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Pelosi endorses using automatic stabilizers to keep coronavirus relief flowing

Speaker sees opportunity to use triggers for unemployment benefits, food assistance, Medicaid reimbursement rates

Speaker Nancy Pelosi on Thursday endorsed an idea that many Democratic lawmakers have been pushing: to use so-called automatic stabilizers to keep critical coronavirus relief programs running without Congress having to repeatedly re-up funding.

“We think that there should be stabilizers in these bills,” Pelosi said during her weekly news conference when asked if a coronavirus relief package that her caucus is drafting will further expand unemployment insurance benefits. “So if the unemployment rate, say now it’s up at 7 percent, it triggers 26 weeks of unemployment benefits.”

[These Democrats want automatic triggers to keep coronavirus relief flowing]

Automatic stabilizers are a mechanism for keeping government assistance flowing by tying relief programs to economic or timing triggers. The New Democrat Coalition, a group of more moderate House Democrats, has been pushing leadership for months now to include automatic stabilizers in economic relief legislation.

Pelosi’s comments on the matter Thursday are the first time she has publicly weighed in on the idea. She did not explicitly promise that the package Democrats are drafting will include automatic stabilizers but rather presented it as one option that the caucus is discussing. Still, her expression of support for the idea increases the likelihood that some could make it into the measure.

In addition to unemployment benefits, Pelosi said automatic stabilizers could be used for other relief like the Supplemental Nutrition Assistance Program, informally known as food stamps, and federal Medicaid reimbursement rates, known as Federal Medical Assistance Percentages (FMAP), “so that you don’t always have to say, ‘Let’s debate whether that’s necessary.’”

Pelosi did not mention any specific stabilizer proposals, but a few of her caucus members have provided some options.

Earlier this week, Virginia Democratic Rep. Donald S. Beyer Jr., the vice chairman of the Joint Economic Committee, unveiled a framework for using an automatic stabilizer to extend the enhanced unemployment benefits that Congress passed in March.

The previous measure provided for an extra $600 a week in unemployment insurance on top of existing state benefits for four months. Beyer’s proposal, which he worked on with Democratic Sens. Jack Reed of Rhode Island and Michael Bennet of Colorado, would extend the availability of that enhanced benefit until 30 days after the national emergency declaration for the pandemic ends, after which it will phase out over 13 weeks.

Their proposal also provides additional unemployment benefits that vary by state based on their unemployment rates.

Washington Rep. Derek Kilmer, chairman of the New Democrat Coalition, has a bill that uses an automatic stabilizer to extend the life of the Paycheck Protection Program, which provides forgivable loans to small businesses to keep employees on payroll. It would sunset the program 30 days after the national emergency declaration ends and allow borrowers to request extensions of the eight-week loans as needed. 

House committee chairs submitted their proposals for the relief package to Pelosi earlier this week, and leadership is expected to finalize the bill in the coming days.

Pelosi opened her presser by highlighting some things Democrats plan to include in the bill, like funding for state and local governments, a national testing program, SNAP, election assistance and the Postal Service, among other priorities she’s consistently mentioned over the past few weeks.

“I won’t go into the whole bill because I have to get the agreement of my caucus,” the speaker said.

Pelosi and House Majority Leader Steny H. Hoyer have indicated they may bring the Democratic package up for a vote as soon as next week since Republicans appear to be in no rush to negotiate a bipartisan bill. But Pelosi on Thursday did not commit to the House voting on the partisan plan.

“We’ll see,” she said. “Everything that I just mentioned has bipartisan support in the country. I hope it does in the Congress. But we have to start someplace. And rather than starting in a way that does not meet the needs of the American people, we want to set a standard. And again, we need a presidential signature, so at some point we’ll have to come to agreement.”

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