The Impact of the HEROES Act on Black Communities

Last Friday, U.S. House Democrats passed a $3 trillion bill to address economic fallout from the coronavirus pandemic—the HEROES Act.

Economic Support for Individuals:  African American unemployment more than doubled in April alone (from 6.7% in March to 16.7% in April), and the HEROES Act attempts to provide economic relief to families. The bill extends the weekly $600 federal pandemic unemployment compensation supplement through January 2021. Many shelter-in-place orders resulted in lower state and local income tax revenues and layoffs of some state and local government workers, and the bill provides nearly $1 trillion to state, local, and tribal governments. The bill provides $25 billion in emergency funding for the U.S. Postal Service, where 21% of workers are African American.

The bill also features a second round of direct stimulus payments of up to $1200 per person and $6,000 per household to an expanded set of families. The bill increases the maximum Supplemental Food Assistance Program (“SNAP” or “food stamp”) benefit by 15%, waives work requirements for SNAP benefits, and provides additional funding for child nutrition programs and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). The bill includes $100 billion to support low-income renters avoid eviction, $75 billion to provide homeowners with direct assistance for mortgage payments and other housing costs, and $11.5 billion for housing and health services for people experiencing homelessness.

Protecting Essential Workers:  African Americans are also more likely to serve in many “essential worker” positions exposed to the virus, and the HEROES Act would establish a $200 billion Heroes Fund to provide hazard pay to essential workers employed in places like food processing facilities, grocery stores, hospitals, pharmacies, and transit systems. The bill expands paid leave to employees of employers all sizes across all industries without exemption, and would expand the covered reasons for the leave to self-isolating due to a COVID-19 diagnosis, caring for a family member suffering from COVID-19, or caring for a child, person with a disability, or senior citizen whose school or care provider is unavailable due to COVID-19. It also requires that the Occupational Safety and Health Administration (OSHA) issue standards to ensure the safety of workers, including preventing employers from retaliating against workers for reporting or publicizing health hazards or using their own more protective personal protective equipment.

Testing and Health Care: Existing data suggest that in many places African Americans are more likely to die from COVID-19. The bill provides $75 billion for testing and contact tracing, and $100 billion to hospitals and health care providers for expenses resulting from the coronavirus. It also provides subsidies for COBRA to maintain health insurance coverage, and provides a special two-month enrollment period under the Affordable Care Act so that uninsured people can sign up for health insurance.

Black Businesses & Access to Capital:  Data also suggest Black businesses were less likely to receive forgivable loans in the first round of the Paycheck Protection Program (“PPP”), and the HEROES Act attempts to address some of these issues by directing additional resources to community development financial institutions (CDFIs) and minority depository institutions (MDIs).

While the bill does not include any new funding for PPP, it directs the Small Business Association to set aside the lesser of $10 billion or 25 percent of the remaining PPP funds for community financial institutions. The bill also carves out 25% of the remaining funds to be used for nonprofits and 25% for small businesses with 10 or fewer employees, and makes it easier for borrowers with low-risk criminal histories to obtain PPP loans.

The bill also includes a $1 billion appropriation to the CDFI Fund for rapid response, emergency grants to CDFIs. It also authorizes an additional $2 billion to the CDFI Fund, of which $800 million would be set aside for minority-owned lenders to support minority-owned businesses and underserved communities. The HEROES Act also directs the SBA to create a Task Force on Lending to Small Business Concerns, which will focus on improving the relationship between the SBA, CDFIs, and MDIs.

Demographic Data:  The HEROES Act also requires demographic reporting by the Small Business Administration on PPP loans, and by HHS on COVID-19 cases in nursing homes. It requires HHS to describe how it will help state and local health departments improve collection and reporting of demographic data, requires CDC to establish health inequity field studies, and requires HHS to propose strategies to reduce disparities. It also authorizes funds to several federal agencies and to state and local health departments to modernize and improve their health inequities data collection methods.

Elections: The HEROES Act also provides over $3.6 billion for states for elections for federal office. The bill also provides standards for states, including online registration, early voting, no excuse vote-by-mail with prepaid postage, and allowing a sworn written statement to fulfill an identification requirement.

Digital Divide:  The bill provides for $4 billion to expand high speed internet access to those who cannot afford it, and another $1.5 billion to expand internet access to students and library patrons.

HBCUs: The HEROES Act provides $1.7 billion for HBCUs and Minority Serving Institutions, $20 million for Howard University, and authorizes and prioritizes grants to HBCU medical schools.

Environmental Justice:  The bill would also provide up to $50 million to the EPA for environmental justice grants to study or address disproportionate impacts of COVID-19 in environmental communities.

Criticisms: Senate Majority Leader Mitch McConnell said the bill has no chance of passage in the Senate, and dubbed it an “1,800 page liberal wish list….that can hardly be taken seriously.”  President Trump called the bill “DOA” and threatened a veto.  Although some of the bill’s provisions were championed by progressives and the Congressional Black Caucus (CBC) (see the CBC’s 12-page April 29^th stimulus proposal here), some progressives believe the proposal doesn’t go far enough. Senator Bernie Sanders said the final version must include $2,000 monthly payments (rather than a one-time $1200 payment), Medicare expansion (rather than funding COBRA which subsidizes health insurance companies), and a paycheck guarantee.

Click on the following for a one-page summary of the HEROES Act, a 90-page section-by-section summary, and the over 1800-page full text of the bill. For analysis of the bill, see the Washington Post, The Hill, the National Law Review (employee leave provisions summary), Center for Law and Social Policy (CLASP) (observing that the paid leave provisions remedy the previous exclusion of millions of workers), the House Committee on Small Business Fact Sheet, and UNCF.