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| The Coronavirus Stimulus Is Playing Hard to Get | |
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| Kaula Carr’s job in Arizona disappeared in March when the restaurant where she worked laid off staff in response to the coronavirus crisis. She and her young daughter are eligible for public assistance, ranging from food stamps to Medicaid, to help soften the blow. But after Ms. Carr spent hours filling out forms and uploading dozens of documents, the online system crashed. “I want to cry,” she texted her aunt. “They make it impossible to actually get assistance.” | Kaula Carr’s job in Arizona disappeared in March when the restaurant where she worked laid off staff in response to the coronavirus crisis. She and her young daughter are eligible for public assistance, ranging from food stamps to Medicaid, to help soften the blow. But after Ms. Carr spent hours filling out forms and uploading dozens of documents, the online system crashed. “I want to cry,” she texted her aunt. “They make it impossible to actually get assistance.” |
| Ms. Carr is one of millions of Americans discovering the gap between the promise of public programs and the reality of their design, which makes it hard to get help. The short-term result will be unmet needs, a stymied economic recovery and profound frustration. The long-term result should be a reconfiguration of how we administer the safety net in the United States. | Ms. Carr is one of millions of Americans discovering the gap between the promise of public programs and the reality of their design, which makes it hard to get help. The short-term result will be unmet needs, a stymied economic recovery and profound frustration. The long-term result should be a reconfiguration of how we administer the safety net in the United States. |
| As researchers who have documented administrative burdens in government programs, it is all too apparent to us that a crisis response built on the existing system will fall short. The $2.2 trillion Cares Act relies on state unemployment systems that were immediately overloaded, leaving many spending hours on hold or online only to face disconnected calls or crashing websites. At the best of times, unemployment insurance processes are difficult to navigate. Even before the coronavirus hit, one out of four people who were eligible did not receive benefits. Demanding eligibility rules exclude many more. | As researchers who have documented administrative burdens in government programs, it is all too apparent to us that a crisis response built on the existing system will fall short. The $2.2 trillion Cares Act relies on state unemployment systems that were immediately overloaded, leaving many spending hours on hold or online only to face disconnected calls or crashing websites. At the best of times, unemployment insurance processes are difficult to navigate. Even before the coronavirus hit, one out of four people who were eligible did not receive benefits. Demanding eligibility rules exclude many more. |
| Florida’s unemployment benefit system exemplifies the problem. An adviser to Gov. Ron DeSantis described the system, designed by his predecessor, Senator Rick Scott, as intended to make “it harder for people to get benefits” and to keep unemployment numbers low enough “to give the governor something to brag about.” One unemployed Floridian noted, “It’s very obvious that this is a weaponized system to keep you from using your benefits.” Florida is no outlier: some applicants in New York were forced to fax documents as part of the process. | Florida’s unemployment benefit system exemplifies the problem. An adviser to Gov. Ron DeSantis described the system, designed by his predecessor, Senator Rick Scott, as intended to make “it harder for people to get benefits” and to keep unemployment numbers low enough “to give the governor something to brag about.” One unemployed Floridian noted, “It’s very obvious that this is a weaponized system to keep you from using your benefits.” Florida is no outlier: some applicants in New York were forced to fax documents as part of the process. |
| For too long, administrative processes have been designed to prevent claimants from incorrectly receiving benefits, rather than ensuring that those in need get help. The red tape and delays we place on people, onerous before the coronavirus outbreak, have become catastrophic in the midst of a pandemic. Just witness the 10,000 people waiting for hours at a San Antonio food bank. | For too long, administrative processes have been designed to prevent claimants from incorrectly receiving benefits, rather than ensuring that those in need get help. The red tape and delays we place on people, onerous before the coronavirus outbreak, have become catastrophic in the midst of a pandemic. Just witness the 10,000 people waiting for hours at a San Antonio food bank. |
| What’s the solution? We need to flip the script. States should authorize unemployment claims first and seek complete eligibility verification later. The government has extraordinary powers to claw back money improperly claimed. States could also reduce administrative burdens by relaxing weekly documentation of employment status. This would help relieve overloaded administrative systems, freeing up time to process new claims. Some may get money they shouldn’t, but a national crisis compels us to prioritize helping millions of Americans put food on their tables. | What’s the solution? We need to flip the script. States should authorize unemployment claims first and seek complete eligibility verification later. The government has extraordinary powers to claw back money improperly claimed. States could also reduce administrative burdens by relaxing weekly documentation of employment status. This would help relieve overloaded administrative systems, freeing up time to process new claims. Some may get money they shouldn’t, but a national crisis compels us to prioritize helping millions of Americans put food on their tables. |
| Small business owners face burdens similar to the unemployed, including broken websites, confusing instructions and the sense that the government doesn’t really want to help. The recently created Paycheck Protection Program promises $349 billion in relief, but requires business owners to provide documentation of payroll, mortgage interest and rent payments, as well as utility costs for the eight-week period following the loan. Additional complexity comes from private banks administering the loans. Concerned about being responsible for verifying eligibility, many banks are just helping existing small business customers rather than new clients. Only businesses with the connections and capacity to manage the paperwork stand to receive the limited funds. | Small business owners face burdens similar to the unemployed, including broken websites, confusing instructions and the sense that the government doesn’t really want to help. The recently created Paycheck Protection Program promises $349 billion in relief, but requires business owners to provide documentation of payroll, mortgage interest and rent payments, as well as utility costs for the eight-week period following the loan. Additional complexity comes from private banks administering the loans. Concerned about being responsible for verifying eligibility, many banks are just helping existing small business customers rather than new clients. Only businesses with the connections and capacity to manage the paperwork stand to receive the limited funds. |
| It doesn’t have to be this way. Many European governments simply guaranteed payroll for employers so that businesses would stay afloat and workers would keep their jobs. The United States could still do the same thing. For example, Representative Pramila Jayapal, Democrat of Washington State has proposed that the Treasury Department use previous tax return data to estimate three months of employer wage costs, and provide that money in the form of a grant to businesses that would continue to pay their workers. Employers would receive aid quickly, workers would keep their paychecks and state unemployment insurance systems would be less overwhelmed. | It doesn’t have to be this way. Many European governments simply guaranteed payroll for employers so that businesses would stay afloat and workers would keep their jobs. The United States could still do the same thing. For example, Representative Pramila Jayapal, Democrat of Washington State has proposed that the Treasury Department use previous tax return data to estimate three months of employer wage costs, and provide that money in the form of a grant to businesses that would continue to pay their workers. Employers would receive aid quickly, workers would keep their paychecks and state unemployment insurance systems would be less overwhelmed. |
| Even the direct relief dollars allocated by Congress will exclude many who should be getting the money. Those $1,200 checks? Almost everyone who qualifies and files taxes or gets a Social Security benefit will receive a direct deposit into his or her checking account. But many workers don’t file taxes because their earnings are too low, meaning they won’t receive a direct deposit. Even if they figure out that they are eligible, and how to file for the benefit, relief may take as long as five months. Lisa Cook, an economist at Michigan State, offers a solution: use mobile payments to reach these people. | Even the direct relief dollars allocated by Congress will exclude many who should be getting the money. Those $1,200 checks? Almost everyone who qualifies and files taxes or gets a Social Security benefit will receive a direct deposit into his or her checking account. But many workers don’t file taxes because their earnings are too low, meaning they won’t receive a direct deposit. Even if they figure out that they are eligible, and how to file for the benefit, relief may take as long as five months. Lisa Cook, an economist at Michigan State, offers a solution: use mobile payments to reach these people. |
| If Congress wants to quickly deliver aid to the people who need it the most, expanding food stamps, or the Supplemental Nutrition Assistance Program (SNAP), makes sense. Beneficiaries need not jump through any new hoops; the money simply appears on their beneficiary card. SNAP is a strikingly effective stimulus in a slowing economy. It helps individuals in need who spend the money quickly. Every additional dollar spent on SNAP generated $1.74 in economic activity during the early stages of the Great Recession. | If Congress wants to quickly deliver aid to the people who need it the most, expanding food stamps, or the Supplemental Nutrition Assistance Program (SNAP), makes sense. Beneficiaries need not jump through any new hoops; the money simply appears on their beneficiary card. SNAP is a strikingly effective stimulus in a slowing economy. It helps individuals in need who spend the money quickly. Every additional dollar spent on SNAP generated $1.74 in economic activity during the early stages of the Great Recession. |
| Congress can also protect SNAP by blocking a rule Trump proposed last year that will make it harder to receive benefits. Currently, 43 states use administrative data from other welfare programs to make enrollment in SNAP quick and easy. The Trump policy would limit how states use this “categorical eligibility” technique. In addition to immediately removing 3.1 million people from SNAP who have more than $2,250 in assets, the rule will cause additional benefit losses when 17.2 million households encounter a far more burdensome application process. | Congress can also protect SNAP by blocking a rule Trump proposed last year that will make it harder to receive benefits. Currently, 43 states use administrative data from other welfare programs to make enrollment in SNAP quick and easy. The Trump policy would limit how states use this “categorical eligibility” technique. In addition to immediately removing 3.1 million people from SNAP who have more than $2,250 in assets, the rule will cause additional benefit losses when 17.2 million households encounter a far more burdensome application process. |
| Making coronavirus relief difficult is a political choice, one based on the assumption that administrative complexity is a virtue and ease of access a vice. Programs like Social Security reflect an alternative approach, delivering benefits with minimal burdens and minimal fraud. The costs of a dysfunctional administrative system are easy to ignore when they are imposed on other people. If there is a silver lining to this crisis, a public newly aware of administrative burdens will demand something better. Will our political leaders reconstruct the administrative state to deliver the help that we have been promised? | Making coronavirus relief difficult is a political choice, one based on the assumption that administrative complexity is a virtue and ease of access a vice. Programs like Social Security reflect an alternative approach, delivering benefits with minimal burdens and minimal fraud. The costs of a dysfunctional administrative system are easy to ignore when they are imposed on other people. If there is a silver lining to this crisis, a public newly aware of administrative burdens will demand something better. Will our political leaders reconstruct the administrative state to deliver the help that we have been promised? |
| Pamela Herd (@pamela_herd) and Donald Moynihan (@donmoyn) are professors at the McCourt School of Public Policy at Georgetown University and the authors of “Administrative Burden: Policymaking by Other Means.” | Pamela Herd (@pamela_herd) and Donald Moynihan (@donmoyn) are professors at the McCourt School of Public Policy at Georgetown University and the authors of “Administrative Burden: Policymaking by Other Means.” |
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