirus, even if they follow all of the state and local and federal safety guidelines. We need to pass liability next bill son the this economic recovery will not be hijacked by trial lawyers. I believe this is a major thing we have to do as we move forward. How important is passing Liability Protections to protect businesses who are trying to open safely to getting our economy back on track . Thank you for the question, but i am not a lawyer. I cannot respond with expertise but i would say it is essential to get them back in speeding up the economy. The economy can and will get going. I think we could see growth in the Fourth Quarter and in the next year, even better but i will say Liability Protection is important regardless of the business because people will get back to hiring people and getting the income going. I think it is important. I yield my time back. Thank you. The chair now recognizes mr. Heinz for five minutes. Thank you mr. Chairman and thank you our Witnesses Today. Very interesting and important discussion. I was sad to hear my republican colleagues say that the proposal is somehow way out there on the fringe. It simply gives money to employers that have suffered 10 declines in revenue to pay their employees. It looks a lot to me like the ppp program we are all praising right now. By the way, my understanding has been it has employed with some success in countries like australia, and israel. Hardly leftwing places. I have a different concern about the program, which has been a larger concern with the efforts across the board with ppp and many efforts on the part of the Federal Reserve including the primary and secondary purchases they are making. Other than the Unemployment Insurance, this has been a very businessoriented recovery. I understand the attraction of trying to help Small Businesses, but the reality is, an awful lot of business are going under anyway and certainly will. That is not a happy thing. There is a process of bankruptcy that will keep a business operating and people employed while the capital structure is restructured. Let me start with the professor on this and if we have time i would like to hear from dr. Cook. Why should we not be focused at delivering money directly to the individuals who need it. If you are unemployed, you get money. If you never got a job, you would get money. When you go business focused, a lot of people would have been paying their insurance. A lot of the efforts of the fed are there to make bondholders hold. Professor, why should we not reorient what is around the main governmentof the which is to keep american citizens, not businesses large or small, but to keep american citizens as whole as we efficiently can. I agree with your overall sentiment. I think response has to have a balance. Let me explain why i think the Paycheck Recovery Program is a good way of helping, because maintaining the link between the worker and his firm is important for the recovery. We know when that link gets broken, the recovery will be impaired. We also know that our Unemployment Insurance system is not able has not been able to manage well the constant search of newly unemployed. People have had to wait weeks and weeks to get the money. We also know america, more than other countries, workers depend on employerprovided health insurance. If they get disconnected with their firm, they then go on medicaid or very expensive cobra revisions. This is actually an efficient way of delivering money to a lot of lower income individuals. The way the program is set up, it only goes to people whose income is less than a certain amount. It is actually directing money via an administrative process to low income, middle income workers who need it. It actually uses the existing set of relationships to disperse money. That is the way to think about it. I only have 30 seconds. My attention was caught because you are arguing for direct aid to individuals. How do you respond to value being placed on the employeeemployer . We leave this hearing out to take you live to florida for an update from Governor Ron Desantis on the state response to coronavirus. Good afternoon. Fork you for being here, the Medical Center for hosting, randy curran, ceo of the Medical Center and also my friend, bill, for being here. We have representative
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