[Senate Hearing 117-65]
[From the U.S. Government Publishing Office]
S. Hrg. 117-65
THE CORONAVIRUS CRISIS: PAVING THE WAY
TO AN EQUITABLE RECOVERY
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HEARING
BEFORE THE
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
ON
EXAMINING THE AFFECT OF THE CORONAVIRUS CRISIS AND THE IMPORTANCE OF A
RECOVERY THAT SUPPORTS ALL AMERICANS
__________
FEBRUARY 18, 2021
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Printed for the use of the Committee on Banking, Housing, and Urban
Affairs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available at: https: //www.govinfo.gov /
__________
U.S. GOVERNMENT PUBLISHING OFFICE
45-477 PDF WASHINGTON : 2021
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COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
SHERROD BROWN, Ohio, Chairman
JACK REED, Rhode Island PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey RICHARD C. SHELBY, Alabama
JON TESTER, Montana MIKE CRAPO, Idaho
MARK R. WARNER, Virginia TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia KEVIN CRAMER, North Dakota
STEVE DAINES, Montana
Laura Swanson, Staff Director
Brad Grantz, Republican Staff Director
Jeremy Hekhuis, Deputy Staff Director
John Crews, Republican Policy Director
Cameron Ricker, Chief Clerk
Shelvin Simmons, IT Director
Charles J. Moffat, Hearing Clerk
(ii)
C O N T E N T S
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THURSDAY, FEBRUARY 18, 2021
Page
Opening statement of Chairman Brown.............................. 1
Prepared statement....................................... 28
Opening statements, comments, or prepared statements of:
Senator Toomey............................................... 4
WITNESSES
John A. Costa, International President, Amalgamated Transit Union 6
Prepared statement........................................... 29
Responses to written questions of:
Senator Hagerty.......................................... 44
Jamael Tito Brown, Mayor, Youngstown, Ohio....................... 8
Prepared statement........................................... 34
Jyoshu Tsushima, Staff Attorney, Legal Aid Society of Columbus... 9
Prepared statement........................................... 35
Responses to written questions of:
Chairman Brown........................................... 44
Senator Sinema........................................... 47
Douglas Holtz-Eakin, President, American Action Forum............ 11
Prepared statement........................................... 36
Gianni Cracchiolo, Manager, Sal & Jerry's Bakery................. 12
Prepared statement........................................... 42
Additional Material Supplied for the Record
Letter submitted by Coalition of Groups, Activists, and
Legislators.................................................... 49
Letter submitted by National Taxpayers Union..................... 53
Letter submitted by Nationals Restaurant Association............. 56
Letter submitted by Americans for Prosperity..................... 57
Letter submitted by Rebecca Bodenheimer.......................... 59
Letter submitted by Rory Cooper.................................. 62
Letter submitted by Dani Ritchie................................. 66
Letter submitted by FreedomWorks................................. 67
Letter submitted by Heritage Action for America.................. 70
Statement submitted by The Heritage Foundation................... 72
Letter submitted by Lindsey Holtzman............................. 80
Letter submitted by IAAPA........................................ 84
Letter submitted by International Franchise Association.......... 86
Letter submitted by Knoebels..................................... 87
Letter submitted by Foundation for Government Accountability..... 89
Letter submitted by Philadelphia Children's Alliance............. 93
Letter submitted by Taxpayers Protection Alliance................ 94
(iii)
THE CORONAVIRUS CRISIS: PAVING THE WAY TO AN EQUITABLE RECOVERY
----------
THURSDAY, FEBRUARY 18, 2021
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 11 a.m., via Webex, Hon. Sherrod
Brown, Chairman of the Committee, presiding.
OPENING STATEMENT OF CHAIRMAN SHERROD BROWN
Chairman Brown. The hearing will come to order. The hearing
is in the virtual format which we have done under Senator
Toomey and under Senator Crapo a number of times in the past.
For those joining remotely, there are a few reminders. Once
you start speaking, both for witnesses and Members, there will
be a slight delay before you are displayed on the screen. Do
not let that throw you. Just begin.
To minimize background noise, please click the mute button
until it is your turn to speak or ask questions. That will help
us. If there is a technology issue, we will move to the next
Senator. Cameron Ricker is so good at this, so he will help you
fix that. But we will move to the next Senator or witness until
it is resolved just to keep things moving.
Each witness will have 5 minutes to speak for your
statement, of course. For all Senators, the 5-minute clock
still applies for your questions. You can see the 5-minute
clock on the screen for most of you.
At 30 seconds remaining--and Chairman Crapo set this up; I
think it is a good thing to do--you will hear a bell ring--you
should each hear it; we will all hear it--to remind you your
time is almost expired. Some people have trouble seeing the
clock, so it will ring again when your time has expired.
And to simplify the speaking order process, Senator Toomey
and I have agreed to go by seniority, not time of arrival, as
we do in person, but go by seniority for this hearing. It will
just be simpler.
So thank you for going through all that, and welcome to all
of you to the hearing, Members and witnesses.
It should not be a surprise that our first hearing is about
the coronavirus. It has affected every American's health and
home and family and workplace. It has obviously affected the
entire economy for nearly the last year.
On this and on all of the issues to come before this
Committee, we are going to get to work for all the Americans
who have not had much of a voice in Washington or in our
economy.
Ohioans and working families all over the country know what
that is like. They have too much experience watching the
largest multinational corporations thrive, while too often our
communities, our small businesses, our workers get left behind.
Long before the Great Recession, our trade and tax policy
abandoned the industrial heartland and working-class towns and
neighborhoods all over the country, frankly, too often with
bipartisan support. Communities from the Mahoning Valley to the
Mon Valley, from Newark, Ohio, to Newark, New Jersey, all
watched factory after factory close, with no plan to rebuild
our local economies. Entire neighborhoods and entire towns
hollowed out.
People felt like their hard work no longer paid off. For
Black and brown workers, it had never really paid off like it
should. They were the first to be preyed on by shady mortgage
lenders, the first to lose their jobs, the first to get
foreclosed on.
Now they feel like they are watching history repeat itself.
My colleagues on this Committee have heard me say many
times that this pandemic has been the ``Great Revealer''. It
has laid bare what so many Americans already knew: that
millions of workers have little economic security; they cannot
get a foothold in this economy, no matter how hard they work.
So many families are one emergency away from draining what
little savings they have, or turning to a payday lender, or
getting evicted.
If the bus quits running after 10 o'clock and she cannot
make it to her night shift, she loses her job. If the
restaurant where he works cuts back his hours, he has to choose
between paying the rent or paying the electric bill.
Last year, I was talking to a grocery worker in southwest
Ohio who told me, ``They call me `essential,' but I feel
expendable. They do not pay me much, they do not protect me at
work.''
It is not a coincidence that many of the workers
corporations treat as expendable are Black and brown workers;
so often they are women.
This pandemic has not just exposed racial disparities and
income inequality and gender disparities. It has made them
worse.
Black and brown Americans are more likely to work in
frontline jobs that cannot be done remotely, where they are
more likely to be exposed to the virus and the anxiety that
they bring home with them. They are less likely to have paid
leave, making them more likely to lose their job if they get
sick or if their child gets sick.
They have less savings to fall back on because of
generations of wealth inequality. Black small businesses have
closed at twice the rate of white small businesses.
The system that has been making it harder for their work to
pay off and putting their lives at risk for generations--long
before this virus appeared.
And as for the toll this pandemic has taken on women, ask
any mother how she is doing now. Millions of American women now
have had three jobs for the last 11 months: they are full-time
caregivers, they are teaching their children, they are doing
the job they had before the pandemic. And notice, only one of
those three jobs actually comes with a paycheck.
For 2.3 million women, they simply cannot do all three.
They have been forced out of the workforce altogether. That is
2.3 million families scraping by with less, trying to figure
out how they will pay the mortgage or pay for health insurance
or pay for groceries this month.
It is always the same story. When the biggest corporations
and the largest banks need help, their allies in Washington
spring into action. But when the rest of the country needs
investment and support, they pretend we cannot afford it.
Today, under new leadership on this Committee, we have a
clear message: Those days are over.
We will not settle for less. Black and brown workers do not
have to settle for a system that treats them and their lives as
expendable. Mothers do not have to settle for doing three jobs
with no help. Small businesses like are represented on this
panel today do not have to settle for scraps while they watch
corporate profits soar.
Ohio and the rest of the country do not have to settle for
a Wall Street-first recovery.
We are the world's richest country with the world's largest
economy. We have the resources to rise to meet the challenge
for everyone.
That is what President Biden is doing with his rescue plan.
It is what we will do on this Committee, starting today.
Our witnesses will make clear the importance of a recovery
that supports all Americans. We will hear from the president of
the Nation's largest transit workers union, who is working to
keep his members safe amidst great difficulty.
We will hear from a small business owner who is struggling
to keep his doors open and his workers on the job.
We will hear from a legal services lawyer from Columbus who
has spent much of his time trying to help people stay in their
homes.
We will hear from the mayor of an industrial town that has
suffered disinvestment for decades, has been stereotyped by
national pundits, and is now facing the same challenges as
cities and towns and neighborhoods in all of our States.
These are the voices that have been ignored or shouted
down, even ridiculed by corporate elites, their newspaper of
record, and too many in Washington. That ends now.
We will get help to people--all people--to stay in their
homes and pay their bills. We will keep the doors open at
minority-owned businesses that entrepreneurs have worked their
whole lives to build. We will keep our buses and trains running
and keep those workers on the job.
It is about recovery, it is about rebuilding. It is about
empowering all Americans--no matter who you are, no matter
where you live, no matter what kind of work you do--it is about
investing in all communities.
We will show the American people--all people--that for a
change their Government is on their side. It is time to get to
work.
Senator Toomey.
OPENING STATEMENT OF SENATOR PATRICK J. TOOMEY
Senator Toomey. Thank you, Chairman Brown.
Less than a month ago, President Biden made a call for
unity, and he promised a COVID strategy ``based on truth, not
politics,'' ``based on science, not denial.'' That is a quote.
And it is what makes it so disappointing that our Democratic
colleagues and the White House are pushing this $1.9 trillion
spending bill. They are using a process that is designed to not
find common ground, designed to be purely partisan. It is not
informed by any objective measure of needs. The only organizing
principle seems to be to spend as much money as possible and
willfully ignore the adverse impacts of these policies.
Now, COVID had been an extraordinary crisis, no question
about it, and Congress responded in an extraordinary way. When
the Government shut down the economy because of COVID in March
and April of last year, it produced a crisis that Congress
responded to with, over the course of last year, five
overwhelmingly bipartisan bills, almost $4 trillion in relief.
One of these bills was signed into law less than 2 months ago.
And now, and for some time now, the economy has been in a
recovery mode.
In April, the unemployment rate was 14.8 percent. In
January of this year, it is down to 6.3 percent, and 18 States
have unemployment rates below 5 percent. GDP growth in the last
two quarters has been extraordinary, and the consensus for this
entire year is to have extremely strong economic growth, could
be as much as 5 percent.
Now, there is certainly serious suffering occurring in
those industries, among workers in the industries that have
been hard hit: hospitality, travel, entertainment, leisure. But
this bill is not targeted at them. This bill is a wasteful, not
at all targeted, and largely unrelated to COVID bill. Just
consider some of the items.
The so-called universal stimulus checks, the vast majority
of the 160 million Americans that have received checks never
experienced any loss of income. And under President Biden's
plan, if they follow the eligibility criteria of the first two
rounds, then there will be families with six-figure incomes, no
loss of income, and they will receive another $10,000-plus in
checks.
Extra unemployment insurance benefits will result in about
half of all beneficiaries getting paid more not to work than
they get paid to work. How does that respect the dignity of
work?
A minimum wage increase to $15 that the CBO projects will
cost 1.3 million to 3.7 million jobs and deny so many young
people especially that first step on the economic ladder.
We have a witness today, Gianni Cracchiolo, and he is going
to tell us firsthand the kind of impact on his employees of the
$15 minimum wage he has been subject to.
State and local government, another terrible idea driven by
apparently a desire to bail out fiscally irresponsible cities
and States.
Consider this: In the aggregate, State and local
governments for 2020 took in an all-time record amount of
revenue.
Let me say this again: There was no huge collapse of
revenue. In 2020, State and local governments set a new all-
time record high for revenue. That does not count the $572
billion that we sent them anyway over the course of last year,
and now we are told we need to send them another $350 billion
on top of that.
Transit, $30 billion. Congress already provided $39 billion
for transit of which $14 billion was appropriated just 2 months
ago. We are now supposed to send yet another $30 billion.
Housing, $40 billion for housing assistance. We provided
$40 billion in response to COVID and $25 billion for rental
assistance, again, less than 2 months ago. And that is all, of
course, on top of the $800 billion the Federal Government has
provided in stimulus checks and unemployment insurance benefits
to cover expenses like rents and mortgages.
So, Mr. Chairman, it is disappointing to me that the
President's call for unity is starting to ring hollow. All
five--all five--of the relief bills enacted to do were
overwhelmingly bipartisan. There is a reason that this one is
not, and it is because there is no rational economic
justification for what is in it. This bill is not about COVID.
It is not about an economic recovery. It is not about stimulus.
It appears to be more about enacting a longstanding Democratic
Party wish list.
The focus of Congress should be working to return the
economy to the pre-COVID strength we had where we were at
record low unemployment levels and there were more job openings
than there were people looking for jobs. That is what we need
to get back to.
One of the things that we should be insisting on is that
schools reopen. The President says he is going to be guided by
science. Well, the science is in. CDC research shows it is safe
to reopen schools and it is necessary for the sake of our kids
that we do so. These closures have been very harmful to student
performance and well-being in a variety of ways.
So, Mr. Chairman, I think the focus should be on the
actions that will help this economy recover instead of using
the pandemic and the past economic crisis of early last year to
justify partisan policy priorities.
Chairman Brown. Thank you, Senator Toomey.
I will introduce the five witnesses, and then we will begin
in the order of introduction, so I will start with Mr. Costa.
After I introduce each of the five of you, Mr. Costa, your
testimony will go first.
Mr. John Costa is international president, Amalgamated
Transit Union. He joined Local 819 in his hometown of Newark,
New Jersey, as a rail maintenance worker about 40 years ago. He
was local president for three terms. Following heading the New
Jersey ATU, in 2010 he became international vice president and
international president in 2019. Welcome, President Costa.
Thank you for pushing for better wages and safer working
conditions for the transit workforce.
Mr. Jamael Tito Brown is the 51st mayor of the city of
Youngstown, Ohio. Prior to becoming mayor, he was chief deputy
treasurer overseeing day-to-day operations of the Mahoning
County Treasurer's Office. He was director of the Human
Relations Commission for the city of Youngstown. Last year, my
entire staff, my personal office and Committee staff, met with
Mayor Brown where he led a panel discussion about challenges
facing Ohio cities, and we know that there are many of those.
Welcome, Mayor. Nice to have you.
Mr. Jyoshu Tsushima has been staff attorney at the Legal
Aid Society of Columbus, Ohio, with the housing team at the
Legal Aid Society since December of 2016. Columbus is the 14th
largest city in the country. Thousands of its residents are
struggling to pay their rent, pay their mortgage, pay their
electric bill. They opened an eviction court in the Columbus
Convention Center. Mr. Tsushima is a strong advocate for
educating tenants who have to face that court in understanding
how housing relates to everything else in people's lives.
Welcome, Mr. Tsushima. Nice to see you.
Mr. Douglas Holtz-Eakin is president of the American Action
Forum. He served in a variety of policy positions inside and
outside of Government: Chief Economist at the Council of
Economic Advisers; Director of the nonpartisan Congressional
Budget Office; the first time I ever interacted with him, he
was director of domestic and economic policy for the McCain
Presidential campaign; and a Commissioner on the Financial
Crisis Inquiry Commission. Dr. Holtz-Eakin, I know we do not
always see issues the same way, but I thank you always for your
passionate defense, as the Ranking Member does, too, and we
welcome you back to our Committee.
Last, a man whom I have never met, Mr. Gianni Cracchiolo is
the manager of the family owned Sal & Jerry's Bakery in West
Babylon, New York. Sal & Jerry's Bakery is a retail/wholesale
bakery that supplies the public and distributors with Italian
cookies, pastries, and bread. Welcome, Mr. Costa, to the
Banking, Housing, and Urban Affairs Committee, and thank you
for joining us and sharing your story, which is very important
to us.
So, Mr. Costa, you can begin. Thank you.
You are on mute.
STATEMENT OF JOHN A. COSTA, INTERNATIONAL PRESIDENT,
AMALGAMATED TRANSIT UNION
Mr. Costa. OK. Every time I hit it, he hits it. All right.
It looks good.
Mr. Chairman, thank you for the opportunity to testify here
today. I am ATU International President John Costa.
Transit workers have been true heroes during this pandemic.
They put their lives on the line each day to keep America
moving. On behalf of the entire transit industry and our
riders, thank you for providing the funding necessary for
transit to survive. Without the $39 billion in emergency aid,
we would have come to a grinding halt.
The buses and trains have kept running, so grocery store
workers keep the shelves stocked, child care workers keep our
kids safe, and nurses keep us alive. You have also saved our
members' jobs, and we are all sincerely grateful.
Of course, the down side of staying on the job as a bus
operator is that you are continuously exposed to COVID. It is
no surprise that thousands of transit workers have tested
positive. We drive tin cans with bad air circulation. One
hundred thirty-five ATU members have died from this virus. TWU
has lost even more. Nearly 300 families will never be the same.
It did not have to be this way. With the proper
precautions, transit service can be delivered safely. But the
previous Administration let us down from the beginning. FTA
told us that masks were not recommended. We pleaded with them
to get PPE to the transit systems. They ignored us. So we went
out and got gloves and masks ourselves.
We also asked for help on social distancing, contact
tracing, and other protective measures. But FTA watered down
the CDC guidelines. So each day, more of our members and
passengers died.
We are still paying the price. President Biden was left
with no plan to get shots into arms and no reserves. In my home
State of New Jersey, transit purchased refrigerators to store
the vaccines so our members can get the shot right onsite. But
they have been empty for more than a month. So we wait for the
shots, putting our lives on the line every day. And yesterday,
another New Jersey transit operator, our member, passed away
due to COVID-19.
In addition to driving a bus, our members are also ``mask
police.'' They get attacked for enforcing the rules and trying
to stop the spread.
We had a baseball bat beating in California. We had a two-
by-four attack in Texas, a bone-breaking sucker punch in New
York. It is happening everywhere. President Biden's mask
mandate is a great start. We just need help enforcing it.
Social distance on a bus is very hard to do. Passengers in
many locations are allowed in the front row, too close for
comfort, and we are now collecting fares. A lot of our buses
have shields due to COVID. Most are better than nothing, but
still leave a gap exposing us to attacks. Our maintenance and
cleaning members do amazing jobs wiping down and cleaning the
services and our buses. While ridership is way down, buses are
still jammed in cities where people do not have a choice, not
just places like Newark where I am from. It is the Midwest, the
South. People have to go to work. They still have to come to
work. And they do not have a car. Essential workers like health
care workers, service job workers, grocery store workers, and
people who clean buildings, mostly of color--Blacks lag behind
whites in receiving the vaccine, and it is not just because
many are suspicious of the Government. Access is a key factor,
and transit plays a huge role. So transit systems across the
country are now giving free rides to vaccination sites, and our
members are proud to play a part in this effort.
But we cannot do this without funding. That is where you
come in. Local funding and fare box revenue are way down. We
are going to need Federal operations to assist for a long time.
ATU joins APTA calling for an additional $39.3 billion in
emergency funding. We appreciate the $30 billion in the new
bill and hope it gets spread around the whole country. We need
to continue to provide essential service in places like
Pittsburgh, Providence, Charlestown, Boston, Baltimore,
Nashville, Atlanta, and, of course, Youngstown. And I want to
give a shout-out to ATU Local 272 and everywhere in between.
Without us, transit-dependent people will suffer, and more will
die due to this pandemic. We cannot leave anyone stranded.
Also, Congress should do the right thing and provide hazard
pay for all frontline workers who have put their lives on the
line during this pandemic. People call us ``heroes,'' but at
the table we are ``zeros.'' We cannot change what has happened
in the past. Our members and our passengers we have lost are
not coming back. But we continue to support for transit a
strong Federal role in enforcing the safety measures and a seat
at the table for workers to express their COVID concerns. We
can work our way through these challenges and safely deliver
the transit services that transit needs.
Thank you.
Chairman Brown. Thank you very much, Mr. Costa.
Mayor Brown, welcome to the Committee.
STATEMENT OF JAMAEL TITO BROWN, MAYOR, YOUNGSTOWN, OHIO
Mr. Brown. Thank you, Chairman Brown and Ranking Member
Toomey, for inviting me to testify before the Senate Committee
on Banking, Housing, and Urban Affairs. I am Jamael Tito Brown,
the mayor of the city of Youngstown. We are a small city in the
Midwest of a population of about 67,000.
This is the 44th year since the closure of steel mills in
the city. As a legacy city, we have faced a history of
corporate corruption and political corruption causing
governmental mistrust among our community.
My Administration has had to overcome obstacles. Inadequate
educational resources and a lack of livable wage jobs have
always been historical problems in our community. A further
hindrance in the efforts for recovery is the decline of the
housing stock and transportation for those who need access to
employment.
The current global pandemic has hit this community harder
than ever. COVID-19 has been a great revealer of the health,
social, economic, and racial disparities of our community.
Small to medium-sized businesses are also feeling the impact of
the pandemic, especially minority-owned businesses, many of
whom did not have an established relationship with a banking
institution prior to the pandemic.
The needs of the city of Youngstown are no different from
other communities across the Nation. When a city is barely
rebounding from 50 years of economic decline because of outside
forces beyond our control, those rebounds have been further
eviscerated by COVID-19. Whatever Federal assistance is
provided must be a long-term coordinated strategy to get the
resources we need to address the public health impact of COVID-
19 and assure that housing, transportation, and small business
efforts are included in a Federal rescue plan. If any component
is ignored, the entire community structure will likely fail.
Our Ohio cities particularly have been hard hit by the
economic downturn of this pandemic. This is because cities in
Ohio rely on a municipal income tax as our primary source of
revenue. This tax source is much more susceptible to economic
conditions as opposed to more stable sales or property tax
revenue streams.
Youngstown has seen this impact firsthand. We are the
county seat of our county, Mahoning County. We have one of the
highest unemployment rates in the State, ranking 75th out of 88
in the counties. When unemployment is up, tax revenue is down.
These economic challenges have ripple effects all across our
regional economy--from housing, to public transit, and the
economic activity that sustains our small businesses.
In order to truly recover from the pandemic, relief has to
happen in our neighborhoods and our community where they not
only survive but they must thrive. Cities do not have an
opportunity to flounder for another 50 years.
A Federal rescue plan must include assistance to help build
back better legacy cities like Youngstown, Ohio. It should
include, as outlined by President Biden: assistance for the
production and distribution of COVID-19 vaccinations; rental
assistance for families; transit assistance to keep buses
running so essential workers can continue to work; direct
revenue replacement for cities; and small business support so
hardworking business owners can keep their workforce.
The relief should be flexible and free of bureaucratic red
tape so that the pace of recovery is not stymied by Federal
mandates. Transparency of local government spending should be a
guiding mandate to reinforce accountability and build trust
with communities.
Small cities need assistance. Small cities need assistance
quickly. Small cities need assistance desperately. Local
municipalities need direct revenue replacement like the $350
billion proposed by President Biden.
The impacts of COVID-19 are still affecting many of my
citizens I represent. Families are still hurting. We need
immediate relief during these difficult times. I urge you to
think of this as part of a long-term sustainable recovery plan
to build back and create thriving communities.
Thank you, Mr. Chairman.
Chairman Brown. Thank you, Mayor.
Mr. Tsushima, please proceed. Thank you.
STATEMENT OF JYOSHU TSUSHIMA, STAFF ATTORNEY, LEGAL AID SOCIETY
OF COLUMBUS
Mr. Tsushima. Chairman Brown, Ranking Member Toomey, and
distinguished Members of this Committee, thank you for inviting
me today to speak. My name is Jyoshu Tsushima, and I am a staff
attorney at the Legal Aid Society of Columbus, an Ohio
nonprofit that provides legal assistance to low- income
clients.
I run our eviction prevention clinic, the Tenant Advocacy
Project, where my team and I represent tenants in eviction
trials at Franklin County Municipal Court.
Every morning, Monday through Friday, we watch tenants and
landlords check into court. About 90 to 100 eviction trials are
scheduled per day, all for 9 a.m., before one magistrate. Our
court uses a ``cattle call'' system, where tenants, families,
landlords, and attorneys wait in an atrium for cases to be
called one at a time for trials that typically last only a few
minutes. My team tries to help as many families as we can and
scramble for solutions that will keep them housed, while
partner agencies try to connect them with rental assistance.
But this is not always enough, and many tenants still end up
being evicted.
Even before the pandemic, over 54,000 low- and moderate-
income households in central Ohio spent more than half of their
income toward housing. When these renters lost their jobs or
their hours were cut due to the pandemic, they were forced to
rely on erratic spurts of stimulus checks, unemployment, and
rental assistance, with little certainty about how much would
come or when it would arrive.
Not everyone is guaranteed assistance because there just is
not enough to go around. Even when assistance is available,
many low-income people are just paying off old debts, leaving
nothing to pay next month's rent. They are not hanging by a
thread; they are constantly waiting for one to be thrown down
to save them.
Being ill from COVID only makes it worse. Tenants cannot
pay rent when they catch COVID and miss work. Tenants cannot
even attend court when COVID puts them on a ventilator. We
recently asked a landlord's attorney to reschedule a case until
our hospitalized tenant was well enough to attend. The attorney
refused and replied that, although unfortunate, they would
still proceed with evicting the tenant because that is the
right of the property owner and that is how it always has been.
Eviction moratoriums are effective in preventing these
scenarios and the spread of COVID, but only if they are
enforced. The moratoriums under the CARES Act and CDC have
provided tremendous relief to many tenants. However, both
moratoriums have had loopholes that have allowed devastating
levels of evictions. The CARES Act moratorium had little
oversight and delegated enforcement to the self-regulation of
landlords. Current guidance for the CDC moratorium allows
landlords to continue filing evictions.
If a tenant asks our court for protection under the CDC
moratorium, the tenant must pass a ``truthfulness'' hearing to
prove that they are truly poor enough to qualify. One of our
clients lost his job due to the pandemic and was supporting
himself and his two kids on $98 weekly unemployment checks. His
landlord filed an eviction against him for failing to pay rent.
At trial the landlord's attorney grilled him on why he could
not spend any of his unemployment toward rent. Our client
responded that it all went to food and utilities. The attorney
then argued to the court that our client should have paid some
of the unemployment toward rent. The court declined this
argument and imposed the moratorium; however, the landlord then
filed a new eviction against our client, claiming that he was
now a holdover tenant.
This client was one of the lucky ones. Over 4,000 evictions
were filed in our court between September and December of 2020.
Less than 20 of them were actually halted by the moratorium.
Evictions and COVID are also hitting our Black communities
the hardest. About 60 percent of our clients at eviction court
are Black, while Black residents make up only 24 percent of
Columbus' population. You are also twice as likely to die from
COVID if you are Black than if you are white. None of my
clients chose their race or to be born poor or to die more
easily from COVID. The rest of us, however, have a choice in
either taking action or being bystanders to the consequences of
this pandemic.
We need more aggressive interventions, including reliable
rental assistance and effective eviction moratoriums. An
estimated 272,000 to 552,000 Ohio families are at risk of an
eviction without such intervention, while 7 to 14 million
households nationwide face the same peril.
These numbers do not even account for the millions of
homeowners facing similar threats through foreclosures.
Widespread displacement of these families will devastate our
Nation for years to come. We must do more to ensure that
everyone has a home, not just because it is right but because
it is necessary.
Thank you, and I look forward to your questions.
Chairman Brown. Thank you, Mr. Tsushima.
Dr. Holtz-Eakin, proceed. Thank you.
STATEMENT OF DOUGLAS HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION
FORUM
Mr. Holtz-Eakin. Chairman Brown, Ranking Member Toomey, and
Members of the Committee, thank you for the privilege of being
here today.
To date, the response of Congress to the COVID-19 recession
has been remarkable. It has been appropriately times,
appropriately scaled, and had the appropriate targeting and
composition.
Unfortunately, the American Rescue Plan does not meet any
of those criteria, at least not to my eye. It is not
appropriately timed. This is not March of 2020 when the economy
was falling at an annual rate of over 30 percent. Since then,
recovery has begun. We had strong economic growth in the third
and fourth quarters of 2020. The CBO projects that in 2021 the
economy will grow at 4.6 percent. And current estimates are
above that. The Federal Reserve Bank of New York has a Nowcast
estimate for the first quarter of this year at 6.7 percent. The
Federal Reserve Bank of Atlanta has its GDPNow of 9.5 percent.
So this is not an economy that is in recession and needs
stimulus. It is an economy that is growing rapidly and just
received nearly $1 trillion of Federal support in December of
last year. So the timing seems off.
It is not an appropriate scale. $1.9 trillion is just way
too large, even given the advocates of the need for stimulus.
The problem, according to the Congressional Budget Office, is
that the economy is roughly $450 billion--in 2012 dollars, but
roughly $450 billion below its potential because we have
millions of people out of work, and this is a $1.9 trillion
response to that problem. It is far too large. The theory of
stimulus is that when there are multiplier effects, a dollar of
Federal spending will deliver more than a dollar of additional
economic activity and income. As I say in my written testimony,
if you assume the multiplier is well less than one-half--the
economy will overheat by the end of this year if we put $1.9
trillion in stimulus in. So the scale is all wrong.
We are not sure of some of the elements of the plan as
well. The Ranking Member noted the housing assistance in this
bill. Combining the housing assistance from December with the
additional proposed in this bill would give you something that
is roughly double the problem, as I estimated, and that ignores
any income support those same individuals may have gotten
through the unemployment insurance, the economic support
payments, the checks that the households have received. So the
scale seems wrong for the problem that we have.
The composition and the targeting is at odds with the basic
idea. Certainly I do not think it should be thought of as
stimulus. The real problem is the recession came from the
disease. It is the coronavirus that is the problem. What we saw
in March and April of 2020 is people stopped spending on
services. They did not go out and engage in any service that
would involve personal contact and, thus, the risk of infection
and transmission. In particular, the affluent households in
America dropped their spending dramatically. That spending has
not returned, and there is nothing in this bill that would
restore the spending of those affluent households. There is not
a UI provision; there is not a check. There is not any of those
elements that add up to $1.9 trillion that will solve that
problem. That problem gets solved only by addressing the virus
itself. We should support every effort on vaccination, on
testing, on contact tracing, and on fighting the coronavirus,
and that in the end will restore the economy, and these will
not. That spending still remains missing in action.
There are other compositional issues. This is not targeted
on those who have suffered any financial distress. It is a
broad-based program. The composition of some of the elements I
think are at odds with good economics. Raising the Federal
bonus on unemployment insurance to $400 a week is simply too
large, and extending it through the end of the summer when we
expect the labor market to have been restored to functioning
because of the vaccination efforts really will interfere with
recovery and not support it.
There is nothing about raising the minimum wage to $15 an
hour in the middle of this that will enhance recovery. It will
damage the small businesses, a quarter of which have already
shut their doors in America. And there are things in here that
have nothing to do with COVID-19, with recovery from recession.
It contains a bailout of the multi-employer pension plan that
is a disappointment given the bipartisan efforts to do that in
a sensible fashion. It contains expansions of the EITC and
child credits, for example, that look like permanent policy. It
might make sense, but it has nothing to do with COVID-19.
So I find this a disappointing effort. The Congress has
done so well in responding to COVID-19 thus far, and I would
encourage the Committee to look in another direction.
Thank you.
Chairman Brown. Thank you, Dr. Holtz-Eakin.
Mr. Cracchiolo, welcome to our Committee. Thank you.
STATEMENT OF GIANNI CRACCHIOLO, MANAGER, SAL & JERRY'S BAKERY
Mr. Cracchiolo. Chairman Brown, Ranking Member Toomey, and
distinguished Members of the Senate Banking Committee, thank
you for the invitation to testify today.
I am Gianni Cracchiolo. My family owns Sal & Jerry's Bakery
in New York. Sal & Jerry's Bakery is a retail and wholesale
bakery that supplies the public with Italian baked goods. My
father and his cousin, immigrants from Italy, founded Sal &
Jerry's Bakery in 1983 in Bensonhurst, Brooklyn.
Our bakery was a staple in our community for nearly 40
years until we were, unfortunately, forced to close our doors
in August of 2020. This bakery was our family's legacy, one
filled with an entrepreneurial spirit, and rich with tradition,
culture, and love. It was the quintessential American Dream for
immigrants who came to this country to provide a better life
for their families.
Minimum wage hikes and other State and Federal regulations
acted as a silent killer that slowly chipped away at revenue
and caused our bakery to perish. COVID-19 and the ensuing
lockdowns were not the main cause of our closure, but were the
straw that broke the camel's back. Coronavirus should not be
used as the scapegoat by policymakers to further ignore the
fact that small businesses are vanishing in this country due to
Government regulations making it difficult to succeed.
The decline in growth and long-term viability of our bakery
became evident during the first few years of minimum wage
increases in New York. At our retail bakery, we had three tiers
of wages. The first tier was our night bakers, who got paid a
premium for shift differential. The second tier was day shift
bakers, and the third tier was general laborers. General
laborers are product packers, retail counter service, and
maintenance workers. These were individuals who typically
consist of working students, entry-level employees, and hourly
staff. These individuals started at minimum wage as they began
to learn the trade and advance in their roles.
As Tier 3 minimum wage employees' pay increased $1 per
fiscal year, wages began creeping up to the Tier 2 wages, and
this is where the problem started. You cannot justify the fact
that working high school students or entry-level employees with
no prior experience should be making the same wages as
experienced staff. It is neither fair nor ethical. As years
passed, my Tier 2 workers began to take notice of the minimum
wage increases and demanded more pay to compensate for their
experience and skill. It was soon a domino effect when the
first-tier employees wanted raises. We found ourselves with our
backs against a wall in a situation where all salaries needed
to increase. This crippled us.
To put it into perspective, each year that the minimum wage
increased $1, payroll for the year went up $40,000. Multiply
that by the number of years it has gone up; we are now at
$120,000 total. This chokehold was something that a small
bakery could no longer withstand. I needed to make up for these
increases, and the only way to do so was to pass it onto our
consumers. How much is someone willing to pay for a loaf of
bread or a pound of cookies? At some point, people who are used
to paying a certain price for a loaf of bread are going to
start to complain, and that is exactly what they did.
Customers began to shop for their baked goods at
supermarkets and large box stores. These stores offered lower-
quality versions of our products at a price point that
customers were comfortable with. The corner bakery where they
used to get their daily bread was now a luxury item only to be
bought on special occasions and holidays. The big businesses
benefited greatly from the minimum wage increases and continued
to see their valuations explode. They garnered more customers,
our customers, and replaced half of their minimum wage staff
with electronic kiosks and part-time help. It was a win-win
situation for big business.
To add insult to injury, in 2020 the CARES Act provided
additional unemployment incentives to our employees exceeding
their regular pay. We essentially lost our entire staff from
March until July because employees were making more money
staying at home claiming unemployment than coming into work.
Even though we received nominal assistance from the Paycheck
Protection Program, we called on our employees to return to
work, yet they did not. The Economic Injury Disaster Loan
assistance we received did not even cover 1 month's expenses.
It became impossible to retain my workforce, maintain
productivity, and turn a profit. I had no choice but to close.
The Federal Government provided more to help for people to stay
home rather than help businesses stay open.
Small businesses create about 80 percent of the jobs in
this country. They are the backbone of America. If small
businesses continue to close their doors, this country will be
harmed economically.
Thank you for the opportunity to share our experience, and
I look forward to any questions.
Chairman Brown. Mr. Cracchiolo, thank you for your
testimony.
Let me start the questioning with Mr. Costa. I want to
first express my condolences to the hundreds of transit workers
across this country. I know 155 of your members have passed
away from COVID, and I know hundreds of other transit workers
in other unions, TWU and others, so we send our condolences for
all of the sacrifice they make.
Talk, if you would, about transit systems and the dire need
they face. In my State, the Governor's budget cuts transit
dollars from $70 million down to $7 million. These cuts clearly
would have an impact not just on the drivers but on the public
that needs transit to get to work.
Explain why further resources are so essential to the
transit systems, writ large, around the country, if you would,
Mr. Costa.
Mr. Costa. Yes, Mr. Chairman. Look, with the restaurants
closed down, the bars closed down, the revenue is not there.
The tax revenue is hurting the States and the cities, and the
last bailout gave us the opportunity to keep the jobs, keep the
buses on the road. And if we do not have another bailout, it is
just going to go back to the way it was.
Right now, many of our authorities are waiting for this
funding. They need this funding. They are holding back on their
budgets to see what is coming out. If they do not get--and the
reason I am saying ``waiting,'' just because if they do not get
what they are waiting on, it is layoffs, cuts in service, which
will just hurt the economy, hurt the people that have to rely
on transit, like we spoke before. So the need is there for more
funding for transit, and it is needed badly and quickly.
My own State of New Jersey, they do not know whether they
are going to lay off. Many other agencies are the same way.
Also, to keep the PPE and the buses safe, I mean, they need
that money for that equipment, you know, the infection, the
masks, the supplies are needed.
You know, it is funny. I listen to this, and when we are at
war, nobody is debating on funding. You know, trillions are
spent. But when it comes to war on our own turf here with this
virus, we have this debate.
Americans need this. My family, you know, they have small
businesses, too, and everybody has been hurting. And it is up
to Government to help us here and keep our members safe and
have no more of them dying. Also, vaccines are much needed,
especially to my members every day out there moving the front
lines.
Chairman Brown. Thank you, Mr. Costa.
Mayor Brown, how has the pandemic revealed disparities in
minority-owned businesses in Youngstown?
Mr. Brown. It has been a great revealer. It has really
exposed the underlying health issues that we talk about. But it
really put a focus on those with underlying health issues in
the minority community. They are dying at a greater rapid pace
because of these underlying health issues. But it also is the
issue of having access to health care, appropriate and better
health care in their community, or the lack of good health care
in the community has been the issue for us. So the health issue
has been a major, major issue to deal with in our community.
Chairman Brown. Thank you.
Mr. Tsushima, in the last minute and a half--and I am sorry
to squeeze your time--I am guessing that most members of this
Committee or at least most Members of the Senate do not know
intimately people--maybe a couple of people, but generally do
not know people who have been evicted. Describe what happens to
your clients' lives when--first, the threat of eviction and
then actually eviction, what happens to a family?
Mr. Tsushima. Yes, Senator. It makes it very difficult for
families to just be able to operate with any normal
expectation. Kids cannot do their schooling because they are
bouncing around between places that they end up moving out. You
cannot even cook a hot meal anymore if you get evicted. It
creates so much chaos for families when they are being
threatened to be kicked out or they are actually evicted. And
these sort of consequences just add years to actually recover
on. If a kid--you know, children, when they actually have to
leave school, it often puts them behind, and that has long-term
consequences in the future for their ability to become employed
or go to college. And there is a lot of statistical evidence
tying that to negative health outcomes, increased rates of
crime, and it is such a systemic impact just from [inaudible].
Chairman Brown. Go ahead. I am sorry. Finish your sentence.
Mr. Tsushima. I did.
Chairman Brown. I am sorry. OK. Thank you.
Senator Toomey.
Senator Toomey. Thank you, Mr. Chairman. And I cannot see
the clock, so maybe if we could make whatever adjustment. I
think we have tried to do that in the past, so that would be
helpful if it is possible.
Let me pose my first question to Dr. Holtz-Eakin. You know,
the fact is in 2020 in the aggregate income did not collapse.
Employee compensation was up 2 percent, wages and salaries up
2.2 percent. This is during the peak of the pandemic. The
savings rate reached an all-time record high, and transfer
payments were at an all-time record high.
So, Dr. Holtz-Eakin, let me just ask you this directly: Is
it your view that the Federal Government's policies more than
replaced the total lost income of American workers last year?
Mr. Holtz-Eakin. Thank you. I was muted by the host. Sorry.
Yes, we saw average income rise over 2020, and this is not an
income-related recession. It is the virus itself which has
inhibited economic activity.
Senator Toomey. Right. So if we do another round of
stimulus checks, first, do you agree with my assessment that a
majority of those checks end up going to people who never had
any lost income, no interruption of income? And, second, is it
your view that that is not constructive for the economy for the
Government to be just arbitrarily sending money to people who
have never had any lost income?
Mr. Holtz-Eakin. Well, there is no targeting on lost income
in this proposal, and the vast majority will go to people who
have never had a day of interruption and are actually
relatively affluent. So that does not make a lot of sense in
these circumstances. And there is a risk. I think for me the
big risk is that we will see that money flow into, first,
savings accounts and then, well, maybe I can get a little more
yield if I go into the stock market, and, you know, maybe I can
do a little bit on my RobinHood app with some puts and calls.
21st century recessions have been preceded by financial
volatility, and I worry about the implications of hundreds of
billions of dollars sloshing around financial markets for no
good reason.
Senator Toomey. Yeah, we are seeing some very strange
things in various assets prices.
Let me ask about on the housing side the eviction
moratorium and rental assistance. I would like to stress we
have already allocated $1 trillion in direct assistance to
individuals, and that is a big part of why in the aggregate
household income is so high.
Let me ask you this: If landlords come to the conclusion
that they will at least periodically be in a position where
they have no enforcement mechanism on collecting rent, what is
the likely effect on the supply of housing and the cost of
housing in response to that reality?
Mr. Holtz-Eakin. Being a landlord will be a bad business to
be in, and they will exit, and we will have less in the way of
housing supply, and it will be much more expensive. In urban
areas historically, that is going in the wrong direction where
affordable housing is at a premium.
Senator Toomey. So the short version is less supply and
higher cost for low-income housing?
Mr. Holtz-Eakin. Yes.
Senator Toomey. Let me ask a question of Mr. Cracchiolo. I
want to be clear about something. When the unemployment
benefits were increased to the point where most workers got
paid more not to work than they got to work, did that create a
difficulty for you in retaining your workforce?
Mr. Cracchiolo. Absolutely, and thank you for your
question. It was difficult because when employees are getting
paid more to stay home, why come back to work? And with the
policy our Governor put in place, you had to accept these
employees when they came back to work. You guaranteed their
positions. It is difficult when you have to try to prove if an
employee has contracted the virus or not. I was given no
evidence, and when I contacted the Department of Labor--or they
contacted me telling me which employees were collecting
assistance, even after they had told me, I had been in contact
with someone--well, they automatically get 2 weeks at home, and
then in those 2 weeks they apply for the assistance, and they
stayed home until July.
Senator Toomey. We are about to run out of time, so just
very quickly, I just want to be clear. The minimum wage that
you are subject to and if that were to be rolled out
nationally, is it your view that that does not affect equally
small and large businesses but, rather, puts the small
businesses at a competitive disadvantage?
Mr. Cracchiolo. Absolutely, Senator. Small businesses
cannot do the things that big businesses are able to do to
compensate for those wage increases. One of those things is big
businesses can put kiosks out, self-service stations, and
customers can pick up and pay and not even be in contact with
any employee at all at those big-box stores. Small businesses
cannot do that, especially good service businesses. I find that
that is going to be a very large gap in the future between
small businesses and big business, and big business is going to
benefit.
Senator Toomey. Thank you. I think I am out of time, so
thank you very much.
Chairman Brown. Thank you.
Senator Reed of Rhode Island.
Senator Reed. Thank you very much, Mr. Chairman, and I
thank the panelists.
Mr. Tsushima, thanks for your good work helping people, and
I think we have all concluded that one of the best forms of PPE
is safe, affordable housing. And we have looked in Rhode
Island, and we discovered that among the homeless population,
in dollars and cents, their annual Medicaid cost is about
$14,000 compared to the average cost of about $8,200. So if you
are on the street, you are costing everyone more money as well
as exposing yourself to the COVID virus.
So can you just tell me, because you are so close to it,
what are the real costs to families and communities if we do
not do more to help them? I know there is discussion about
income growth, et cetera, but that is not even across the
population. Low-income people are not seeing some of the same
benefits that higher-income people are in terms of income
growth. But from your perspective, what is the impact if we do
not act?
Mr. Tsushima. Thank you, Senator Reed, for that question.
The biggest consequences that we see is just instability with
families and instability with communities. If you have a
community that is suffering high rates of eviction and high
rates of displacement, you see a lot of displacement that
disrupts the community's ability to actually network and have
members contribute to growing the community, looking at the
problems that they have, and addressing them.
You know, if you are evicted, you do not even have the
chance to be a neighbor with somebody, and those are things
that are absolutely crucial with people organizing around the
challenges that they are dealing with as a community. And what
we see here in Columbus is a lot of the evictions are very
concentrated in specific Zip codes, and they tend to be Black
neighborhoods as well. And it affects so many different aspects
of our society that it is very difficult to even figure out
where to start.
One of the statistics that I saw recently was that Ohio
experienced an increase of about 16 percent in child
homelessness between 2015 and 2018. And those homeless children
end up experiencing a lot of problems that are by no means
their own fault, and it is something they are going to have to
live with for the rest of their lives. They are not getting the
good education they need. They are not getting the shelter they
need. They are not getting the health care they need. And these
are all things that create new barriers for them that they have
to figure out how to overcome on their own in order to even
have a fair chance at just being a resident of Columbus. These
are things that we really should not expect, especially kids,
that we should not be expecting people to have to figure out on
their own.
I think Columbus has been one of the fastest-growing
communities in the Nation. We certainly should have the
resources to be able to address these problems. But I think
oftentimes we have this mind-set that everyone is individually
responsible for figuring out how to lift themselves by their
own bootstraps, but a lot of these impoverished communities do
not even have any bootstraps laying around.
So that is one small example of different problems that
these families and communities are dealing with. I mean, I
could go into, you know, how this affects employment when
tenants do not even have stable housing to return to to rest
after they have worked, or once they get evicted, they end up
having to drive further away because they moved in with a
family member across town. There are just so many different
things that----
Senator Reed. Thank you. Just a quick word. I want to thank
John Costa and his colleagues. We are grateful for what you
have done, particularly up here in Local 618 and Local 1363,
and Nick DeCristofaro and Gil Mendonca are terrific leaders.
One issue we are pushing--I will just make the comment. I
will not ask the question. Senator Collins and I introduced the
Coronavirus Economic Relief for Transportation Services to help
the private bus industry and school buses, which are critical
parts of our economy--we helped the airlines. We hope we can
help these transportation networks, too, but I just want to
thank you and your colleagues for your great work. So thanks,
John.
Thank you, Mr. Chairman.
Chairman Brown. Thank you, Senator Reed.
I see the names on the screen, in seniority order, Senators
Crapo and Rounds and Tillis. Are they actually here? If they
would turn their cameras on. If not, Senator Daines of Montana
is next. Senator Daines, welcome.
Senator Daines. Thank you, Mr. Chairman. And I want to
thank you for hosting this very important hearing today.
These last 12 months have been really tough, certainly for
Montanans and for Americans across the country. Thankfully,
however, I do think we are finally turning the corner. We see
that through economic data. We see that through the COVID data.
This is in no small part due to the five--five--bipartisan
bills that Congress has passed this last year to help our
country recover. And we have passed these five bipartisan
relief bills, and it is just frustrating to see my colleagues
on this side of the aisle trying to push forward a partisan $2
trillion bill instead of continuing to work across the aisle on
a relief package, which we have done successfully over the
course of last year five times, and target a package that
really helps the folks that need it the most. And it has just
been less than 2 months ago we passed a nearly $1 trillion
relief bill of which only about 50 percent has been spent so
far. Fifty percent.
Right now, we should be focusing our efforts tracking where
that money is going, where more money might be needed, and also
where it is not needed. Any future relief must be targeted to
those that truly need it the most.
One part of the package that certainly is not needed is a
proposal for $350 billion for State and local aid. I hope we
have not become desensitized to the size of these numbers.
Think about the overall discretionary budget of the Federal
Government. The entire budget is $1.4 trillion. So this kind of
shows the magnitude of what we are talking about here.
And, in fact, in 2020, we enacted approximately $360
billion in aid to State and local governments. I supported
those packages that included that aid. However, when the State
and local aid was passed, there were a lot of unknowns. The
pandemic, of course, had just started. Now it has been about a
year, and we do know that in 21 States, as the Ranking Member
mentioned earlier, 21 States actually had revenue growth
compared to 2019. In fact, California specifically is looking
at a $25 billion surplus.
So what we do know now is that $350 billion more for State
and local aid is not needed to help combat the pandemic. It is
not needed to make up for lost revenue because of the virus.
Revenues are up. What this new pot of hundreds of billions of
dollars is actually doing is going to help States that, prior
to the pandemic, like New York and Illinois, had fundamental
fiscal problems, of course, prepandemic. And I do not believe
Montanans should be footing the bill--Montana taxpayers--to
help States get out of long-term financial problems.
The first question for Dr. Holtz-Eakin: Is there any way to
justify sending an additional $350 billion to State and local
governments?
Mr. Holtz-Eakin. I do not think so. I would commend you to
the work of Louise Sheiner at the Brookings Institution who has
done a very detailed State-by-State analysis of the property
taxes, income taxes, corporation income taxes, sales taxes, and
other fees and does not come close to that number and,
moreover, shows that the differences are very stark across
States. And so if there is need for some State assistance, it
should, like everything in this, be more targeted on places
that generally have had a problem.
Senator Daines. So I think something we all agree with is
that we have got to ensure there is enough money for vaccines
and vaccine distribution. You know, I worked for Procter &
Gamble prior to coming to Congress. I used to work on FDA-
regulated products, was part of helping to get that $10 billion
passed back in March to allow parallel paths of FDA clinical
trials with pushing the button on supply chain and
manufacturing, so it shaved about 6 to 12 months off the
timelines to get these vaccines available and, thankfully, we
are now starting to see broader distribution.
So we have made great progress prioritizing vaccines. We
have got a lot more work to do. But it is very concerning to me
with this $2 trillion package, only about 1 percent of this
package goes toward COVID-19 vaccines, and only about 5 percent
is truly focused on the public health needs during the
pandemic, and that is where--you know, if we are going to stop
the pandemic, it is going to be through the vaccines. We should
be doubling down on those efforts. Any additional relief
package must be targeted, focused on ending the pandemic, which
we will do with vaccines, not on extraneous policies that have
nothing to do with the pandemic.
Dr. Holtz-Eakin, don't you think we should be prioritizing
aid for vaccines and actually public health needs over these
extraneous policies that have nothing to do with the pandemic?
Mr. Holtz-Eakin. The public health mission is the top
economic policy. There is no question that should be a
priority. And the second priority should be relief, targeted
relief, to those who have suffered great financial distress
[inaudible].
Senator Daines. One question for Mr. Cracchiolo. In your
testimony, you state that small businesses create about 80
percent of the jobs in this country, and that is why I was
grateful when we did the tax reform back in 2017, we focused on
pass-throughs, these smaller businesses. They are the backbone
of America. You stated if small businesses continue to close
their doors, we will be harmed economically, and these have
permanent long-term consequences. I think pretty much everyone
on this Committee would agree with that statement.
You discuss in your testimony how paying employees more in
unemployment than they make in their jobs is harmful for small
businesses. If everyone who wants a vaccine can get a vaccine
by this summer or even this year, but we are providing an extra
$400 a week of Federal unemployment insurance through
September, which oftentimes add up to more workers not being
able to get to work, how difficult do you think it will be to
hire workers in that situation?
Mr. Cracchiolo. Thank you for your question, Senator. I
find that once employees have access to the vaccine, I do not
believe it would be as difficult to hire or bring employees
back into the workforce. Just to bring it back a little bit to
what you mentioned, one of the things I agree with you most is
tracking where the money is going. If we are able to track, as
you said, where all this money is being spent and which
companies are getting it, employees can benefit greatly because
they will have access to that.
Senator Daines. Thank you. I am out of time here. I
appreciate it.
Mr. Chairman, thank you.
Chairman Brown. Thank you, Senator Daines.
Senator Warren I believe is here, if she can turn her
camera on. If not, I believe Senator Ossoff is here? Senator
Ossoff from Georgia, your first hearing. Welcome.
Senator Ossoff. Thank you, Mr. Chairman. Thank you. I
appreciate it. Thank you to our witnesses for your testimony
today.
I have to confess to being surprised to hearing some of the
protests about this direct relief for the people. I think there
is a reason that 80 percent of the American public supports
this COVID relief legislation. And to address some statements
made by a colleague earlier, working families in this country
are not playing the stock market with this money. Working
families in Georgia and across the country have had to bear
extraordinary child care costs, have faced significant loss of
employment, medical bills, already were in a precarious
financial situation to begin with in many cases. And this is a
bipartisan relief effort in that it has the overwhelming
support of a vast majority of the American people, and I hope
that colleagues on both sides of the aisle can come together,
and instead of becoming bogged down in factional disputes,
swiftly and in a united way move this legislation, this COVID
relief legislation through the Senate.
I want to address a question to you, Mayor Brown, and ask
you, and then I would like as well for Mr. Tsushima to address
this as well: What are the forms of exploitation and abuse that
those constituents you serve in your case, Mayor, and Mr.
Tsushima, the legal aid clients that you serve are facing
during this crisis?
Mr. Brown. Senator, thank you so much for the question. I
think I will start in the housing area. I spoke earlier about
the city of Youngstown and facing a recovery of the economy. We
have what we would consider predatory lenders from foreign
investors that would invest in places like Youngstown, Ohio,
where they are taking property sight unseen, but they are
raising those dollars on the backs of the poor people that are
paying two to three times as much in rent monthly than an
average individual should have to do that.
We are finding also that they are entering into land
contracts, and the contracts are not even binding or there are
stipulations that if you miss a few payments, we have had to
have several of our local advocate groups actually take them to
court to fight for that.
So the predatory lending about the rent rate and then we
have the issue of where they are giving them a land contract,
and the one thing many of the people I represent here in the
city of Youngstown want, they want to be homeowners. And when
that contract is dangled in front of them and it is actually a
false pretense, it causes some predatory lending practices here
in the community I represent.
Senator Ossoff. Thank you, Mayor.
Mr. Tsushima.
Mr. Tsushima. Senator Ossoff, thank you for your question.
I would fully agree with Mayor Brown's response, especially in
the housing area. We see quite a bit of predatory housing in
Columbus, and this has been a practice even before the
pandemic. It is just something that has become a much more
intense practice. And a lot of that is just due to tenants and
homeowners are scrambling to find funds where they can.
For homeowners, a lot of homeowners who cannot pay their
mortgage, cannot pay their taxes, they are looking for quick
sources of income to pay things off. And sometimes they just do
not know what the consequences of not paying their mortgage or
taxes are. So what ends up happening is they get approached by
somebody who recognizes that they are desperate and they will
try to maybe buy the property for real cheap, you know, by
making these sort of threats that give the homeowner an
expectation that if they do not get the mortgage or the taxes
paid immediately, then there is going to be criminal
consequences or some other types of civil legal consequences
that is going to take advantage of their desperation.
Senator Ossoff. Thank you, Mr. Tsushima. And, Mr. Chairman,
I yield back.
Chairman Brown. The Senator from Tennessee for your first
hearing on the Banking and Housing Committee, welcome. You are
on mute.
Senator Hagerty. Thank you, Mr. Chairman. Thank you,
Ranking Member Toomey. I appreciate your holding this hearing
today to make certain that the funds that we allocate to put
this pandemic behind us are targeted to those who most need it.
I also want to applaud my colleague from Georgia for
calling on a bipartisan approach to do this. The Congress has
proven its ability to approach this pandemic on a bipartisan
basis on a number of occasions before, and I think we have done
a very good job. I would like to share one example, if I might.
In December of 2020, the Senate passed an additional $900
billion in COVID relief on a vote of 92-6. One of the things
that this package did was to set up the Emergency Capital
Investment Program, and under this program Treasury will
provide up to $9 billion in leverageable Tier 1 capital
directly to community development financial institutions and to
minority depository institutions so that they can provide
loans, grants, and forbearance for small businesses, for
minority-owned businesses, and for consumers. This program was
specifically targeted to those that may be disproportionately
affected by the pandemic, especially those low-income and
underserved communities.
However, as of this hearing, Treasury has not even had a
chance to put this capital to work. This could make a
significant difference. I raise this example because I believe
we have got to continue to work to ensure that the trillions of
dollars that Congress has approved on a bipartisan basis are
being spent appropriately, expeditiously, and with the intended
effect to help the American people. And we must ensure that any
additional taxpayer funds are not duplicative of existing
unused funds and that they are targeted to programs that are
necessary to end the pandemic and to get our economy going
again.
With that, I would like to direct my first question to Dr.
Holtz-Eakin. Dr. Holtz-Eakin, thank you for your time for being
here. What I would like to do is talk with you about the
longer-term risks to our economy, including our financial
stability, that come with untargeted, oversized stimulus of
this nature. I would appreciate your comments on that.
Mr. Holtz-Eakin. It is a concern to me. You know, the
[inaudible] testimony suggests that even very small
multipliers, one-half, the economy reaches potential in the
fourth quarter of this year, and after that it is above
potential. And I am not deeply concerned about goods price
inflation at the moment. We have had very low inflation for a
decade. Even this would not turn that around overnight. But I
am worried about asset price inflation, that we have seen the
saving rate jump dramatically in the aftermath of packages of
this size, the CARES Act in particular. Where those funds go in
financial markets I think becomes a concern if we repeat the
exercise that close to full employment. So I think the biggest
risk of doing too much is, in fact, a risk to financial
stability.
Senator Hagerty. Thank you.
I would like to direct my next question to Mr. Costa.
Again, Mr. Costa, my condolences to your members who have
suffered and lost their lives in this. I appreciate their
frontline service. I wanted to ask you specifically about a
letter that you drafted, February 1st, that came from your
organization and others to Leaders Schumer and McConnell, to
Speaker Pelosi and to Leader McCarthy. You noted that public
transit agencies face a projected funding shortfall of $39.3
billion through 2023. How much of that shortfall in dollar
terms is attributable to the pandemic versus pre existing
shortfalls?
Mr. Costa. Good question, Senator. Most of it is the
pandemic. Ridership was down. If it was not for the bailout and
putting bus service back on to keep the social distancing, the
original ideas that the authorities were doing, they were
having massive layoffs. They were going to cut service. They
were going to cut many workers' jobs--thousands--and the first
bailout had them, first of all, stop the layoffs and, second,
keep the buses--keep the riders safe and our drivers safe
because the service was cut.
So to answer your question, the pandemic, yes, was the
biggest problem we had with revenue.
Senator Hagerty. Could you explain then how the $39 billion
that was already appropriated, actually $14 billion of that
just in December, how has that impacted the shortfall?
Mr. Costa. Well, that money was spent around. It was to
keep the jobs there, to keep the service running, and also PPE,
the equipment sanitized, new equipment parts brought in,
filterized system, shields were brought in, millions and
millions of masks were brought in, gloves, sanitizer. All that
was money that was needed to keep us safe.
Senator Hagerty. My time is up. Thank you.
Chairman Brown. Senator Warren.
Senator Warren. Thank you very much, Mr. Chairman. It feels
so good to be able to call you that.
I wanted to talk today about essential workers. Essential
workers are just that: essential. They are the people who are
on the front lines. They are still showing up for work even as
the death toll in the United States approaches half a million
people. These are the people who are keeping our economy, our
health care system, our education system going. Without them,
it would all grind to a halt.
But this morning, millions of those essential workers woke
up worried about contracting COVID-19 on the job. For nearly a
year, the Federal Government has treated these workers as
disposable. These essential workers are disproportionately
Black and brown. More than 5 million essential workers do not
have legal documentation, and many are hardly making enough
money to get by.
The failure, in fact, the outright refusal of the past
Administration to protect essential workers during this
pandemic has been truly shameful, and that is going to change.
So, Mr. Costa, you represent transit workers--school bus
drivers, subway workers, rail operators. The Biden
administration has now committed to issuing enforceable health
and safety standards for all workplaces.
Can you just say a word about why that is so important for
the workers that you represent?
Mr. Costa. Thank you, Senator. Thank you very much. Like I
said in my statement, we pushed and pushed to get Federal
guidelines, and in the last Administration did not get
anything. As a matter of fact, it was watered down.
The Biden administration came in quickly; they reacted. The
mask mandate for our drivers was huge. We appreciate that. The
question about funding, we now are going to need the funding on
how to bring that in without using our members as the mask
police, as I spoke about the assaults that happen, and bad
enough that we have members that are being killed over a $2
fare, you know, in the past--and I am sure you read about this,
and I know you know about this. But now I do not need many of
our members being beat up or killed over the debate or politics
that they have on the bus on the face mask.
So the Administration's reaction is greatly appreciated. We
appreciate that. But now our focus is how it is going to be
applied, how we are going to enforce it, and who is going to do
the enforcing. So, once again, the money will be needed, I
believe, for those agencies to be helpful to institute this to
save lives, not only for my members but the riding public. You
know, if a driver is infected, there are 100 people on a bus or
50 people on a bus, you know, they can be infected also.
Senator Warren. Right. Well, that is very important, and
thank you. You know, health and safety standards are powerfully
important. They are just one piece of the puzzle, though. I
proposed an essential worker bill of rights outlining a full
suite of rights and protections and benefits that I believe all
essential workers deserve, and that includes things like hazard
pay, paid leave, health care protection. Representative Ro
Khanna and I are expanding it now to include priority access to
vaccines.
But we also know that unions improve workplace health and
safety and that union workers are more likely to have paid sick
leave and employer-provided health insurance. Right now, only
about one in every eight essential workers is currently covered
by a union contract. So the essential workers bill of rights
also includes protecting collective bargaining agreements and
the right of workers to join unions.
Now, there is another piece to this as well. We need to
ensure that America's workers, including those who have battled
this deadly virus every day in their workplaces, are not
earning poverty wages.
Mr. Costa, there are some who say that now is not the right
time to increase the minimum wage. I would like to hear from
you. Would raising the minimum wage help promote an equitable
recovery from this crisis that workers are facing?
Mr. Costa. Once again, Senator, thank you, and thank you
for supporting everything you just said as far as heroes' pay
and--yes, it would. I mean, we have been fighting for a minimum
wage. I think every time we spread money around, the economy
gets better, right? So this is America, right? Why aren't we
taking care of our working families? To me, yes, a $15 minimum
wage would help the economy, would help the livelihoods of many
families, our minorities. We support it 100 percent, and we
supported it from the beginning. As a matter of fact, we would
support it even if you want to give more.
Senator Warren. Thank you. And thank you, Mr. Chairman. You
know, it is time to deliver for workers, and that means doing
everything we can, including using budget reconciliation to
raise the minimum wage to $15 an hour. I appreciate your being
here, Mr. Costa, and thanks for having this hearing, Mr.
Chairman.
Chairman Brown. Thank you, Senator Warren.
I see the names of Senators Crapo and Tillis and Rounds on
the screen. I do not know if any one of them is here or any
other Republican member, so I will go to Senator Van Hollen of
Maryland.
Senator Van Hollen. Thank you, Mr. Chairman and Ranking
Member Toomey, and let me just start by seconding and strongly
endorsing the comments just made by Senator Warren with respect
to the urgency of increasing the minimum wage. It would be
phased in to $15 an hour over a period of time, hitting that
level in 2025. So I hope we will work to get that done.
Mr. Costa, thank you for all that you and your workers are
doing around the country, in Maryland, in Baltimore, the
Washington area, and I look forward to working with you and the
Chairman and others to make sure that we address all the
important security and health concerns that you have raised.
Your drivers have been right there on the front lines fighting
the pandemic and, sadly, as you have testified, also having to
fight, you know, people who want to use violence to challenge
the social distancing rules.
I want to sort of broaden that lens a little bit because we
had earlier introduced a bill to deal with transit worker
safety, even apart from the challenges during the pandemic, you
know, the Transit Worker and Pedestrian Protection Act, and
thank you for your input on that. I wonder if you could just
talk about the need to move forward with that legislation.
Mr. Costa. Senator, long term we support Senator Van
Hollen's Transit Worker and Pedestrian Act to stop this endless
assault on our operators. So we want to thank you for that.
Unfortunately, it has been too long. It has not been
passed. Not one more operator should be assaulted. You know,
the industry needs to do something here with the design of a
bus--we all know it. This is America. We are spending tons of
money on equipment, and nobody has taken the fact that every
day that I wake up, an operator is assaulted around the country
and in Canada. This has to--this bill, I do not understand why
it is taking so long. It is a bill that keeps our operators
safe. It protects my operators. It protects the riding public.
And if we do not fix the buses and make--and if the riders do
not feel that it is safe, the industry is going to die; and if
we do not have the industry, you are not going to build back
the cities.
We need this bill to keep the agencies and put them in a
position that they can help protect us and help the riding
public to keep passengers coming and to bring them back.
Senator Van Hollen. Well, thank you, and please thank your
members. As you say, nobody should have to put their life at
risk to do their job in transit, helping other people get to
and from work, and that was true--that is true, of course,
during the pandemic, but it was true before, and that is why we
look forward to working with you to pass this legislation.
To Mayor Brown and Mr. Tsushima, I held a forum in Maryland
the other day, a Zoom forum on the issue of affordable housing,
especially focused on the housing emergency we are in right
now, and, clearly, the eviction moratoriums have helped protect
people. But there was an issue that was raised that appears to
be a loophole, which is that, you know, people obviously have
terms to their leases. Some people are month-to-month. And
while the eviction moratorium prohibits somebody from being
evicted because their nonpayment is related to hardships or
loss of jobs and income because of the coronavirus, that
protection is not there for people whose lease comes to an end,
even though that may be the reason that it is not being
extended as it normally would be as a matter of course. Can you
speak to that a little bit and whether you have any ideas of
how we can address that problem and whether it is something
that you have encountered?
Mr. Brown. Senator, I will just go and give you a sense of
what is happening here in the city of Youngstown. We see the
eviction issue--it goes hand in hand with the pandemic. I think
I heard someone mention earlier that they could not see the
connection. The connection for me is that individuals who are
being evicted, now they have got to live with family or a
friend and they are infected. Now they are taking that
infection to another home so it becomes a big spreader.
The other issue is that we are not going to be in this
pandemic all of our time. There is going to come a time when we
are going to get on the other side of this pandemic. We need to
make sure that we are prepared, that individuals need to have
housing counseling. Renters need to understand their rights.
But, also, there has got to be a better understanding of how do
we figure out, now that we have come through this pandemic,
because many of these workers do not--they are unemployed. We
have got to figure out how to retrain the workforce. We have
got to find and make sure that we have a good workforce
development program for the workforce that is going to be
there. And we have to make sure that this is a long-term and
sustained plan. So the eviction is just one issue that is
harming many, many of those in our community, and from the
landlord side of the world, they need to be paid as well. But
we have got to get through it together. There has got to be a
bridge of the gap, and I think this is why I am so much of an
advocate to make sure that we have assistance for those that
rent to make sure that they are not evicted.
Senator Van Hollen. Well, I appreciate that, and I am a
strong proponent of the $25 billion rental assistance provision
that was pushed very hard by Senator Brown and myself and
others in December, and I support the increase in that proposed
by President Biden. Just in ending here, on the issue of long-
term unemployment, I am really glad you raised that. I am
worried about it. We have 4 million long-term unemployed right
now. I know that--and I will follow up later. I know that Mr.
Holtz-Eakin has also been very concerned about that. And so I
see my time is up, but I look forward to circling back with all
of you for your thoughts. Senator Wyden and I and Senator
Baldwin have put forward some proposals on that. We look
forward to working with you. It is going to be a big issue. As
we defeat the virus, as the economy comes back, we are at risk
of leaving millions behind if we do not do something more. So I
will follow up. I see my time is up.
Chairman Brown. Thank you, Senator Van Hollen. As we close
the hearing, thank you to the witnesses. Senator Toomey has a
request, I believe.
Senator Toomey. Thank you, Mr. Chairman. Yes, I would just
like to make a unanimous request to insert into the record 17
letters that I received related to today's hearing. They come
from Pennsylvania business owners and advocacy groups that are
concerned about job losses resulting from a minimum wage
increase, parents and community groups supporting the reopening
of schools, and some think tank scholars who are worried about
excessive Government spending.
Chairman Brown. I thank the Ranking Member.
For those Senators on the Committee--I see Senator Hagerty
is still on, and I assume a number of others whose pictures are
not on the screen--who wish to submit questions, those
questions are due 1 week from today. Please get questions you
have for any or all of the five witnesses to the Committee
staff by next Thursday. And then witnesses, we ask witnesses--
you have 45 days to respond to any of those questions. And
thank you again. I thank the witnesses, thank Senator Toomey.
Thanks for sharing your stories and the experience of the
workers you serve. You hear a lot of statistics about this
pandemic. We too often become numb to the numbers. I thought
the stories you tell about drivers and about people who are
about to be evicted or small businesses really matter. Anyone
who listened to real people realized that the 2001 corporate
tax cuts were not a success story; neither were the 2017
corporate tax cuts. Ohioans know that. People around the
country know that. We have tried that ``corporations first''
approach over and over. We know it does not work for people in
Youngstown. It does not work for people driving or riding
buses. It does not work for people who get their income from a
paycheck, not a stock portfolio. We are done with that. And as
some of the talk we have heard today about raising the minimum
wage, I want to be clear to workers listening that when
politicians are saying they simply do not want you to get a
raise, they do not want you to have a wage you could live on
and raise a family. I want to see more money in workers'
pockets. I want to give more aid to small businesses that we
heard today are struggling. We are done aiming low. I look
forward to working with my colleagues to invest in the rest of
the country so we can actually have a recovery that lifts all
boats.
So thank you all for joining us. The hearing is adjourned.
[Whereupon, at 12:30 p.m., the hearing was adjourned.]
[Prepared statements, responses to written questions, and
additional material supplied for the record follow:]
PREPARED STATEMENT OF CHAIRMAN SHERROD BROWN
It should not be a surprise that our first hearing is about the
coronavirus--it has affected every American's health, home, family,
workplace, and the entire economy for nearly the last year.
On this and on all of the issues to come before this Committee, we
are going to get to work for all the Americans who have not had much of
a voice in Washington, or in our economy.
Ohioans and working families all over the country know what that's
like.
They have too much experience watching the largest multinational
corporations thrive, while our communities get left behind.
Long before the great recession, our trade and tax policy abandoned
the industrial heartland and working class towns and neighborhoods all
over the country, too often with bipartisan support.
Communities from the Mahoning Valley to the Mon Valley, from
Newark, Ohio, to Newark, New Jersey, all watched factory after factory
close, with no plan to rebuild our local economies. Entire
neighborhoods and entire towns hollowed out.
People felt like their hard work no longer paid off. And for Black
and brown workers, it had never truly paid off like it should. They
were the first to be preyed on by shady mortgage lenders, the first to
lose their jobs, and the first to get foreclosed on.
Now they feel like they're watching history repeat itself.
My colleagues on this Committee have heard me say many times that
this pandemic has been the ``Great Revealer.'' It's laid bare what so
many Americans already knew: that millions of workers have little
economic security, and they can't get a foothold in this economy, no
matter how hard they work.
So many families are one emergency away from draining what little
savings they have, or turning to a payday lender, or getting evicted.
If the bus quits running after 10 and she can't make it to her
night shift, she loses her job. If the restaurant where he works cuts
back his hours, he has to choose between paying the rent or paying the
electric bill.
Last year, I was talking to a grocery worker in Ohio who told me,
``they call me `essential,' but I feel expendable. They don't pay me
much, they don't protect me at work.''
And it is not a coincidence that many of the workers corporations
treat as expendable are Black and brown workers, and so often they are
women.
This pandemic hasn't just exposed racial disparities and income
inequality and gender disparities--it's made them worse.
Black and brown Americans are more likely to work in frontline jobs
that can't be done remotely, where they're more likely to be exposed to
the virus. They're less likely to have paid leave, making them more
likely to lose their job if they get sick or their child gets sick.
They have less savings to fall back on, because of generations of
wealth inequality. Black small businesses have closed at twice the rate
of white small businesses.
The system that has been making it harder for their work to pay
off, and putting their lives at risk for generations--long before this
virus appeared.
And as for the toll this pandemic has taken on women, ask any
mother how she's doing right now.
Millions of women have been doing three jobs for the last 11
months--they're full-time caregivers and teachers and doing the job
they had before this pandemic. And notice, only one of those three jobs
actually comes with a paycheck.
For 2.3 million women, they simply can't do all three--they've been
forced out of the workforce altogether. And that means 2.3 million
families are scraping by with less, trying to figure out how they'll
pay the mortgage or pay for health insurance or pay for groceries this
month.
It's always the same story--when the biggest banks and the largest
corporations need help, their allies in Washington spring into action.
But when the rest of the country needs investment and support, they
pretend we can't afford it.
Today, under new leadership on this Committee, we have a clear
message: Those days are over.
We will not settle for less.
Black and brown workers don't have to settle for a system that
treats their lives as expendable. Mothers don't have to settle for
doing three jobs, with no help. Small business owners don't have to
settle for scraps, while they watch corporate profits soar.
Ohio and the rest of the country do not have to settle for a Wall
Street-first recovery.
We are the world's richest country with the world's largest
economy. We have the resources to rise to meet this challenge, for
everyone.
That's what President Biden is doing, with his rescue plan. And
it's what we will do on this Committee, starting today.
Our witnesses today will make clear the importance of a recovery
that supports all Americans.
We will hear from the president of the Nation's largest transit
workers union, who is working to keep his members safe while they
ensure Americans can get to work or a doctor's appointment or the
grocery store.
We will hear from a legal aid attorney who is on the front line in
Columbus, working with renters to keep people in their homes during a
pandemic.
We will hear from a small business owner who is struggling to keep
his doors open and his workers on the job.
And we will hear from the mayor of an industrial town that has
suffered disinvestment for decades, has been stereotyped by national
pundits, and is now facing the same challenges as cities and towns and
neighborhoods in all of our States.
These are the voices that have been ignored, shouted down, or even
ridiculed by corporate elites, their newspaper of record, and too many
in Washington. That ends now.
We will get help to people--all people--to stay in their homes, and
pay their bills. We will keep the doors open at minority-owned
businesses that entrepreneurs have worked their whole lives to build.
We will keep our buses and our trains running, and keep those workers
on the job.
This is about recovery, and it's about rebuilding. It's about
empowering all Americans--no matter who you are, where you live, or
what kind of work you do--and investing in all communities.
We will show the American people--all people--that their Government
is on their side. It's time to get to work.
______
PREPARED STATEMENT OF JOHN A. COSTA
International President, Amalgamated Transit Union
February 18, 2021
Introduction
Mr. Chairman, the Amalgamated Transit Union (ATU) appreciates the
opportunity to provide our views on how workers have sacrificed and
suffered through the COVID-19 pandemic and the inequities that we have
witnessed in public transit. The coronavirus has shown the world the
true meaning of ``essential'' workers. We are the ones who people rely
upon to survive when everything around us shuts down. Since the
pandemic began, transit workers have put their own lives on the line,
bravely reporting to work every day, driving transit riders in our
communities to the doctor, the grocery store, and the pharmacy. We make
sure that nurses and other hospital workers get to their jobs to care
of our family members and friends who are suffering.
Grateful
On behalf of the entire public transit industry, both labor and
management, and of course the people who rely on the services our
members provide every day, I want to thank this Committee for leading
the way in providing the resources necessary over the past year for
transit to survive during the coronavirus pandemic. Without the $25
billion in the CARES Act and the additional $14 billion in the recently
passed Coronavirus Response and Relief Supplemental Appropriations Act
of 2021 (CRRSAA), the Nation would have come to a complete stop. Thanks
to you, we've been able to keep the buses and trains running, making
sure that grocery store workers keep the shelves stocked, child care
workers keep our kids safe, and nurses keep us alive. You've also saved
the jobs of hundreds of thousands of our members, the transit workers
who move America, and we are all sincerely grateful. More than any time
in the nearly 60-year history of the Federal Transit Program, Congress'
unwavering and bipartisan support for public transit has not only kept
critical transportation services running--you have saved lives.
Sacrifice
Of course, these days, the downside to staying on the job as a
frontline worker--especially a transit bus operator--is that you are
continuously exposed to the coronavirus, putting your life on the line
every day. It's no surprise that nationwide, thousands of transit
workers have tested positive for COVID-19. The buses we drive have
major issues with air flow, air sterilization, and filters. When a bus
is moving forward, it creates reversed airflow in the cabin, bringing
unhealthy air into the driver's workstation. The buses have dangerous
airflow with recycled and very poorly filtered air. Some jurisdictions
have tried temporary measures, such as hanging shower curtains near the
driver and separating us from the passengers, but transit worker deaths
are still piling up.
Shift after shift, our brave members have reported for work,
driving tin cans with bad air circulation down the road, and hundreds
of transit workers have paid the ultimate price. As of today, 132 ATU
members have died from the virus, and our sister union, the Transport
Workers Union (TWU) has lost even more transit workers. Nearly 300
families will never be the same because of this cruel and horrible
disease.
Failure
It didn't have to be this way. With the proper precautions, transit
service can be delivered safely. Unfortunately, the previous
Administration let us down from the beginning, and it cost us many,
many lives. Incredibly, right from the start, the Federal Transit
Administration (FTA) under Trump told us that masks were not
recommended. And even when it became crystal clear that masks were our
best and most cost-effective weapon against the virus on transit, the
Administration did not act. Nine years ago, our union supported changes
to the law giving FTA the power to enforce safety matters.
Unfortunately, in 2020, the agency simply refused to use that
authority. We pleaded with them to step up and get personal protective
equipment (PPE) to the transit systems. They ignored us. So in many
cases, it was actually our local unions that went out and helped the
agencies secure PPE. Think about that. The workers and their unions
were forced to go out on their own and search for and sometimes pay for
the life-saving equipment because our Federal Government turned a blind
eye. We also sent demands regarding social distancing, mask mandates,
contact tracing, and several other protective measures for transit
workers. But the previous Administration watered down the Centers for
Disease Control (CDC) guidance, seriously scaling back or completely
removing specific recommendations for transit systems:
No specific guidance on necessary PPE;
Lack of recommendations for testing transit workers and
performing contact tracing;
No guidance for strategic continuation of service to reduce
overcrowding;
Failure to offer specific guidance for effective sanitation
and filtration of HVAC systems on transit vehicles;
Scaled back recommendations for waiting to allow for air
exchange before cleaning possibly contaminated work areas;
Removed examples of physical barriers and partitions as
effective measures to enforce social distancing and correct air
flow recirculation issues; and
Watered down protocols for responding to cases of
potentially infected workers.
As a result, each day, more and more of our members died. While we
will never know exactly how many passengers contracted the virus on the
bus or the train due to the lack of Federal safety standards, or the
number of family members they later infected, it is safe to say that
many deaths could have been prevented with proper leadership.
Now, even after inauguration day, we are still paying the price. We
found out on Day Two of the Biden Administration that the new President
was reportedly left with no plan to administer the vaccine. It would
not have mattered anyway, as we already heard that the reserves that
the previous Administration were supposedly stockpiling were actually
exhausted. Now, even in States that are following Federal vaccine
recommendations, giving vaccine priority, in the second tier, to
transit workers and other frontline workers, the fact is that supply
does not even come close to meeting demand. In my home State, our
employer, New Jersey Transit, did the right thing and purchased
refrigerators to store the vaccines so our members can get the shot
right on site. But those refrigerators have been empty for more than a
month. Since there was no plan and no reserves, we wait for the shot,
putting our lives on the line every day.
The Mask Police
In addition to driving a bus, ATU members also now serve as the
``mask police.'' Far too often during these politically charged times,
we have been brutally attacked for simply enforcing the rules and
trying to stop the spread of the virus.
A baseball bat beating in California, a two-by-four attack on a bus
in Texas, and a bone-breaking sucker punch in New York are just a few
violent incidents that underscore another danger for transit workers in
a coronavirus world--and they all happened in one month. Since the
pandemic began, there have been hundreds of COVID-related violent
encounters between bus drivers and angry passengers who refuse to wear
masks or follow social distancing protocols.
At the beginning of the pandemic, transit systems were boarding
from the back and waving fares. But regular fare collection and front
door boarding resumed again in the summer, bringing passengers and
drivers within a few feet of one another, exposing us to the virus and
angry people.
When someone boards one of our buses without a mask, we are faced
with a tough choice: say nothing and risk that an infected rider will
spread the virus, or tell the passenger to put on a mask and risk a
violent reaction. When you confront someone, it can escalate quickly.
They could spit on you, throw something at you, or hurt another
passenger. But what if that person is sick and contaminates everyone on
this bus? And you could have prevented that?
Last May, a St. Louis man boarded a bus without a mask. After the
female driver informed him that he could only ride the bus with a face
covering on, the man fired a 9mm pistol at the driver. She was saved
only by the polycarbonate shields that were installed as part of the
COVID response. In Austin, TX, a man threatened a bus driver with
broken scissors after being told to wear a mask. In Springfield, MA, a
PVTA bus driver was assaulted after asking a passenger to wear a face
covering. The suspect punched the woman driver in the back of the head
and then assaulted another person who tried to help. Knoxville, TN
police arrested a man who threatened a bus driver with a box cutter
after she asked him to put on a face mask before boarding. In Staten
Island, NY, a man was arrested on assault charges for throwing hot
coffee onto an MTA bus driver's face when he was asked to put on a face
covering.
In Boston, a teenager recently attacked an MBTA bus driver after he
was asked to put a mask on or get off the bus. He then began coughing
on the driver, claiming he had COVID and attacked the driver with a
block that's put under the bus wheels when it is parked. In Florida, a
homeless woman recently boarded a Miami bus and began coughing on
passengers. The driver told her she needed to wear a mask. The woman
then spat on the driver. Coughing on someone is not a laughing matter.
When the pandemic first began back in March, ATU Member Jason Hargrove,
from Detroit, posted a Facebook Live video complaining about one of his
passengers who was openly coughing several times on his bus without
covering her mouth. Eleven days later, Jason died of COVID-19. Jason
loved his job and was proud to do it. He was always concerned about his
passengers. He suffered too, as his temperature soared, his fingertips
turned blue, and he couldn't breathe.
Once a passenger gets on the bus with a mask, it's just the
beginning. While driving down the road, our members are constantly
checking the mirror, making sure that riders are keeping their masks
on. They often pull the face coverings off, and that's when the real
tension begins. We are bus drivers, not police officers. We do not need
political debates on board our vehicles, but that's the way things are
right now. When people don't listen, we need to call in the issue to
the company so they can send help.
We are thankful for President Biden's action to require masks on
public transportation. TSA's Security Directive (SD) 1582/84-21-01
regarding face mask requirements, which supports enforcement of the CDC
order, is long overdue. The SD requires transit systems to establish
procedures to manage situations with persons who refuse to comply with
the requirement to wear a mask. At a minimum, these procedures must
ensure that if an individual refuses to comply, the agency must deny
boarding, make best efforts to disembark the individual as soon as
practicable or make best efforts to remove the individual. Of course,
unlike the airlines, the issue is that we do not have armed TSA agents
screening passengers before they get on the bus or the train.
Therefore, the burden of enforcing this rule still falls upon our
members, at least initially. We clearly need increased local law
enforcement on our buses to carry this out.
Driving a Bus in a COVID World
We are frontline workers. That does not change, virus or no virus.
Our job is to make sure that people can get where they need to go--the
doctor, the pharmacy, the grocery store--safely. All of this has become
quite challenging during the pandemic.
Social distancing on a bus is extremely hard to do. Passengers in
many locations are allowed in the front row, which is too close for
comfort for many of us, and we are once again collecting fares. In some
cities, passengers are provided with masks if they do not have one, but
our members often drive in the inner cities where homeless people are
currently boarding the buses for free, and boxes of masks on the
vehicle usually disappear quickly.
We come in early to complete the COVID preshift tasks, grabbing the
spray bottle and wiping down the vehicles, especially the driver
shields that have been installed in many locations since the pandemic
started. Most shields are better than nothing, but still leave a gap
exposing us to attacks.
As always, we must still touch wheelchairs to help disabled riders
get on board, secure their wheelchairs, and help them exit. Anywhere we
touch, the surface gets wiped down.
Transit Still in High Demand
Continued transit service is vital to lower-income essential
workers who are keeping our hospitals, supermarkets, and pharmacies
going. A recent study by Ohio State University \1\ found that the
COVID-19 pandemic had surprising effects on demand for transit in
American cities. While demand for public transit dropped about 73
percent across the country after the pandemic hit, the reduction didn't
impact all cities equally. Large cities saw demand fall further than
cities in the Midwest and the South. Why? It has to do with the nature
of jobs in different cities and who was actually using public
transportation before the pandemic. In cities in the Midwest and the
Deep South, most transit users have jobs where they still have to come
in to work during the pandemic and don't have any other choice.
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\1\ The Impacts of COVID-19 Pandemic on Public Transit Demand in
the United States. November 18, 2020, https://journals.plos.org/
plosone/article?id=10.1371/journal.pone.0242476.
---------------------------------------------------------------------------
Essential workers are the core users of public transit in these
cities. They include health care workers, people working service jobs,
working in grocery stores, and people who clean and maintain buildings.
The biggest factor was race. The larger the Black population in a city,
the less decline in demand for transit.
Occupation also plays a large role. People who cannot work at home
and rely on transit continue to use it. Many of the people with
physical jobs who continue to use transit are Hispanic.
Vaccine Inequities and the Impact of Transit
The inequities don't end there. We know that America has seen large
racial disparities in coronavirus cases, with Blacks, for example,
accounting for a huge percentage of virus cases despite being only
about 13 percent of the U.S. population. And when it comes to the
vaccine, the numbers are also skewed. A racial gap has opened up in the
Nation's COVID-19 vaccination drive, with Black Americans in many
places lagging behind whites in receiving shots, and it's not just
because many are suspicious of the Government. Access is a key factor,
and transit plays a huge role.
People in underserved communities often don't have vehicles and
must rely on public transportation. Drive-up vaccination sites are of
no use to these people. And we know that during the pandemic, many
transit agencies have reduced their service or limited the number of
passengers to provide for social distancing. The vaccine distribution
has a huge transportation component.
Our members at Local 1309 in San Diego are now giving free rides to
passengers to and from COVID-19 vaccine sites. We are pleased to play a
key role in this partnership between the Metropolitan Transit System
and North County Transit District. In South Florida (Locals 1267 and
1577), officials are calling for educational outreach in the Black
community via avenues besides the typically used churches and
supermarkets, which could include hair salons, laundromats, or public
transit stations.
It's also not just a matter race: age plays a role as well. In Los
Angeles, where our members at Local 1277 maintain the buses, we've
heard about seniors having to take three buses to get to vaccine
appointments. Transportation limitations should not slow down the
vaccine rollout. Thankfully, the county is working out an agreement
with regional transit operators to provide direct access to the vaccine
sites.
More Transit Investment Needed
Even if the vaccine rollout improves drastically in the first half
of this year and our economy comes back to life, transit will still be
in need of emergency operating aid for the foreseeable future.
Dedicated sales taxes from bars and restaurants have dried up, leaving
transit agencies with no local source of operating assistance. Choice
riders are understandably hesitant to get back on transit vehicles due
to safety concerns. It will likely take years for ridership levels and
fare box revenue to recover, and we will need significant levels of
Federal operating aid to survive.
As highlighted by the American Public Transportation Association
(APTA), an independent economic analysis found that public transit
agencies face a projected funding shortfall of nearly $40 billion
through 2023. We therefore urge Congress to provide an additional $39.3
billion in emergency funding to help public transit agencies provide
safe, reliable service as they continue to grapple with the financial
burden caused by the COVID-19 pandemic. We are grateful for the $30
billion included in the budget reconciliation bill.
All transit systems have been hit hard by this pandemic, and ATU
calls on Congress to ensure that the next bill provides funding for all
FTA grantees. The December bill, with its formula providing up to 75
percent of 2018 operating costs between the CRRSAA and the CARES Act,
did not result in distributing funding to every system.
This additional funding is needed to maintain critical service.
Moreover, robust transit service is essential to our long-term economic
recovery, particularly for low-income workers and communities of color.
As discussed above, Congress threw a lifeline to transit agencies and
our communities with the recent passage of the CRRSAA. In the weeks
leading up to that bill, we were facing massive layoffs and staggering
service cuts--as much as 40 percent in some areas. TransitCenter and
the Center for Neighborhood Technology released a revealing study \2\
which showed that in just ten regions, more than 3 million households
and 1.4 million jobs would have lost access to frequent transit, with
communities of color really feeling the impact. Second and third-shift
workers would lose an affordable way to commute, and households without
vehicles would have an even harder time meeting everyday needs.
---------------------------------------------------------------------------
\2\ ``Stranded''. TransitCenter, September 30, 2020, https://
transitcenter.org/wp-content/uploads/2020/09/stranded.pdf.
---------------------------------------------------------------------------
For example, in Boston, where ATU Local 589 runs the ``T,'' nearly
11,000 households without access to a private vehicle would lose access
to frequent transit, impacting their ability to meet essential needs.
In Cincinnati, where ATU Local 627 runs SORTA, frequent full-day
service would cease to exist, stranding nearly 17,000 people, nearly
half of whom are Black. The report highlights Patrick Jones, who rides
two buses to get from his home in Cincinnati to reach his job as a
forklift operator at the Coca-Cola distribution center across the river
in Covington, KY. His typical commute, which takes about 1\1/2\ hours,
has already increased by 10-20 minutes, as service changes have
lengthened transfer times between buses in downtown Cincinnati.
Clintisha Flemming, the report notes, a property owner in metro Atlanta
(ATU Local 732), saw what happened when bus routes were changed due to
COVID. ``Ninety-five percent of my tenants use MARTA,'' she said. ``The
agency cut a bus route that served my building and now my tenants are
scrambling to figure out how to get to work and access their doctor.
Loss of public transit can change the trajectory of a person's life.
This is life and death for some of my tenants.''
Heroes
While many people have the luxury of working from home to avoid the
coronavirus, some of us are not that fortunate. Over the past year, our
``essential'' workers have literally saved America--keeping the economy
moving so that we can remain safe. Tragically, by putting themselves in
harm's way, millions of these brave people have been infected with
COVID-19, and hundreds of thousands have paid the ultimate price.
Now, it's time to recognize the sacrifices that frontline workers
have made during this deadly pandemic with a small token of
appreciation. ATU strongly supports hazard pay for frontline workers
(including transit workers).
Our members are true heroes for millions of the Nation's transit-
dependent individuals--mostly people of color--who patiently wait for
the bus during these cold winter months because they have no other way
to get to work, the grocery store, the doctor, and the pharmacy.
While transit workers are rightfully being called ``heroes'' during
these horrific times, our members are finding that when they return to
the bargaining table, they are being cast away as ``zeros.'' Congress
should provide pandemic premium pay for frontline workers now!
Conclusion
We cannot change what has happened in the past eleven months. Our
hero members and the passengers that we've lost due to the failures of
the Federal Government to keep us safe are not coming back. But moving
forward, brighter days are ahead. President Biden's commonsense public
transit mask mandate was a huge step in the right direction that will
save lives. The vaccine should be more widely available soon, and
hopefully transit workers will get priority access. With continued
Congressional support for public transit, a stronger Federal role in
the enforcement of common sense safety measures, and a seat at the
table for workers to express their COVID concerns, we can work our way
through these challenges, safely deliver the transit services that
Americans sorely need, and play an important role in our economic
recovery.
______
PREPARED STATEMENT OF JAMAEL TITO BROWN
Mayor, Youngstown, Ohio
February 18, 2021
Thank you Chairman Brown and Ranking Member Toomey for inviting me
to testify before the Senate Committee on Banking, Housing and Urban
Affairs. I am Jamael Tito Brown the Mayor of the City of Youngstown,
Ohio. We are a small city in the Midwest of a population of nearly
67,000.
This year marks 44 years since the closure of steel mills in the
City of Youngstown. As a legacy city, we have faced a history of
corporate corruption and political corruption causing governmental
mistrust amongst our community. My Administration has had to overcome
many obstacles. Inadequate educational resources and a lack of livable
wage jobs have always been historical problems for our community. A
further hindrance in our efforts for recovery is the decline of our
housing stock and transportation for those who need access to
employment.
The current global pandemic has hit our community harder than most.
COVID-19 has been a great revealer of the health, social, economic and
racial disparities of our community. Small to medium sized businesses
are also feeling the impact of the pandemic, especially minority-owned
businesses, many of whom did not have an established relationship with
a banking institution prior to the pandemic.
The needs of the City of Youngstown are no different from other
communities across the Nation. When a city is barely rebounding from 50
years of economic decline because of outside forces beyond our control,
those rebounds have been further eviscerated by COVID-19. Whatever
Federal assistance is provided must be a long-term coordinated strategy
to get the resources we need to address the public health impact of
COVID-19 and assure that housing, transportation, and small business
efforts are included in a Federal rescue plan. If any component is
ignored the entire community structure will likely fail.
Ohio cities in particular have been hard hit by the economic
downturn brought on by the pandemic. This is because cities in Ohio
rely on a municipal income tax as our primary source of revenue. This
tax source is much more susceptible to economic conditions as opposed
to more stable sales or property tax revenue streams.
Youngstown has seen this impact first-hand. We are the county seat
and our county, Mahoning County, has one the highest unemployment rates
in the State--ranking 75th out of Ohio's 88 counties. When unemployment
is up, tax revenue is down and these economic challenges have ripple
effects all across our regional economy--from housing, to public
transit, and the economic activity that sustains our small businesses.
In order to truly recover from the pandemic, relief has to help our
neighbors and our community to not only survive but also thrive so our
city does not flounder for another 50 years.
A Federal rescue plan must include assistance to help build back
better legacy cities like Youngstown, Ohio. It should include, as
outlined by President Biden: assistance for the production and
distribution of COVID-19 vaccines; rental assistance for families;
transit assistance to keep buses running so essential workers can
continue to get to work; and small business support so hardworking
business owners can keep their workforce.
The relief effort should be flexible and free of bureaucratic red
tape so that the pace of recovery is not stymied by Federal mandates.
Transparency of local government spending should be a guiding mandate
to reinforce accountability and build trust with our communities.
Small cities need assistance. Small cities need assistance quickly.
Small cities need assistance desperately.
The impacts of COVID-19 are still affecting many of my citizens.
Families are still hurting. We need immediate relief during these
difficult times. I urge you to think of this as part of a long-term
sustainable recovery plan to build back and create thriving
communities.
______
PREPARED STATEMENT OF JYOSHU TSUSHIMA
Staff Attorney, Legal Aid Society of Columbus
February 18, 2021
Thank you for inviting me to testify. My name is Jyoshu Tsushima,
and I am a staff attorney at the Legal Aid Society of Columbus Ohio, a
nonprofit that provides free legal assistance to low-income clients.
Through our eviction prevention clinic, the Tenant Advocacy Project
(TAP), my team and I represent tenants in eviction trials at Franklin
County Municipal Court.
While the pandemic has wreaked havoc on our community, it has hit
low-income communities the hardest. We are constantly reminded to stay
home and social distance, but such safety measures are not available to
families who are evicted.
Every morning, Monday through Friday, my team and I watch tenants
and landlords check in for eviction court. About 90 to 100 trials are
scheduled per day, all for 9 a.m., before one magistrate. Our court
uses a ``cattle call'' system, where tenants, their families,
landlords, and attorneys wait in an atrium for cases to be called one
at a time. We try to help as many families as we can before cases get
called. We quickly assess cases for legal defenses and scramble to seek
solutions that will keep them housed. Other agencies are also at
eviction court trying to connect tenants and landlords with rental
assistance. Every morning is chaotic and so many tenants fall through
the cracks, leaving court knowing they have to move their families
elsewhere, in the dead of winter, in the middle of a pandemic.
The vast majority of tenants are facing eviction for falling behind
on rent. Even before the pandemic hit, over 54,000 low- and moderate-
income households in Central Ohio spent more than half of their income
towards housing. \1\ Many were survived by living paycheck to paycheck.
When these renters lost their jobs, or their hours were cut due to the
pandemic, they were forced to rely on erratic spurts of stimulus
checks, unemployment, and rental assistance, with little certainty
about how much would come or when it would arrive. At one point
Columbus was so short on rental assistance that our distributor, IMPACT
Community Action, only dispersed funds to tenants that were being
evicted while others were told to reapply when funds were replenished.
When funds were depleted after that, IMPACT ceased new applications
altogether. And even when assistance arrives, it is mostly used to pay
off debts that were already owed, leaving nothing to for next month's
rent. So many of our clients live this cycle month-to-month. They are
not hanging by a thread; they are constantly waiting for one to be
thrown down to save them.
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\1\ Affordable Housing Alliance Central Ohio, The Columbus and
Franklin County Affordable Housing Challenge: Needs, Resources, and
Funding Models, February 2017, https://static1.squarespace.com/static/
AHACO+Research+Report+FINAL+February+2017.pdf.
---------------------------------------------------------------------------
Because of this uncertainty and frequent shortages in financial
assistance, tenants are terrified of falling behind on rent and losing
their homes, and current law does not ease those fears. Landlords can
legally refuse rent once it is late and choose to evict instead.
Landlords are not required to work out payment plans to give tenants a
chance to catch up. We have had tenants who cannot even attend court
because they are hospitalized by COVID-19, and when we ask some
landlords' attorneys to reschedule a case until the tenant is well
enough to return, they decline and reply that, although unfortunate,
they will still evict these tenants because that is the right of the
property owner. When a landlord owns your home, being infected with
COVID-19 does not stop an eviction. Neither does job loss, family
death, mental illness, crippling accidents, nor any other misfortune.
Eviction moratoriums are effective in keeping people housed and
preventing the spread of COVID-19. \2\ However, enforcement of
moratoriums under the CARES Act and CDC has been excruciatingly
difficult. Under the CARES Act moratorium it was nearly impossible for
attorneys to determine if rental properties met the requirement of
having a federally backed mortgage since such information was not
publicly available. Unrepresented tenants did not even know what the
moratorium requirements were. Ultimately, enforcement was left to the
self-regulation of landlords.
---------------------------------------------------------------------------
\2\ Leifhert et al., Expiring Eviction Moratoriums and COVID-19
Incidence and Mortality, https://papers.ssrn.com/sol3/
papers.cfm?abstract-id=3739576.
---------------------------------------------------------------------------
When the CDC announced its moratorium we were hopeful that it would
be easier to enforce; however, too many tenants are slipping through
the cracks due to several loopholes. Current CDC guidance allows
landlords to challenge tenants' eligibility for the moratorium in
court. Since there is no consequence to making such a challenge, many
landlords and their attorneys advise tenants that they are not
protected and will challenge the moratorium by filing an eviction,
which is often enough to pressure tenants to move.
In Columbus if a tenant seeks protection under the moratorium
through our court, the tenant then has to attend a ``truthfulness''
hearing, where the landlord or their attorney quizzes the tenant on
whether they are really poor enough to qualify. One of our clients lost
his job due to the pandemic and was supporting himself and his two kids
on $100 weekly unemployment checks. His landlord filed an eviction
against him for failing to pay rent. At trial the landlords' attorney
grilled him on why he couldn't spend any of his unemployment towards
rent. Our client responded that it all went to food and utilities. The
attorney argued to the court that since our client spent nothing on
rent the CDC moratorium should not apply. The court declined this
argument and stayed the eviction; however, the landlord filed a new
eviction against our client, claiming he was a holdover tenant. Tenants
are already scared and humiliated to be at court. To have to be cross-
examined in open court on how they are trying to keep their children
alive on $100 per week demeans them even further, and they cannot even
be guaranteed that the moratorium will keep them safe. Over 4,000
evictions were filed in our court between September and December 2020.
Less than 20 of these evictions were stayed under the moratorium.
Evictions and COVID-19 are also hitting our Black communities the
hardest. While 60 percent of our clients at eviction court are Black,
Black residents make up only 24 percent of Columbus' population. CDC's
data shows that if you are Black then you are twice as likely to die
from COVID-19 than if you are white. \3\ In other words, a
disproportionate number of Black tenants are being evicted, leading
them to greater exposure of COVID-19 when they move into shelters or
another family's home. None of my clients chose their race or choose to
be born poor. None of them chose to suffer as they do. The rest of us,
however, have a choice in either taking action or being bystanders to
the consequences of this pandemic.
---------------------------------------------------------------------------
\3\ Center for Disease Control and Prevention, COVID-19
Hospitalization and Death by Race/Ethnicity, https://www.cdc.gov/
coronavirus/2019-ncov/covid-data/investigations-discovery/
hospitalization-death-by-race-ethnicity.html.
---------------------------------------------------------------------------
We need more aggressive intervention. That means adequate rental
assistance that tenants and landlords can rely on, and effective
eviction moratoriums to keep families housed. An estimated 272,000 to
552,000 of Ohio families are at risk of an eviction without such
intervention, while 7 to 14 million households nationwide face the same
peril. \4\ These numbers do not even account for the millions of
homeowners facing similar threats through foreclosures. When a family
is displaced, those parents, those children, suffer innumerable ways.
And the community as a whole suffers as well. We must do more to ensure
everyone has a home, not just because it is right, but because it is
necessary.
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\4\ STOUT Data: Estimation of Households Experiencing Rental
Shortfall and Potentially Facing Eviction (8/19/20-11/23/20), https://
app.powerbi.com/view?r.
---------------------------------------------------------------------------
______
PREPARED STATEMENT OF DOUGLAS HOLTZ-EAKIN
President, American Action Forum
February 18, 2021
Chairman Brown, Ranking Member Toomey, and Members of the
Committee, thank you for the privilege of appearing today to share my
views on the American Rescue Plan (``the plan'') and the sister
legislation being prepared by Congress. I wish to make three main
points:
The architecture of the plan is largely divorced from the
roots of the recession and headwinds to the recovery, and--at
best--it will be costly, inefficient, and ineffective;
The scale and composition of the plan is at odds with the
stated goals for economic stimulus toward full employment; and
A large number of the elements of the plan can only be
understood as long-standing and permanent political objectives
that are inappropriately advertised as a response to COVID-19.
The Roots of the Recession
In the 20th century, recessions were income-related events. In the
prototypical recession, when inventories built up, production was
throttled back, layoffs ensued, and household incomes fell. The
resulting retrenchment in household spending exacerbated the original
problem, and the downturn took hold. Eventually, the shelves became too
bare, production ramped up, laid-off workers were recalled, and the
dynamics took hold in reverse. Many of the familiar fiscal policies--
unemployment insurance, tax cuts, etc.--were designed to provide
transfer income to lessen the depth of the recession and shorten its
duration.
In the 21st century, recessions have been triggered by financial
instability and wealth destruction that spilled over to the Main Street
economy. The dot-com bubble burst lead to a mild recession early in the
century and the 2007-2008 financial crisis spawned the Great Recession.
The same tools were deployed, but with little success. Despite fiscal
policy legislation in 2001, 2002, 2003, and 2005, the years after the
dot-com recession were labelled the ``jobless recovery.'' The painful
aftermath of the Great Recession is familiar to all.
The COVID-19 recession is unique. Income has risen through 2020,
with employee compensation up by 2.0 percent overall, wages and
salaries up 2.2 percent, and the massive transfers in the Coronavirus
Aid, Relief, and Economic Security (CARES) Act ensured that disposable
income never fell below the level in Q4 of 2020. The recession is not
an aggregate income event. Similarly, housing values have risen over
2020, equity markets are up strongly, and household wealth has been
bolstered by the large amount of transfer income that has been saved.
The recession is not a financial market and wealth event.
The COVID-19 is a household spending event (``consumption'' in the
jargon of economics). Between Q4 of 2019 and the trough in Q2 2020,
real gross domestic product (GDP) fell precipitously by $1,951.5
billion or 10.1 percent. As shown in the chart (below), 65.5 percent of
that decline can be traced to reduced household spending on services.
This follows directly from the threat of the virus: consumption of
personal services such as restaurant meals, hotels, concerts, haircuts,
and the like involved personal contact and ran the risk of infection
with the coronavirus.
The impact of the virus's threat is shown more clearly in the chart
(below) reproduced from the Track the Recovery website. The chart
displays a real-time estimate of total spending (blue), as well as
spending by households in low-income (green) and high-income (red) zip
codes. All three measures collapse in early March 2020. Of note, in
part due to the large policy response, spending overall and in low-
income areas is now above January 2020. Spending in high-income zip
codes, however, has yet to recover and remains 2.2 percent below last
year.
There are two lessons from these data. The first is that there is
no real substitute for defeating the coronavirus. Only that will permit
the full resumption of economic activity. Second, and as a corollary,
none of the policies contemplated in the American Rescue Plan will
stimulate the lost services spending of relatively affluent households.
The Near-Term Outlook
Following the precipitous decline in early 2020, the economy began
to recover and is expected to continue to do so. The chart, below,
documents recent quarterly growth rates of GDP and reproduces the
recent economic projections of the Congressional Budget Office (CBO).
\1\ The blue bars represent the quarter-by-quarter growth rates of GDP
(at an annual rate), while the orange bars measure the ``output gap''--
the difference between the actual level of GDP and the potential for
GDP when economic resources are fully employed--as a percentage of
potential GDP.
---------------------------------------------------------------------------
\1\ I adjusted the CBO projection because the actual GDP for the
fourth quarter of 2020 is below the CBO projection. I raised the growth
rates of GDP in the first half of 2021 to reach the projected level in
Q3 of 2021.
The chart carries two lessons. The first is that the economy is
growing and growing rapidly (over 5 percent in the current quarter).
Clearly, the economy is far from recession territory and certainly not
a disaster. As a consequence, the output gap will fall below 2 percent
by the middle of this year and below 1 percent by the end of 2022.
As discussed earlier, the key headwind to the economy is the
reduced spending due to the interference of the coronavirus. The lesson
is that controlling and eliminating the virus is the only route to
rapid, sustained, economywide growth. Policies that hasten this
development should be a priority. In addition, Congress recently passed
$900 billion in support of the economy. This constitutes roughly 4
percent of GDP. If the funds for checks, unemployment insurance (UI),
the Paycheck Protection Program, and other funds move into the economy
over the next 6 months, this is support at an annual rate of 8 percent.
If recent history is any guide, much of these funds will be saved.
Over the course of 2020, the saving rate skyrocketed from roughly 7.5
percent to nearly 35 percent in the aftermath of the CARES Act and
remained nearly twice that through November.
The bottom line? The economy has underlying strength, and a lot of
fiscal support remains in the pipeline. If the virus vanished
overnight, there would be no case for further action.
The Theory of Economic Stimulus and Its Appropriate Application
The American Rescue Plan--the Biden administration's $1.9 trillion
proposal--is advertised as much-needed stimulus to reverse the course
of the economy and restore growth. As noted above, the economy is not
in recession and is expected to grow.
Moreover, recall that the ``theory'' of stimulus is that when the
economy is below full employment, Government stimulus--tax cuts,
checks, spending--will boost spending. This will, in turn, stimulate
business activity, which will begin a virtuous cycle of additional
income to workers, more spending, and more hiring. Because of the
virtuous cycle, $1 of stimulus is expected to have (much) more than a
$1 impact--the ``multiplier effect.''
That's the theory; it just has nothing to do with the current
policy debate. First, there will be no stimulus as long as the virus
stops households from spending freely. Further, even taking the
stimulus theory at face value, the $1.9 trillion size of the package
eclipses the economic need. As noted above, currently, real GDP is
below potential GDP with the output gap somewhere in the vicinity of
$450 billion (in 2012 dollars). The $1.9 trillion proposal is a bit
over $1.6 trillion in 2012 dollars. Thus, the proposal is a stimulus of
over three times the size of the output gap that is needed to get the
economy back to potential.
Based on any reasonable economic theory of stimulus, $1.9 trillion
is far too large. In the chart (below), I assume that the stimulus hits
the economy in equal increments over the 7 quarters from Q2 2021 to Q4
2022. Moreover, I assume the ``multiplier'' impact of $1 of spending is
a $0.50 increase in GDP--not much stimulus at all! As the chart
indicates, the economy exceeds its potential by the final quarter of
this year. From that point forward, the only result will be overheating
that will lead to inflated asset prices, inflated prices for goods and
services, and an increased risk of economic turmoil.
There is an alternative way to look at these efforts: as ``relief''
that replaces income to relieve the burden of the crisis, with no
pretense that there will be ``stimulus.'' From that perspective, the
funds should be targeted on those in financial distress, but the latest
proposal is far too broad. The request to send checks includes
individuals even if they did not miss a day of work or a single
paycheck. It would be better to target the long-term unemployed. Labor
Department data indicate that nearly four million people have been
unemployed for 27 weeks or longer. They each could receive a check for
over $96,000 with only a fraction of the same pool of money. While
that's not realistic, $2,000 more to the long-term unemployed would
cost only $8 billion.
The Composition of the Plan
The second key aspect of the proposal is that its content has an
internal contradiction. In broad terms, there are provisions to fight
the coronavirus with more vaccines and testing, more than $1 trillion
for households, and $440 billion for aid to communities and businesses.
If the plans to fight the virus are successful, however, there will be
no need for special monies to open schools, open child daycares,
provide paid leave, support businesses, or stimulate household
spending. Only if the vaccination plan is expected to fail does it make
sense to provide large-scale support for the economy through the summer
and into the fall. The sensible strategy is to robustly fund the Biden
vaccination plan, check for success, and continue to take the pulse of
the economy.
The third key feature is that some of the economics are very weak
(at best). It makes no sense to increase to $400 the supplemental UI
benefit. Setting the benefit at $300 was a tough compromise; there is
the potential for great damage in raising it to $400. At the $400
level, 50 percent of workers nationwide may be able to make more on
unemployment than at work, which can create a strong disincentive for
them to return to work. Similarly, there is no rationale for extending
the UI to the end of September (especially if one expects the labor
market to be essentially unimpaired by the virus during the summer).
Consider also the proposal to spend $40 billion on housing programs,
which broadly includes $25 billion for rental assistance, $10 billion
for homeowner assistance, and $5 billion for homelessness assistance.
\2\ \3\ Conceptually, I find it difficult to reconcile the need for
specific assistance on housing with the notion that Congress has
provided hundreds of billions in stimulus checks and enhanced UI
benefits to permit households to maintain their budgets--including rent
and mortgages. Moreover, the funding is not temporary; it would be
available to be disbursed for up to 5 years (until September 30, 2025);
well past the expected duration of the COVID pandemic. \4\
---------------------------------------------------------------------------
\2\ https://docs.house.gov/meetings/BA/BA00/20210210/111179/HMTG-
117-BA00-20210210-SD002.pdf
\3\ https://docs.house.gov/meetings/BA/BA00/20210210/111179/HMTG-
117-BA00-20210210-SD002.pdf
\4\ Sections 4201(j), Section 4207(a), Section 4206(a) of HFSC
reconciliation bill, available at https://docs.house.gov/meetings/BA/
BA00/20210210/111179/HMTG-117-BA00-20210210-SD003.pdf.
---------------------------------------------------------------------------
This request comes on top of $40 billion already provided for
housing programs in response to COVID, \5\ including $25 billion in
temporary emergency rental assistance funds Congress just provided in
the $900B spending bill that became law in late December. \6\ A total
of $80 billion seems out of line with the actual need. The National
Multifamily Housing Counsel's (NMHC) rent payment tracker has
consistently shown from April 2020 through Jan. 2021 that by the 20th
of the month 8-11 percent of renting households have not paid their
rent and that by the end of the month 5-7 percent of renting households
have not paid their rent. \7\ Using the upper end of those ranges puts
the price tag in the neighborhood of the National Council of State
Housing Agencies that estimated renting households could owe $13-24B in
unpaid rent by Jan. 2021. \8\
---------------------------------------------------------------------------
\5\ https://www.covidmoneytracker.org/
\6\ https://home.treasury.gov/policy-issues/cares/emergency-
rental-assistance-program
\7\ https://www.nmhc.org/research-insight/nmhc-rent-payment-
tracker/; https://www.nmhc.org/globalassets/research-insight/rent-
payment-tracker/data-downloads/rent-paymenttracker-02092021.xlsx
\8\ https://www.ncsha.org/resource/stout-rental-and-eviction-live-
data/
---------------------------------------------------------------------------
Another questionable design is the checks to households. The $600
checks provided in December will produce no real stimulus; raising them
to $2,000 doubles down on a failed policy. If the checks are, instead,
viewed as relief for those facing financial travail they need to be
targeted on the long-term unemployed.
Raising the minimum wage to $15 per hour is the antithesis of
``stimulus'' and should therefore be excluded from the package. CBO's
recent study finds that the proposed legislation would raise the number
of unemployed by 1.4 million. Jobs would decline because ``From 2021 to
2031, the cumulative pay of affected people would increase, on net, by
$333 billion.'' Also, ``That net increase would result from higher pay
($509 billion) for people who were employed at higher hourly wages
under the bill, offset by lower pay ($175 billion) because of reduced
employment under the bill.''
To date, the fiscal response to COVID-19 has been appropriately
large, timely, and entirely temporary. The final thing to note is that
many of these proposals have nothing to do with COVID-19 and are
permanent or clearly intended to be: the grotesque bailout of the
multiemployer pension system, as well as the expanded and advanceable
child tax credit, the childcare tax credit, the expanded earned income
tax credit, and the expanded and larger premium tax credits.
The bottom line is that the Biden American Rescue Plan is
inconsistent with the current and projected strength of the economy,
ignores economic support that is in the pipeline, spends over a
trillion on problems that the vaccination program is intended to solve,
and contains numerous extraneous proposals. Any legislative compromise
that will pass Congress should have to be much better designed.
Thank you, and I look forward to your questions.
______
PREPARED STATEMENT OF GIANNI CRACCHIOLO
Manager, Sal & Jerry's Bakery
February 18, 2021
Chairman Brown, Ranking Member Toomey and distinguished Members of
the Senate Banking Committee. Thank you for the invitation to testify
today.
I am Gianni Cracchiolo. My family owns Sal & Jerry's Bakery in New
York. Sal & Jerry's Bakery is a retail and wholesale bakery that
supplies the public and distributors with Italian cookies, pastries,
and breads. My father and his cousin, emigrants from Italy, founded Sal
& Jerry's Bakery in 1983 in the Bensonhurst section of Brooklyn. In
2012, we expanded our business by opening a second location on Long
Island that primarily supplies to distributors.
Our bakery in Brooklyn was a staple in our community for nearly 40
years until we were, unfortunately, forced to close our doors in August
of 2020. This bakery was our family's legacy, one filled with an
entrepreneurial spirit, and rich with tradition, culture, and love. It
was the quintessential American Dream for immigrants who came to this
country to provide a better life for their families.
Minimum wage hikes and other State and Federal regulations acted as
a silent killer that slowly chipped away at revenue and caused our
bakery in Brooklyn to perish. COVID-19 and the ensuing lockdowns were
not the main cause of our closure but were the straw that broke the
camel's back. Coronavirus should not be used as the scapegoat by
policymakers to further ignore the fact that small businesses are
vanishing in this country due to Government regulations making it
difficult to succeed.
The decline in growth and long-term viability of our bakery became
evident during the first few years of minimum wage increases in New
York. At our retail bakery, we had three tiers of wages for our
workforce. The 1st tier was our night bakers, who got paid a premium
for shift differential. The 2nd tier was day shift bakers, and the 3rd
tier was general laborers. General laborers are product packers, retail
counter service, and maintenance workers. These were individuals who
typically consist of working students, entry-level employees and hourly
staff. These individuals started at minimum wage as they began to learn
the trade and advance in their roles. Internal mobility was always an
option we encouraged our staff to pursue at Sal & Jerry's Bakery.
As Tier 3 minimum wage employees' pay increased by $1.00 per fiscal
year, wages began creeping up to the Tier 2 wages, and this was when
the problem started. You cannot justify the fact that working high
school students or entry-level employees with no prior experience
should be making the same wages as the experienced staff. It is neither
fair, nor ethical. As years passed, my Tier 2 workers began to take
notice of the minimum wage increases and demanded more pay to
compensate for their experience and skill. It was soon a domino effect
when 1st Tier employees wanted raises. We found ourselves with our
backs against a wall in a situation where all salaries needed to
increase. This crippled us.
To put this into perspective, each year that the minimum wage
increased $1.00, payroll for the year went up $40,000. Multiply that by
the number of years it has gone up and we're now at $120,000 total.
This choke-hold was something that a small bakery could no longer
withstand. I needed to make up for these increases and the only way to
do so was to pass it onto our consumers. How much is someone willing to
pay for a loaf of bread or a pound of cookies? At some point, people
who are used to paying a certain price for a loaf of bread are going to
start to complain, and that is exactly what they did. Our customers
weighed their options and sought out their baked goods elsewhere.
Customers began to shop for their baked goods at supermarkets and
large box stores like Target and Walmart. These stores offered lower
quality versions of our products at a price point that customers were
comfortable with. The corner bakery where they used to get their daily
bread was now a luxury item only to be bought for special occasions and
holidays. The big businesses benefited greatly from the minimum wage
increases and continued to see their valuations explode. They garnered
more customers, our customers, and replaced half of their minimum wage
staff with electronic kiosks and part-time help. It was a win/win
situation for big business. The minimum wage increases continue to make
it difficult for small businesses to retain their employees. On
numerous occasions, I have had dishwashers walk out on us within the
first 2 weeks of employment. A dishwasher is an entry-level stepping
stone role for most restaurants, bakeries, and food service businesses.
It's not the most glamourous job, but someone has to do it. Let me ask
you this . . . if you had a choice to work as a dishwasher and clean
mixing bowls, pots, pans, trays, floors, etc. for $15/hr or work at a
supermarket stocking shelves for the same wages, which would you
choose? This goes for all entry-level jobs. All entry-level positions
no matter what company you work for is now on an even playing field no
matter how easy or hard the positions. For me to keep my head above
water, I would have to pay them so well that they would stay. Meaning I
would have to sell bread for $20.00/loaf and hope to sell enough to
cover payroll each week.
To add insult to injury, in 2020 the CARES Act provided additional
unemployment incentives to our employees exceeding their regular pay.
We essentially lost our entire staff from March until July, because
employees were making more money staying at home claiming unemployment
than coming into work. Even though we received nominal assistance from
the Paycheck Protection Program (PPP), we called on our employees to
return to work, yet they did not comply. The Economic Injury Disaster
Loan (EIDL) assistance received did not even cover 1 month's expenses.
It became impossible to retain my workforce, maintain productivity, and
turn a profit. I had no choice but to close. The Federal Government,
provided more to help for people to stay home rather than help
businesses stay open.
Small businesses create about 80 percent of the jobs in this
country. They are the backbone of America. If small businesses continue
to close their doors, this country will be harmed economically.
Substantial minimum wage increases can be very damaging to small
businesses and you must compare the margin of profit vs. corporate
companies. Big businesses can afford these wage increases, we cannot.
Overall, 92 percent of small businesses oppose raising the minimum wage
according to an NFIB member ballot, because this will result in
unintended consequences like layoffs and bankruptcy. This will be the
beginning of the end for entrepreneurs and start-ups and we could say
goodbye to Main Street America as we know it.
Thank you for the opportunity to share our experience and I look
forward to any questions.
RESPONSES TO WRITTEN QUESTIONS OF SENATOR HAGERTY
FROM JOHN A. COSTA
Q.1. A letter dated February 1, 2021, from Amalgamated Transit
Union; American Public Transportation Association,
Transportation Trades Department, AFL-CIO; Transport Workers
Union of America; and International Association of Sheet Metal,
Air, Rail, and Transportation Workers--Transportation Division;
noted that public transit agencies face a projected funding
shortfall of $39.3 billion through 2023. During the hearing on
February 18, 2021, you noted that ``most of'' the $39.3 billion
potential shortfall that public transit agencies might face
through 2023 is due to the pandemic. Is there a way to quantify
``most of''?
A.1. Response not received in time for publication.
Q.2. Describe the financial situation of Amalgamated Transit
Union members' pension funds and how potential shortfalls might
be addressed without Federal transit assistance.
A.2. Response not received in time for publication.
------
RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN BROWN
FROM JYOSHU TSUSHIMA
Q.1. I'd like to give you a chance to respond to Senator Van
Hollen's question regarding situations he'd heard about in his
State in which renters were losing their homes not because they
were being evicted mid-lease, but because the landlord chose
not to renew their lease.
Is this a situation you are seeing in your work with
renters in Ohio?
In your experience does a tenant's inability to pay rent in
the previous months play a role in these situations?
A.1. Yes to both questions. Ohio, like many other States,
allows landlords to terminate a lease without reason once the
lease expires, even if the tenant offers rent or wishes to
renew the lease. Many Ohio families' tenancies have been
terminated during the pandemic because of this, and no
protections have been created yet to prevent no-cause lease
terminations during the pandemic.
The CDC eviction moratorium does not explicitly prohibit
no-cause lease terminations and has left it to individual
courts to interpret. Consequentially, when a tenant falls
behind on rent and happens to have an expired lease, landlords
often evict the tenant for ``holding over'' past the expiration
date of the lease instead of filing an eviction for not paying
rent. By claiming holdover, landlords can circumvent the CDC
eviction moratorium since the CDC eviction moratorium is only
applicable to tenants who fall behind on rent, even when
landlords are clearly terminating tenancies because tenants are
falling behind on rent. Even in our own court we see evictions
stopped by the moratorium when the landlord initially evicts a
tenant for falling behind on rent, only to have the landlord
file a new eviction immediately after to claim the tenant is
holding over.
This is occurring even when tenants can catch up on their
rent or are eligible for rental assistance. Simply falling
behind on rent is enough for many landlords to terminate
tenancies in order to replace tenants who are vulnerable to the
disruptiveness of the pandemic with tenants who are more
economically resilient. In other words, a seamless undisrupted
flow of rent is often given more value than the well-being of
the renters paying it.
Nearly every renter is vulnerable to no-cause lease
terminations since the vast majority of renters' leases expire
after 1 year. This pandemic has already lasted more than a year
and is poised to be an endemic disease, creating great
uncertainty about when and how tenants can return to a normal
work life and pay rent without disruptions. Leases signed in
March 2020 are now expiring and every month another month's
worth of leases will expire. The lack of protections against
no-cause lease terminations has put hundreds of thousands of
Ohioan households and millions of American households at risk
of losing their homes.
Many tenants are facing displacement from no-cause lease
terminations even when they never had problems paying rent. In
cities like Columbus, Ohio, which have a high demand for
housing, many real estate investors prioritize acquiring and
developing rental properties to attract higher paying tenants,
consequentially forcing many poorer tenants to relocate in the
middle of the pandemic and compete for whatever scarce
affordable housing remains.
The reality is that poor families are being forced out of
their homes regardless of whether they are paying rent because
landlords have a virtually absolute legal right to terminate
tenancies without explanation, despite the funding available to
help tenants catch up on rent or the increased risks of
spreading COVID-19 when families become homeless.
Q.2. Last year I introduced a bill called the Eviction Crisis
Act (S. 3030) with Senators Bennet, Portman, and Young.
Do you think this legislation would be beneficial in
helping inform policymakers and the public about eviction
trends across the country, as well as offering other
protections to renters who are facing or have faced eviction?
A.2. The Eviction Crisis Act (ECA) would address some of the
most fundamental problems in this country's eviction crisis by
focusing on establishing landlord-tenant focused community
courts, increasing data collection and analysis, and developing
programs to prevent housing instability during a crisis.
Landlord-Tenant Focused Community Courts
Establishing and developing landlord-tenant focused
community courts, or ``housing courts,'' is one of the most
effective steps a community can take to prevent evictions and
maintain stable housing and is a crucial piece to the ECA as a
whole. Housing courts provide a centralized location for
agencies to connect with tenants to address the broad range of
issues that lead to evictions by connecting tenants with legal
assistance, financial assistance, healthcare providers, and
even potential employers.
Lack of understanding the legal process is one of the most
significant causes of evictions that can be corrected with
housing courts that provide tenants access to housing
attorneys. Most tenants have minimal understanding of housing
law, and often carry mistaken beliefs of what the law is, which
leads to decisions that cause evictions. One of my clients, who
had been paying rent to her landlord for 30 years, withheld
rent when her landlord failed to repair a leaky roof after
several years of complaints. Mold permeated her home as
rainwater ran through the ceilings, forcing my client to close
her home daycare business that she had run for nearly 20 years.
Legally, because my client withheld rent, her landlord was
entitled to evict her despite his failure to make repairs. This
is a common mistake made by Ohioan tenants that can be avoided
when tenants are provided access to housing attorneys at
housing courts.
Integrating financial assistance agencies with housing
courts also strongly promotes collaboration between landlords
and tenants to maintain housing. Such agencies are often
coupled with social services that address underlying causes of
tenants falling behind on rent to make sure tenants are less
likely to fall behind on rent in the future.
Perhaps one of the greatest benefits in having a designated
housing court is that agencies can collaborate with each other
to create and execute plans to help tenants access safe and
stable housing, instead of asking tenants and landlords to
individually piecemeal assistance from several disjointed
agencies across the service area. Housing courts with well-
integrated services can also alleviate overworked court systems
by diverting landlords and tenants towards solutions that do
not require judicial intervention.
Maintaining housing courts also allows magistrates and
judges to develop their expertise in housing law and local
housing issues, which is necessary for the ever-growing
complexities and changes in housing law. Different housing laws
exist for private rentals, mobile homes, hotels, rooming
houses, land contracts, work for rent leases, Section 8
vouchers, elderly housing, and so on. Proper evaluation in
housing cases often requires experience, research, and an
established network of housing law colleagues to provide
feedback. Like any profession, housing law is a practice that
develops with focus, effort, and time, which is precisely what
designated housing courts are designed for.
Data Collection
Data on evictions is often scarce, especially when it comes
to understanding and measuring risk factors for evictions.
Before 2017, hardly any data was available in Franklin County
to accurately describe basic demographics of the 18,000+
households that faced eviction every year. Although we could
extrapolate from anecdotal observations, we could anything
about evicted households with precision.
To address this gap my team started gathering data to
measure tenant demographics, how effective housing attorneys
were in preventing evictions, which landlords were more likely
to evict, and other factors that affect eviction practices.
This data has been helpful in not only managing our own housing
stability programs but has also been useful for our community
partners in identifying which communities and groups of people
most need help and what kind of help they need. While our
small-scale data collection efforts have demonstrated its
usefulness, we are only left to wonder what else could be
measured if we had better resources, such as assistance from
statisticians, economists, or other data specialist
professions.
A national effort to collect data would produce invaluable
insights on housing and evictions in the United States. Courts
and communities around the country have implemented a wide
range of programs to prevent evictions. Eviction data would
help measure the performance of these programs to identify what
approaches are effective in reducing evictions and which
programs could use development.
Crisis Assistance Programs
Focused crisis-assistance programs are needed to address
nonlegal problems that are common among impoverished
households, such as barriers and instability with health,
education, employment, and other social determinants. Legal
assistance, financial assistance, and good court outcomes are
necessary but incomplete solutions for many families seeking
stable housing. As an attorney I cannot provide therapy to my
mentally disabled clients, which is why we hired a social
worker to assist them with accessing mental health service
providers. Tenants are diverse in their backgrounds and needs,
so we are unable to develop singular cookie-cutter solutions to
maintain their housing. Dedicated crisis assistance programs
would be far more effective in assisting tenants with nonlegal
challenges that cannot be addressed through the legal process.
------
RESPONSES TO WRITTEN QUESTIONS OF SENATOR SINEMA
FROM JYOSHU TSUSHIMA
Q.1. Arizona struggled to allocate the rental assistance
dollars provided by the Coronavirus Aid, Relief, and Economic
Security (CARES) Act. Much of the backlog seems to have been
attributed to onerous requirements at the State level, which
require renters to go to great lengths and provide excessive
paperwork to prove financial damage due to the coronavirus
outbreak. While it is vital we prevent fraud in all Federal
coronavirus relief programs, we also need the relief to get to
Americans who are hurting.
In your opinion, how can Congress better engineer or help
streamline rental assistance programs so that dollars get to
those in need in a timely manner?
A.1. One suggestion is to develop and offer a standardized
system for applications, triaging, and distribution that
grantees can adopt and implement. If possible, also develop
standardized software or web services for processing
applications and maintaining data. Not every community has
preestablished logistics to distribute rental assistance or to
meet the increased demands for rental assistance. Creating
these systems can be time consuming and cumbersome. Offering a
standardized system could streamline establishment of new
distribution systems and provide solutions to common
distribution problems that grantees have not developed
solutions for.
Grantees could also benefit from sample triage models,
especially when funds cannot meet demand or when funds
fluctuate. Without triage models, grantees are left to develop
and experiment with triaging that takes time to implement and
adapt current systems to.
A process should be developed for taking and waitlisting
rental assistance applications even after funds are depleted to
help measure demand. Even if applicants do not qualify for
assistance, it would be extremely useful to know how many
households are seeking rental assistance and how much rent they
are seeking. A waitlisting system could also expedite
application processing ahead of time before funds are
replenished.
It would also be useful if all grantees reported how long
it takes to distribute funds, from date of application to date
of payment, to help identify what logistics have been effective
and what common barriers are encountered. Such reporting and
evaluation could provide useful insights for improving a
standardized system.
Q.2. In addition to excessive paperwork, what other types of
barriers are you seeing renters experience when applying for
rental assistance?
A.2. We are constantly running into communication problems
between rental assistance providers, tenants, and landlords.
Occasionally landlords miss emails from agencies and do not
supply the necessary documentation to complete an application,
or tenants do not understand what their next steps are.
Another problem is that some landlords refuse to work with
rental assistance providers, leaving many tenants helpless when
providers require cooperation from landlords before
distributing funds.
As mentioned earlier, there is no clear waitlisting
process. Instead, tenants are told to wait until funds are
available again before attempting to apply, leading many
tenants to resubmit applications.
Another barrier is the constantly changing criteria and
processes for rental applications. These unpredictabilities are
difficult to plan around for tenants and the people helping
them navigate the process. As attorneys, my team cannot always
rely on the timelines advised by our providers in order to
draft reliable payment plans for our clients. It also makes it
more difficult for our clients to plan their immediate finances
as they build back towards financial stability.
Additional Material Supplied for the Record
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