Food stamps already work this way, to some extent. The Supplemental Nutrition Assistance Program is a claim, meaning that as more people experience financial hardship and eligibility, the federal government increases its spending to make sure they can benefit. “As your earnings fall, you automatically gain fitness, or increase your benefit,” Dr. Hoynes said. Unlike, for example, the strictly block-awarded Temporary Assistance for Needy Families cash assistance program, SNAP is increasing rapidly and strongly in a downturn.
Yet, in both the Great Recession and the pandemic, Congress had to act to raise food stamps to fight such extreme revenue losses. Rather, it can be instructed: As the unemployment rate rises, SNAP benefits can automatically increase by certain percentage points. Fitness restrictions can also be relaxed automatically to keep families who have suddenly lost income fed while injecting rapid stimulus into the economy.
Unemployment insurance can automatically add weeks as unemployment increases, as people will be more likely to be out of work longer in a weak economy. The program already has extensive benefits intended to be triggered by unemployment reaching certain levels in each state, but those levels are set so high that they are rarely, if ever, met. Rental assistance similar to that offered by Congress last year could receive an influx of funding when tenants face mass eviction. More federal funding for temporary assistance for needy families can be automatically sent to states so they can help more people. Federal aid to state and local governments could flow due to declines in taxable revenue draining their coffers.
The most important thing is to do these things now, not in the midst of an epic economic collapse. “It is very, very difficult to put up a program in the midst of a crisis,” said Dr. Edelberg noted. During the pandemic, rental assistance took months to actually reach tenants as states scrambled to create portals and programs. The Paycheck protection program has hurt many parts of its launch. “It is critical to put this infrastructure in place ahead of time,” she said.
An adequate response to financial hardship should not depend on the political alignment of Congress and the White House, but it is currently. Republicans were possibly motivated to support the initial rounds of Covid relief because they controlled the Senate and the White House and ran the risk of bearing the blame for a poor response. The nature of the crisis was also so widespread and so urgent that it prompted lawmakers to act quickly. Eleven Republicans were out of power in 2021, but they refused to vote for any further stimulus. “My concern is that with the Congress being so divided, they may not be able to agree in the next recession,” she said. Dixon said.
However, the obstacles that stand in the way of congressional action are not hard to see. Once a crisis is over, it is difficult to get legislators to focus their limited attention on repairing systems to be ready for the next one. All the early pandemic improvements to unemployment insurance, for example, have lapsed, and the reform of the system did not even make it into the eventually doomed Build Back Better package. Legislators can enjoy the opportunity to intervene during difficult times and vote to make changes as a way to show that they are responding, an opportunity that would diminish if our systems were set up to respond on their own.