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Brian Lehrer: It's the Brian Lehrer Show on WNYC. Good morning everyone. As the national politics media focuses primarily on the Trump impeachment trial that begins today, and yes, we will have live coverage of the proceedings beginning at one o'clock, the urgent business of passing the next COVID relief bill is also taking place. Tomorrow, the House Ways and Means Committee is expected to begin writing the actual bill, likely to include $1,400 checks to people with incomes of $75,000 a year or less, and phasing out gradually between $75,000 and $100,000.

There would be an unemployment insurance add-on of $300 to $400 a week through August. The current $300 boost is set to expire on March 14th, so timing is crucial here. Democrats are also looking now at increasing the child tax credit to $3,600 for each child under six years old, $3,000 for kids 6 through 17. Now, as with the pandemic itself, lower-income people and especially Black and Latino lower-income people, are the hardest hit.

As with many things that fall into that category, Republicans in Congress are saying everyone else can afford the amount of spending that's being proposed to help, currently, $1.9 trillion, though President Biden says he's open to negotiation on the top line number and certain specific items. What about housing assistance? What about aid to state and local governments so desperately needed in many states? What about money to open schools with expensive COVID protections? What about the $15 minimum wage or permanent policy change beyond immediate COVID relief that some people want to be part of the bill?

As important as any of the particulars in this bill, why is Congress debating relief bills piecemeal every few months rather than just pegging relief to measurable conditions in people's financial lives? Joining me now is a guest who makes a case for doing just that. She is Claudia Sahm, S-A-H-M. An economist and contributing opinion writer to The New York Times. She's a former federal Reserve Board section chief in the Division of Consumer and Community Affairs and author of the Sahm Rule, which The Times describes as an early recession signal. Her most recent Times column is called Put the Money Printer on Autopilot. Ms. Sahm, thanks very much for coming on. Welcome to WNYC.

Claudia Sahm: Great. Thank you so much for having me on.

Brian Lehrer: Let's start with this concept of putting the federal money printer on autopilot. Does that refer mainly to relief checks and extra unemployment benefits?

Claudia Sahm: It can apply to many different programs that we pursue in a recession to mitigate the hardship and get us back on track. We've had these kinds of programs for a very long time. Unemployment Insurance Program is the core, what they're called automatic stabilizers. In any recession, more people become unemployed and so more benefits come out of that system.

That is the automatic stabilizer and what I and several other economic policy experts have argued is we should do more of that. The payments to people, these stimulus checks, that's one example that I've worked a lot on, but they're also enhancements to unemployment insurance, ramping up of food stamps, there's so much that we could have Congress agree outside of a recession or any time now would be good too, to say we're going to tie it to economic conditions. I often focus on the unemployment rate. There are other ways you could do it. I absolutely think it should have something to do with our people back to work. They want to work.

Brian Lehrer: Listeners, we could take phone calls on any aspect of the COVID relief bill or related economics for Claudia Sahm, but maybe one of the things you want to call in on with respect to this idea of triggers that put the money printer on autopilot, not just to print money and print money and print money for its own sake, but for some predictability. What kind of economic conditions? What kind of financial conditions in people's personal lives would trigger relief that could be depended on? Listeners, maybe one of the things you want to call in on is what it's been like to live with the uncertainty?

If you are dependent on these government checks, the uncertainty that's political uncertainty in Washington as you don't know whether something's going to be renewed, whether something's going to be increased or decreased. Anybody want to call about living with that uncertainty during the pandemic, 646-435-7280, tell us a story or ask a question of economist Claudia Sahm. 646-435-7280 or you can tweet @Brian Lehrer.

It's crazy in a way, Ms. Sahm, that they didn't do that in the first place. My question is why didn't they? Is it that Democrats and Republicans couldn't agree on what those metrics should be?

Claudia Sahm: Well, it's a tough question. It's a frustrating question. Before I get into the answer, I will say for any of the listeners, even if you don't pick up the phone or tweet, my heart goes out to you. If you are having trouble navigating these benefits systems, in particular, the unemployment insurance system. The deck is stacked against a lot of people depending on where they live and what kind of jobs they've had and we're working really hard to fix that. I've heard from many people-- I'm on Twitter and I've heard from many people and you all are what's pushing me on and many other experts because it shouldn't happen.

Brian Lehrer: What do you hear on Twitter? What are people communicating to you that you might like to reflect back?

Claudia Sahm: I think the biggest one, and I have been very vocal especially in the last week about the $1,400 checks. I think for many reasons, half of US households lost money last year. The suffering this year, the disruption is so immense and frankly, we don't have a safety net that is built for this moment. I've been in conversation with some people daily, and what they tell me, and why they are so, "Fight for those checks," is because they have tried for months to get their jobless benefits that have been promised to them. Maybe a spouse or family member can't get them.

Those checks, the last two in CARES and the $600 one, they went out to 90% of the US population, women, men, and children. To these unemployed, yes, they want those jobless benefits. That extra weekly benefit, the kickback on in December, the $300 a week, that is real money, but it doesn't matter if you can't get it even if you're eligible for it. It's just a sign of how broken our safety net is.

Unemployment insurance has been put in disrepair, sometimes actively in certain states like Florida is one. It's a watered-down system and it's missing people, and it's not uniform who it's missing. People of color, communities of color, young adults coming out into the workforce, you go on and on. Women that have had to drop out for family responsibilities. If you drop out, if you quit your job, you don't get jobless benefits. There's just, it's a safety net that should be and was intended-- It was born in the Great Depression. This was part of the new deal and it just hasn't been kept up. This crisis makes it clear we need it better, but they can't fix that one on the fly.

Brian Lehrer: I was just going to say we did a separate segment on Friday about women who drop out for remote learning help, for example. For their kids, dropping out of the workforce. You're a Times contributing writer, maybe you saw their section, The Primal Scream, over the weekend which had to do with moms who are trying to work. It also covers unemployed moms, but even moms who are trying to work and how they are disproportionately affected by all this.

Yes, I hear you on everything that you're saying. Before we go to the phones, here's the debate in Washington. This is why it's not bipartisan right now, as much as President Biden would like it to be. I'd like you to react to this clip of Republican Senator Pat Toomey arguing that the bill as proposed is too big in a number of ways. We'll go down some of the specifics in this minute and a half clip. He was speaking on Sunday to CNN's Jake Tapper.

Pat Toomey: The problem with this is, Jake, 42 days ago, we passed the fifth huge bill, another trillion dollars, bringing the total to over $4 trillion. Much of that money, a huge amount of money, not even out the door yet. Much of it was way too broad and not sufficiently targeted as it was. All of these bills were passed with big bipartisan votes. The biggest of them, the CARES Act from March, over $2 trillion, not a single no vote in the entire Senate.

Here we are, the economy has come roaring back, the unemployment rate is less than half what it was, disposable income is at record high, savings rates are at record highs, and where we have problems is very concentrated, Jake. It's not an economy in collapse the way it was in March. Today we have serious problems for workers in the restaurant, the hospitality, the travel and entertainment sectors. That's really a handful of places and if those folks have fallen through the cracks of the trillions of dollars we've already spent that's been meant to help them then let's have a conversation about how to help those folks, but nobody is making that case. What you hear as these broad generalities about well, people are suffering, so let's spend another $2 trillion. It's not the right solution.

Brian Lehrer: Again, that was Republican Senator from Pennsylvania, Pat Toomey on CNN State of the Union with Jake Tapper on Sunday. Economist Claudia Sahm, contributing opinion writer for The New York Times is with us right now, former Federal Reserve Board official. Ms. Sahm, I could tick down some of the points in that and I will, but what jumped out at you? What would you like to respond to from that?

Claudia Sahm: With all due respect to Senator Toomey, he is wrong on so many points in what he just said. A lot of it goes back to what I was talking about, the reality of our ability to help people in need. Like I said, we know from the Census Bureau, a very reputable source of information about what's happening in the economy, that half of all US households lost income from work last year, or since the crisis began. These numbers are from January. We keep watching this and only 20% of US households have gotten any money in jobless benefits. There's a lot of reasons for that gap, but that tells you just how much need there is and how short we are falling with the systems we have in place.

One thing I do agree with Senator Toomey on is that there are pockets of deep, deep distress and the service sector is one of them. I disagree that small, I mean, my goodness, the service sector in the United States is huge, employs massive numbers of workers, and women have had to leave the labor force. Anyway, I agree that there's these pockets of distress, but where I fundamentally disagree with him, and frankly, many policymakers in DC have had this discussion. We know there's massive need, we know some of it is more intense. We do not know on a family by family basis who needs that money. We cannot design policy on the information we wish we had because we can't-- Oh, go ahead. Sorry.

Brian Lehrer: I was just going to follow up on that exact point because he cites serious problems for workers and industries that he names. You were just saying in general service industries, yes, you agree with him. He cites restaurant, hospitality, travel entertainment as sectors that he calls a handful of places. If people who work in those fields are so hard hit and people who might be able to work comfortably at home and are still making their incomes of whatever they were, maybe they're $60,000, maybe they're $80,000 on either side of that $75,000 line, why shouldn't it be more targeted, or are you arguing that there's just no way to actually do that?

Claudia Sahm: First of all, something like the checks, the stimulus checks, the top 10% of US households by income do not get a check. They have not gotten one in this entire crisis. Those checks are targeted. The top 10% in the United States, they're different like the rest of us. Well, I should say actually I didn't get any checks. There are people who shouldn't get checks and they didn't. It is targeted. The debate that has been live the last couple of weeks is should they be more targeted?

We know that about 80% of US households got the full checks. I'm sorry, the population, the women, men, and children got the full checks in CARES, they got the full checks with the $600. The discussion, what Republicans put forward about lowering the income limits from $75,000 per adult to $50,000 per adult in income, like that would shift who would get the checks, you would move from 80% of the population having got $600 starting in December, to 70% of US households getting $1,400.

That's 40 million people with a broken promise of topping it up to $2,000. I will bet my bottom dollar that there are tens of millions of people in that 40 million who need that check and who were promised and we're expecting that check.

Now it is absolutely true that there are individuals, and I've heard from some of them, who don't need this money. I always turn back around and give them a list of 10 charities that I have donated to over this crisis, despite the fact having gotten no checks. I hear you. This is not a perfect system. If I could wave a magic wand, Unemployment Insurance would be perfect, other social safety net programs would be perfect, but I ain't got that wand and Senator Toomey doesn't either.

We have to respond to the world that we live in. I truly believe that that 80% of the US population, they should be getting a $1,400 check right away. The next 10% from the 80th percentile to the 90th, they only get a little bit of a check, and actually the Democrats' plan yesterday will probably narrow-- Some people got a partial check last time, maybe won't get one this time. If we got to save some money, it's only like 20 billion or so, so it ain't a lot, but I mean, if you're going to save some money, that's the way to do it and I firmly agree those top 10%, they didn't get a check before and they shouldn't get one now.

Brian Lehrer: Let's take a phone call. Samantha in Queens. You're on WNYC. Thank you so much for calling in. Hi, Samantha.

Samantha: Hi. How are you?

Brian Lehrer: Very good. How are you?

Samantha: Thank you for taking my call.

Brian Lehrer: Sure.

Samantha: Good. I'm a single parent by choice of an 18-month-old boy. I'm 49 years old. This was probably the worst financial decision I could've made. I went through my maternity leave. I'm a social worker. I worked in the hospital. I had my maternity leave, but I wanted to take a little more time with my son. I resigned and then the pandemic hit. I've had no options for childcare. My mom is older and can't help. There are no benefits for me and as a social worker, I understand this.

This has really put me into a position that anything that I've saved is being eaten away. I'm lucky that I had a relative who died and gave me a little bit of money, but once that's gone, I could have never as a social worker could put that money aside, that's it. I can't imagine not working until I either get too sick or die because of what are going to be my long-term options and short-term. I'm going to have to start working soon, but childcare is a real issue.

Brian Lehrer: What government benefit would be appropriate to your situation? Have you thought it through like that?

Samantha: Absolutely. First of all, we need some kind of national childcare program in this country subsidized, and the fact that we don't, even working in the hospital, the childcare that was available to me had I been working there was over $1,500 a week. As a social worker, there was no way I could have afforded that at the hospital. It's amazing to me how there's this idea that we have to protect our children before they're born, but once they're born, there is no help basically.

Brian Lehrer: Right, and that's of course a long-term policy issue, how much of a federal childcare program should there be a pandemic or no pandemic.

Samantha: Correct.

Brian Lehrer: Have you been living in uncertainty because you got the first stimulus check, but you don't know when other stimulus checks are coming and you're having to wait, rather than it being triggered by your ongoing economic conditions and the way our guest is proposing, that you're having to wait for Congress to go through these partisan debates and you don't know what's coming.

Samantha: If they had any sense of reality in health insurance or they get the best health insurance, they have a steady paycheck. They have all these benefits that their constituents don't have. It's just incredible to me that they don't remember that they once came from somewhere else where maybe that wasn't the case for them. The stress is enormous. The stress is enormous, sleepless nights because I have a baby, but also sleepless nights because how do I manage this? I don't want to put that stress on him.

Brian Lehrer: Samantha, I'm going to leave it there. Thank you very much for that important and illuminating story, and good luck to you and your baby.

Samantha: Thanks a lot. I appreciate it.

Brian Lehrer: Let me go right onto another call and then I'll have you react to both, Sahm. Patricia in Bellmore, Long Island, you're on WNYC. Hi, Patricia.

Patricia: Hi, guys. Thank you so much for having me and as always, I adore this radio station. Thank you for all the work you do.

Brian Lehrer: Thank you.

Patricia: I just wanted to call in and say that God bless the fact that both my husband and I are able to still, at this point, be working. I did take a 20% reduction in pay from my employer and I was happy to help and support the company as a whole in doing so. We did receive stimulus checks and payments and we haven't touched that money. We put it in our savings, thank God. We're still racking up credit card bills, who doesn't need the help and assistance? I've just felt a bit guilty in receiving that because so many people don't have that work, and nothing in life is for free. What's going to happen when we do our tax returns, we received free money, that's not probable.

The other point of it too is, maybe there's an opportunity for opening a platform where people can say, "Okay, if I've been routed this money because we have an imperfect system, maybe there's a way to like donation." Like, "Hey, let me return these funds to said place so, that way, these funds could be allocated to shelters or to people that don't have that work." [crosstalk]

Brian Lehrer: Or our guest was saying before, give it to the charity of your choice.

Patricia: Right, exactly.

Brian Lehrer: Patricia, thank you. Thank you. Ms. Sahm, on either of those two callers.

Claudia Sahm: I just want to thank both Samantha and Patricia for sharing their perspectives. This just shows this crisis has touched so many lives and it's touched them in different ways. I guess the things with the checks, you'll hear a lot of people in DC it's like, are they going to spend it? Is it going to get the economy going? One thing that I really appreciate about sending money to people is it empowers every single family. Every single person that gets those checks to decide what they need most in this moment of crisis. That can be paying the bills, it can be creating a buffer, setting some aside.

I want to emphasize, the sacrifice, Patricia, that you're making by taking a pay cut, those are occurring across many people who are working. That has never happened en masse since the Great Depression. Employers are very wary to cut pay because you're doing the same work you were doing before and you get less money. It sounds like you have a family situation, you can get through this, but racking up credit card debt is tough too.

I love the fact that we give you money, you can decide what you want to do. If you go on the GoFundMe page, there are heartbreaking story after heartbreaking story, but it's your money. You can decide. I do want to emphasize, a lot of times people are like, "We don't have this money. We have to pay it back." First of all, the stimulus checks are not taxable. You're not going to pay taxes on those. That's a good start. The federal government right now has the capacity to borrow to invest in our people. We have low-interest rates.

The federal government is not like a family or a small business. They're the only entity in the United States-- they're elected. We got them in Washington, they've got tough decisions to make, but they can do this. They can spend this money. Now, turning to Samantha, I think this--

Brian Lehrer: Patricia, I'm going to let you go now. Thank you very much for your call.

Claudia Sahm: Oh, yes. Sorry.

Patricia: Thank you, guys.

Brian Lehrer: Good luck with everything.

Patricia: Be well.

Claudia Sahm: Thank you.

Brian Lehrer: Turning to our first caller, and you remembered her name, very impressive. Samantha from Queens, go ahead.

Claudia Sahm: I think, Samantha, first of all, I know it's tough being home with your kid. I've got two kids. That's a very special time. They grow up fast. When they are teenagers, they're a little sassy.

Brian Lehrer: You noticed that.

Claudia Sahm: Yes, I think we all have. The point with paid leave is such a good one because this is a crisis. I truly believe we need to get money out to people. It's a bridge to the other side of this. Paid leave is in need now, paid leave will always be in need. We have many women, many dads, and family, they're trying balance raising children, doing your best by them, and also contributing and working. Work at home is real work too. We need to have this paid leave.

The Relief Bill, the $1.9 trillion package is what's right in the big debate right now, and that's not it. The next round is a big infrastructure package, probably of the same size, almost $2 trillion. I believe, and as I advise members of Congress, that's infrastructure writ large. That's investing, not just in bridges and roads, but in our people, and the system of paid leave is absolutely part of it.

Shoring up the unemployment insurance system, that's a big part of it too, but paid leave and really understand the reality of what it means to be a working parent, that's good for the parents. It's also good for people who work in that industry of child care to make sure that they're paid living wages for them helping support our children and get the-- The next generation deserves everything we can give them. They're going to take-- [crosstalk] [laughs]

Brian Lehrer: Jude in Brooklyn, you're on WNYC. Hi, Jude.

Jude: Good morning, Brian. Thanks for taking my call. I just want to say that during the pandemic, at the heat of it-- I work as a cab driver and I have applied to adjust my status so that I can get a working social security, but I haven't received it in a while. As a patriotic resident, I decided to apply for tax identification number. I've been filing my taxes using tax identification number in the past two years, and I'm going to do the same this year still while still waiting for social security number from the USCIS.

I just wanted to say I've never seen myself as a vulnerable person. I'm just a little bit comfortable until the pandemic came where nothing was moving, things was difficult. I have two children born in the United States. It was difficult to cater for them. I see people receiving stimulus packages and my children are citizens. There was no way to access it because the father doesn't have social security, even though they have and they have all that. I think something should be done about that in the future because even though-- [crosstalk]

Brian Lehrer: We're in a situation. Let me just amplify that point for our listeners. You, as the father of your children, don't have a social security number. Your kids are US citizens if I understand you correctly, and they cannot get even their portion of COVID relief because of your immigration status. Claudia Sahm, I wonder if you would address Jude's situation. This, obviously, has to do, not just with economic policy, but with immigration policy.

Claudia Sahm: Yes. Jude, what I would tell you is help is on the way. You're in a fortunate situation in that you're applying for and have every right to have a social security number. There are many other mixed-status families that are going to have a tougher road for this. Yet, thank God for the voters in Georgia, we're having a conversation. The Democrats are pushing for getting the checks to every single person who should have gotten them. Anyone who has a social security number is eligible.

I also know from people that work across the federal government that the Biden administration is trying to get the whole thing working. Part of that working is getting you your social security number so you can file. The Democrats are fighting very hard in this package, the $1.9 trillion, to get mixed-status families, like yours, where you don't have a social security number, your child does, in some cases, a spouse might, to get money to everyone in this country except those with the highest income because you deserve it. We're in this together, this is a universal benefit, it should go to every single person in the United States.

COVID does not care whether you have a social security number or not, you are at risk. Particularly someone who's driving a taxi. You're out among people every day. Democrats are fighting hard for this. I think in your case, keep at it with the social security number. If you haven't gotten it-- You didn't get it last year because you didn't have the number. When you're filing your taxes the next time, you will get that money, the CARES, the $600, and hopefully, the $1400 will get enacted. The IRS will-- It's called a true-up. Hopefully, you can-- [unintelligible 00:29:15]

Brian Lehrer: I think he's talking to somebody else in the background.

Claudia Sahm: Oh, okay. We're pulling for that, and I think with the Democrats having the White House and Congress, this really should happen. It should have happened for you already, but I truly believe it's on the way.

Brian Lehrer: Jude, thank you very much for your call, and good luck to you and your family. Please, call us again. Two quick things, Ms. Sahm, before you go. My guest is economist, Claudia Sahm, who's been a Federal Reserve Board official and is now a contributing opinion writer for The New York Times. One is, can I get your reaction quickly to the $15 minimum wage provision that's in this bill and may fall out of the bill because it is after all a broader policy item that's not just COVID relief, they want to increase the minimum wage.

For people who don't know, by the way, in our listening area, New York, New Jersey, and Connecticut, the minimum wage at the state level is so much higher than the federal minimum wage. In a lot of the country, they actually pay the federal minimum wage. They're nowhere near our area's $15 an hour. The federal minimum wage, if you don't know folks, is $7.25 cents, which you can not work 40 hours on and not be in poverty, let's face it. You'll still be drawing, federal benefits, for example.

Ms. Sahm, I have a feeling that I know the answer to whether you support a $15 federal minimum wage, but maybe I'm wrong, and do you support it being in this bill?

Claudia Sahm: First on the minimum wage, what I absolutely support is making sure that every single person who wants to work in this country works at a living wage, and that families, in general, are supported so that they can live with dignity and be able to pursue whatever dreams they have for themselves and their kids. I think the minimum wage could absolutely fit within that. I can't go it alone. Policy really is strongest when you have different programs together.

The reality is if the minimum wage is raised to $15, particularly in parts of the country where this would like, you know what I mean? You're more than doubling what employers are paying, the reality is some people are going to get laid off just because the business- but a lot of millions of people will make more money, right? That's huge to families. Then you have to think about, okay, there are some people that this could hurt, so what else can we do to help them?

It's being really honest about it's not just one thing we do. We need to do multiple policies together and that's why I think the reality, and I'm not sitting in Congress, so I don't know this, but I think the reality is the minimum wage will probably not go through in this package just for a lot of technical reasons. It doesn't affect the budget that much, the federal budget, but I absolutely could see the minimum wage or some policy like that, that again, gets to this priority of getting people in a living wage. You shouldn't be below poverty and working full time. That to me is part of this infrastructure package because it's about investing in people.

There's going to be a really robust debate about exactly how we accomplish that goal. It's going to be messy and are we going to like it, but just that it's on the table and we are going to have a robust discussion about it is important.

Brian Lehrer: At least a more robust discussion now that Democrats control Congress and the White House.

Claudia Sahm: Yes.

Brian Lehrer: Last question. In December, you wrote a column called The Relief Bill's Biggest Blind Spot That was about the last relief bill. How quickly we forget because time is so compressed these days it feels like, with all the news that takes place, but that last relief bill passed in December and it's lack of housing relief. Can you go into a little bit of detail about what was missing in our last minute?

Claudia Sahm: I still think that housing, both people that haven't been able to pay their rent or haven't been able to keep paying their mortgage, this is a potential ticking time bomb. This is something that I'm sure is affecting many listeners in your area because New York City's got high housing costs. I applaud the fact that the eviction moratoriums, you don't have to pay back federal mortgage. You get a break from paying that, that's really important, but those debts have not been forgiven.

The government needs to develop a plan, and they've been real busy with other, like putting out the fire, but they have to develop a plan so that we make sure that renters and homeowners pay back, if they haven't been able to already, pay back that in a way that doesn't crush them. We can't do like we did after the housing crisis, after the great recession, and leave it to banks and mortgage servicers to figure out what was good for families, right? The government needs to lead on that and they need to put very clear guidelines and make sure that it's done right.

Like I said, I don't think that conversation is really happening, especially not in public and in a way that we can talk to people out there and exactly know what they need to get-- [crosstalk]

Brian Lehrer: We're going to take it on in more detail in our next segment, as a matter of fact, but is it in the new bill as you see it?

Claudia Sahm: What you keep seeing in the relief package is extensions of the eviction moratoriums and giving people longer where they don't have to pay their mortgages. This has also shown up in student loan debt. You don't have to pay the federal loans. Now, like with student loans, we know there's a big debate about just canceling the loans. I think there's going to, there will have to be a real discussion about the rent that hasn't been paid, the mortgage payments that haven't come in. It's not alive.

Right now, they just got to keep pushing it out so people don't get thrown out of their homes and their apartments, but there's a whole set of issues that are tied to housing and that's why I flagged it in The Times. I want people to be thinking about, well, how are we going to clean up this mess?

Brian Lehrer: Claudia Sahm, former federal Reserve Board section chief, now a New York Times contributing opinion writer. Thank you so much for coming on with us and talking all this through.

Claudia Sahm: Thank you.

 

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