Thompson Opening Statement at Select Revenue Measures Subcommittee Hearing on Consequences of Inaction on COVID Tax Legislation
(As prepared for delivery)
Federal tax measures from the CARES Act and the Families First Coronavirus Response Act played a critically important role in sustaining workers and families during the COVID-19 pandemic. The Economic Impact Payments and the Employee Retention Tax Credit—together with the supplemental federal unemployment insurance benefits—helped millions of families weather this year’s economic catastrophe.
Over the course of a few weeks this spring, more than 21 million jobs evaporated, and millions more were scaled back to fewer hours and less pay. Gig work dried up. Almost overnight, we went from the lowest unemployment rate in fifty years to the highest unemployment rate since the Great Depression.
From one end of the country to the other, people found themselves with no paychecks – in the middle of a public health crisis. Hitting the pavement to find a new job was not only risky, but mostly futile, because the jobs just weren’t there. In February, there were eight unemployed workers for every ten available jobs. In April, there were 46 unemployed workers for every ten available jobs.
People needed help quickly, and I’m proud of how Congress and the Administration stepped up. We did our jobs. The EIPs and the Employee Retention Tax Credit played an indispensable role in helping Americans make it through the deepest economic catastrophe of most of our lives.
- They helped families feed their kids.
- They helped keep a roof over tens of millions of citizens’ heads.
- They helped Americans continue to pay their bills while they were unable to work.
- Finally, the job retention credit helped people hold on to their health insurance during a global pandemic.
At the time we designed those measures, we didn’t know for sure how deep this recession would be, or how long it would last. There was a lot of optimism about a V-shaped recovery that would quickly bounce back to its previous high employment levels and steady growth.
We now know that those hopes were overly optimistic. Instead of a V-shaped recovery, we’re seeing a K-shaped recovery, with some sectors and groups recovering fast and others forced to wait-- while getting worse off by the day. 94 percent of the jobs in financial services are back, but millions of people in hospitality, retail, manufacturing, and food service still have no work. People of color, women, and workers with less education are experiencing a much slower recovery than others.
It’s been six months since the pandemic struck the U.S. in earnest, and six weeks since the expanded UI lapsed. Millions of families have exhausted their savings and their EIPs paying for necessities: food, housing, utilities, health insurance, car payments.
It is painfully clear that millions continue to struggle, and the hole they are in is getting deeper. According to Census data for July, 13 million adults couldn’t pay their rent. 29 million adults sometimes or often didn’t have enough to eat over the past week. And one in three kids did not get enough to eat because the household couldn’t afford it
Let that sink in. One in three kids is not getting enough to eat because their families can’t afford to feed them.
The economy was broken earlier this year, and we took extraordinary measures to try to protect families during the crisis. Well, millions of families—and millions of children—are still in crisis.
That’s why the House passed the Heroes Act on May 15th, approving a second round of EIPs and other supports for struggling families. For four months, the Senate has done nothing to help these families.
Today’s hearing will examine the real-life consequences of this inaction.