American Families Shouldn't Have To Beg

In late October, my wife went into the hospital; doctors kept thinking she had COVID-19. They tested her three times, in fact, and each one came back negative. As it turns out, it was septic shock, not COVID. But what she was going through, all the tests, the three days in the ICU, then two and a half more weeks in the hospital fighting to recover, was – according to her doctors — exactly how they treated patents in their COVID-19 ward. Now that it’s January, and Mel is out of the hospital, the bills are rolling in, one after another, and each one is for several thousand dollars.

With every bill, I can’t help but be very grateful that when layoffs were circulating at my job in March, and again in July, that I was spared. But I also can’t help thinking about all the families who haven’t been so fortunate, had a loved one in the hospital with COVID-19, and are now stuck with extreme medical bills, and a pithy $600 stimulus check. Or the families who have loved ones suffering from COVID complications and are unable to resume their previous employment.

When president Donald Trump came out and said that $600 isn’t enough for the American family, I agreed with him (for once). However, he was pushing for $2000 checks, and while it’s a nice thought, that’s not enough either. In late 2019, just before the pandemic hit, GOBankingRates polled Americans to see how much money they had in their savings accounts. They have been doing this since 2014, and what they found was that 69% of respondents had less than $1000 in savings. That was actually up from the year before, when only 58% of respondents said they had less than $1000 in the bank. Long story short, Americans families were broke going into the pandemic — and now, 10 months in, things are not looking much better.

According to CNN business, there are, right now, 10 million fewer jobs than at the start of the pandemic. Each one of those cut jobs most likely represents a struggling family. And without the help of stimulus money, struggling families are making some hard decisions to pay their bills.

To put that struggle into perspective, the RAND corporation performed a survey in May 2020, just after the CARES act was passed. They looked at how Americans are doing financially because of COVID-19, and one of the questions they asked families hit the hardest was how they are paying their bills. What they discovered was this: “Among households that are struggling to make ends meet, we found that approaches vary significantly across the income spectrum. Unsurprisingly, low-income households have few options. They report borrowing from friends and family, selling possessions, and simply being unable to meet expenses. Consistent with these findings, evidence from other surveys reveals rising food insecurity among low-income households.”

According to the RAND survey, middle income families were struggling too; however, they were taking a different route to pay bills. “Middle-income households report using formal credit: putting expenses on credit cards with the hopes of paying the debt off over time, using bank loans and lines of credit, and, in some cases, taking on payday loans,” the study says. Now keep in mind, this was after Americans received a $1200 stimulus check, twice what families received in January.

Now to give you an idea of the impact the CARES Act had on families, researchers at Columbia University’s Center on Poverty & Social Policy estimated that without that federal response, U.S. poverty in April would have jumped to 19.4%. Instead, the month topped out at 13.9%. This means that nearly 18 million people were kept from falling into poverty because of this federal response. All in all, the CARES act had an impact, and just goes to show that a stimulus plan can help American families in the short term.

Yet here it is January 2021, and struggling American families are sitting with half the amount of stimulus money they were granted in early 2020, and half the unemployment boost.

The simple reality is, American families were struggling before the pandemic, they were struggling when they received the last Federal aid, and now they are really struggling — and sitting with a $600 stimulus check, as if that was going to make the difference. It doesn’t. And the federal government, frankly, isn’t moving quickly enough.

Now of course, there is some optimism with the distribution of a vaccine, and the brand new Biden Administration. Joe Biden has said that the $600 stimulus checks Americans received in January is just a beginning. Recently, he outlined a proposal for a $1.9 trillion dollar “American Rescue Plan,” with over $400 billion earmarked to combat the pandemic and $350 billion to address budget shortages on a state and local government level. And, perhaps most pertinent to those who are struggling, The New York Times says “[T]he plan would also include $1,400 direct payments to individuals, more generous unemployment benefits, federally mandated paid leave for workers and large subsidies for child care costs.”

The Times published a breakdown of the stimulus plan. In addition to the $1400 checks for people below a certain income threshold, the plan also includes other measures to provide families with much-needed financial relief:

• $400 a week in unemployment benefits — lower than the weekly $600 unemployed Americans received in March, but higher than the $300 benefits they saw in December.
• A raise in federal minimum wage to $15, up from its current rate of $7.25
• 14 weeks of paid leave for workers dealing with the closing of schools or care facilities and a $1,400 benefit for those eligible; these provisions would be in place until the end of September 2021.
• An expanded child tax credit, in which families making less than $125,000 per year could receive up to $4000 for one child 13 or under, and $8,000 for two or more.

Democrats will soon have a majority in the House and the Senate, so there is hope that the additional aid will move a little faster than it did in 2020.

The fact remains, American families are in financial shambles right now. Food insecurity is on the rise, many families are scraping by, selling their possessions, or borrowing from family. Some are taking out debt to pay for basic needs, and I assume, medical bills because of COVID-19 complications. All of it adds up to one simple plea: we need help! We need help now, and $600 is just a drop in the bucket.