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$1,200 may be enough in Mitch McConnell’s hometown of Louisville, but not in most US cities

The COVID-19 crisis has vividly accentuated the precarious economic situation of paycheck-to-paycheck living for millions of low- and middle-income Americans, even professionals, in major urban areas, especially renters. The CARES Act’s relief payments of up to $1200/$2400 failed to alleviate their financial burden because Congress neglected to adjust payment amounts and qualifying income thresholds for the significant geographic differences in living costs across America. This blindness to actual costs has plagued federal policymaking for decades. But, since the next round of relief seems to be approaching the coveted must-pass status and the August recess is fast approaching, Congress has a unique opportunity to start to remedy this ongoing unfairness.

The higher cost of big city living affects people of every race and ethnicity, and people of color, especially Latinos, have felt the coronavirus economic sting more keenly. One of the major reasons is that large cities are more diverse than the rest of the country. For example, the monthly median rents in San Diego (32 percent Hispanic — $1,993), New York City (29 percent Hispanic — $1,997) and Miami (45 percent Hispanic — $1,641) are almost double, or more, those in Louisville (5 percent Hispanic — $1,020), Sioux Falls (5 percent Hispanic – $976) or Casper (8.3 percent Hispanic — $1.087). Nominally higher incomes partially make-up the difference, but many households in high-cost urban areas were unfairly denied COVID-19 relief payments despite their income barely covering their reasonable expenses, and most of those who got money did not receive enough to cover one month’s rent. Conversely, households with the same standard of living in other areas of the country received enough to cover almost two months’ rent.

Without Congressional relief, experts expect an oncoming wave of millions of evictions as the postponing moratoriums expire. Its concomitant homelessness and ability-to-work crisis will make the economic distress up to now seem like the amuse-bouche for a nightmarish 12-course banquet of all the dishes you most dislike. It is hard to overstate the long-term negative impacts of eviction. This is why federal rent control was one of the major promises of almost every congressional Democratic primary winner in New York City late last month, including newcomers like Ritchie Torres who made it a campaign centerpiece, and veterans like Rep. Alexandria Ocasio-Cortez who has consistently harped on cost-of-living issues. It is not a matter of socialism. It is a matter of understanding the needs of their constituents.

Accounting for cost-of-living in both the qualifying income thresholds and relief payment amounts can help city dwellers keep their homes and their internet access, especially for their kids, and have a better chance at rebounding. It will also help the small businesses where they shop, which need all the relief we can give them.

I do not mean to cast blame on members of Congress for failing to include cost of living in the CARES Act. It was a hastily agreed-to bill in an already dysfunctional Congress at the start of a hundred-year emergency. Things were bound to fall through the cracks and, after all, one-size-fits-all is the traditional way to make individual-level policy in Congress. It is used for official poverty calculations, progressive taxation brackets and most other income-based federal benefit formulas that have historically failed to capture the disproportionate burdens faced by the urban poor or even changes in the country’s standard of living (the only exceptions are public housing allowances and SNAP).

Now, Congress can use this opportunity to break this cycle of unfairness.

Following decades of reports, the National Academies of Sciences, Engineering, and Medicine most recently raised the alarm about the Official Poverty Measure’s undercount of people living in poverty in high-cost states last year in their Roadmap to Reducing Child Poverty. The Census Bureau already publishes the small-area Supplemental Poverty Measure which can be used as a starting point to improve upon, as the Economic Policy Institute’s Family Budget Calculator does.

Republicans have threatened to lower the amounts of the second round of stimulus payments and dramatically limit the qualifying income thresholds to $40,000, cutting out 20 million American families that received the first stimulus check. The Democrat’s HEROES Act proposed keeping the original basic amount and qualifying income levels (dependent payments are increased). But keeping the original income cap and payment amounts falls far short of what should be the goal.

Congress needs to provide small-area, cost-of-living adjustments for this and all COVID-19 relief payments, personal income tax brackets, and cash or near-cash benefits to fairly account for disproportionate burdens on the urban poor and other city and high-cost area dwellers. It is the equitable thing to do.

Kenneth Romero is the Executive Director at the National Hispanic Caucus of State Legislators (NHCSL).

Tags Alexandria Ocasio-Cortez CARES Act Stimulus

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