[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]





 
                      PAYCHECK SECURITY: ECONOMIC
                      PERSPECTIVES ON ALTERNATIVE
                        APPROACHES TO PROTECTING
                      WORKERS' PAY DURING COVID-19

=======================================================================

                            VIRTUAL HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON NATIONAL SECURITY,
                     INTERNATIONAL DEVELOPMENT AND
                            MONETARY POLICY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              JULY 7, 2020

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 116-100
                           
                           
                           
                           
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
 
 
 
 
                          ______                       
 
 
              U.S. GOVERNMENT PUBLISHING OFFICE 
43-193 PDF            WASHINGTON : 2021 
 
 
                          
                           
                           

                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 MAXINE WATERS, California, Chairwoman

CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina, 
NYDIA M. VELAZQUEZ, New York             Ranking Member
BRAD SHERMAN, California             ANN WAGNER, Missouri
GREGORY W. MEEKS, New York           FRANK D. LUCAS, Oklahoma
WM. LACY CLAY, Missouri              BILL POSEY, Florida
DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas                      BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri            STEVE STIVERS, Ohio
ED PERLMUTTER, Colorado              ANDY BARR, Kentucky
JIM A. HIMES, Connecticut            SCOTT TIPTON, Colorado
BILL FOSTER, Illinois                ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio                   FRENCH HILL, Arkansas
DENNY HECK, Washington               TOM EMMER, Minnesota
JUAN VARGAS, California              LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey          BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas              ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida                   WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam            TED BUDD, North Carolina
RASHIDA TLAIB, Michigan              DAVID KUSTOFF, Tennessee
KATIE PORTER, California             TREY HOLLINGSWORTH, Indiana
CINDY AXNE, Iowa                     ANTHONY GONZALEZ, Ohio
SEAN CASTEN, Illinois                JOHN ROSE, Tennessee
AYANNA PRESSLEY, Massachusetts       BRYAN STEIL, Wisconsin
BEN McADAMS, Utah                    LANCE GOODEN, Texas
ALEXANDRIA OCASIO-CORTEZ, New York   DENVER RIGGLEMAN, Virginia
JENNIFER WEXTON, Virginia            WILLIAM TIMMONS, South Carolina
STEPHEN F. LYNCH, Massachusetts      VAN TAYLOR, Texas
TULSI GABBARD, Hawaii
ALMA ADAMS, North Carolina
MADELEINE DEAN, Pennsylvania
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
DEAN PHILLIPS, Minnesota

                   Charla Ouertatani, Staff Director
           Subcommittee on National Security, International 
                    Development and Monetary Policy

                  EMANUEL CLEAVER, Missouri, Chairman

ED PERLMUTTER, Colorado              FRENCH HILL, Arkansas, Ranking 
JIM A. HIMES, Connecticut                Member
DENNY HECK, Washington               FRANK D. LUCAS, Oklahoma
BRAD SHERMAN, California             ROGER WILLIAMS, Texas
JUAN VARGAS, California              TOM EMMER, Minnesota
JOSH GOTTHEIMER, New Jersey          ANTHONY GONZALEZ, Ohio
MICHAEL SAN NICOLAS, Guam            JOHN ROSE, Tennessee
BEN McADAMS, Utah                    DENVER RIGGLEMAN, Virginia, Vice 
JENNIFER WEXTON, Virginia                Ranking Member
STEPHEN F. LYNCH, Massachusetts      WILLIAM TIMMONS, South Carolina
TULSI GABBARD, Hawaii                VAN TAYLOR, Texas
JESUS ``CHUY'' GARCIA, Illinois
KATIE PORTER, California
SYLVIA GARCIA, Texas

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    July 7, 2020.................................................     1
Appendix:
    July 7, 2020.................................................    37

                               WITNESSES
                         Tuesday, July 7, 2020

Cook, Lisa D., Professor, Department of Economics, James Madison 
  College, Michigan State University.............................     6
Garcia, Lily Eskelsen, President, National Education Association 
  (NEA)..........................................................     7
Stiglitz, Joseph, Professor of Economics, Columbia University....     9
Zuluaga, Diego, Associate Director, Financial Regulation Studies, 
  Cato Institute.................................................    11

                                APPENDIX

Prepared statements:
    Cook, Lisa D.................................................    38
    Garcia, Lily Eskelsen........................................    42
    Stiglitz, Joseph.............................................    46
    Zuluaga, Diego...............................................    51

              Additional Material Submitted for the Record

Cleaver, Hon. Emanuel:
    Written statement of Hon. Pramila Jayapal, a Representative 
      in Congress from the State of Washington...................    53
    Letter and attachment from the National Women's Law Center 
      (NWLC).....................................................    56
Garcia, Hon. Sylvia:
    April 29, 2020, sign-on letter to Speaker Pelosi and 
      Democratic Leader Schumer..................................    62
    April 29, 2020, letter urging Congress to pass the Paycheck 
      Guarantee Act, from the Economic Policy Institute and 100 
      economists.................................................    65
Porter, Hon. Katie:
    April 29, 2020, sign-on letter to Speaker Pelosi and 
      Democratic Leader Schumer..................................    62
    Op-ed by Mark Zandi..........................................    71


                      PAYCHECK SECURITY: ECONOMIC

                      PERSPECTIVES ON ALTERNATIVE

                        APPROACHES TO PROTECTING

                      WORKERS' PAY DURING COVID-19

                              ----------                              


                         Tuesday, July 7, 2020

             U.S. House of Representatives,
                 Subcommittee on National Security,
                          International Development
                               and Monetary Policy,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 12:08 p.m., 
via Webex, Hon. Emanuel Cleaver [chairman of the subcommittee] 
presiding.
    Members present: Representatives Cleaver, Perlmutter, 
Himes, Sherman, Vargas, Gottheimer, San Nicolas, Wexton, Garcia 
of Illinois, Porter, Garcia of Texas; Hill, Williams, Emmer, 
Gonzalez of Ohio, Timmons, and Taylor.
    Ex officio present: Representative McHenry.
    Chairman Cleaver. The Subcommittee on National Security, 
International Development and Monetary Policy will come to 
order.
    First, I want to thank you, Clem. I appreciate all of the 
work that you and Petrina have done to make this hearing and 
many other hearings possible. We couldn't do it without both of 
you.
    The subcommittee is now in order. Without objection, the 
Chair is authorized to declare a recess of the subcommittee at 
any time. Also, without objection, members of the full 
Financial Services Committee who are not members of this 
subcommittee are authorized to participate in today's hearing.
    Members are reminded to keep their video function on at all 
times, even when they are not being recognized by the Chair. 
Members are also reminded that they are responsible for muting 
and unmuting themselves, and to mute themselves after they are 
finished speaking.
    Consistent with the regulations accompanying H. Res. 965, 
staff will only mute Members and witnesses as appropriate when 
not being recognized by the Chair to avoid inadvertent 
background noise. Members are reminded that all rules relating 
to order and decorum apply to this remote hearing.
    Today's hearing is entitled, ``Paycheck Security: Economic 
Perspectives on Alternative Approaches to Protecting Workers' 
Pay During COVID-19.''
    I now recognize myself for 4 minutes for an opening 
statement.
    In February, before a pandemic was declared and the 
economic livelihood of Americans was placed in peril, I sent a 
letter, asking the White House, the Treasury Department, and 
the Federal Reserve how they planned to prevent a crisis from 
occurring due to COVID-19. I asked them what their strategy was 
to help protect American's health and the national economy.
    It would be months until that letter that I wrote with 
Chairmen Meeks, Green, and Clay would receive a response. 
Unfortunately, by that time it was clear, at least to me, that 
there was no plan. Because we did not plan, we have become a 
part of the virus' plan.
    Congress was forced to take unprecedented steps to rescue 
our economy and provide emergency assistance to American 
families and front-line workers through the Coronavirus Aid, 
Relief, and Economic Security (CARES) Act. We provided nearly 
every American money to feed their families. We rushed 
resources for COVID-19 testing and personal protective 
equipment (PPE) to hospitals. We created the Paycheck 
Protection Program (PPP) as a short-term lifeline to keep small 
businesses alive and their employees on the payroll.
    Just last week, we heard from Fed Chairman Powell that the 
CARES Act was able to, ``provide direct help to people, 
businesses, and communities,'' and ``made a critical 
difference.'' It prevented the kind of mass layoffs and 
evictions that threatened millions and millions of Americans.
    Despite that significant bill, it has become profoundly 
clear that our initial response will not be enough and was not 
administered the way we intended. The U.S. has suffered the 
largest increase in unemployment of any major economy on the 
planet.
    The unemployment rate was over 13 percent in May, more than 
16 percent after accounting for various measurement issues, and 
closer to 20 percent when workers with reduced hours are 
included.
    Additionally, the clock is ticking on the expiration of 
many provisions of the CARES Act, as economists and public 
health experts are telling us that the outlook is getting 
worse. This week, a report written by Moody's Chief Economist 
Mark Zandi highlighted that the prospects are high that we will 
suffer what may well be considered an economic depression.
    His analysis leverages Federal Reserve and Congressional 
Budget Office's research that initially assumed that COVID-19 
would be tapering off and double-digit unemployment would 
persist into next year. However, with a resurgence of COVID-19 
around the United States, in Florida, Texas, Georgia, and my 
home State of Missouri, businesses are being forced to shutter 
again, driving a possible second round of economic catastrophe.
    Throughout the course of this crisis, both the economic and 
health consequences of COVID-19 have fallen disproportionately 
on low- and middle-income families and communities of color. 
The Inspector General for the Small Business Administration 
(SBA) highlighted that the CARES Act required rural minority- 
and women-owned businesses to be prioritized for PPP loans, but 
based on their analysis, they were not. By mid-April, 440,000 
Black business owners had shuttered their company for good, a 
41 percent plunge. By comparison, 17 percent of White-owned 
businesses closed during that same period.
    The New York Times successfully sued the CDC to release the 
COVID-19 information, based on ethnicity and race, and learned 
last week that Blacks and Latinos were 3 times more likely to 
be infected with COVID-19 and twice as likely to die.
    When you combine these facts with data from the Brookings 
Institution, that low-income communities of color are more 
likely to serve as essential front-line workers with higher 
rates of exposure, this second dangerous wave could be 
cataclysmic for the working poor in our country.
    The remedy that Mark Zandi prescribed in his report, which 
is echoed by the Federal Reserve Chairman, many of our 
witnesses today, and even by President Trump, is simple: There 
is a need for more congressional action that places employees 
first.
    The Health and Economic Recovery Omnibus Emergency 
Solutions (HEROES) Act, which passed the House in May and is 
waiting in the Senate, would go a long way in preventing the 
kind of catastrophe that leading economists are predicting.
    Further, a bill sponsored by my friend, Congresswoman 
Jayapal, the Paycheck Recovery Act of 2020, would go a long way 
in aiding those who need it most. Congresswoman Jayapal has 
offered a statement, which I would like to enter into the 
record.
    Without objection, it is so ordered.
    I will now recognize the ranking member of the full 
Financial Services Committee, Ranking Member McHenry, for 5 
minutes.
    Mr. McHenry. Thank you for the recognition. My 
understanding was, it would be for a shorter period of time, 
but I will thank you for yielding. And first, let me say thank 
you for yielding, and thank you for being a good leader of this 
subcommittee.
    The frustrating part is to listen to the opening statement, 
and to recognize that this serves as a legislative hearing on a 
bill that represents what is absolutely wrong with this 
Congress' and some of my Democrat colleagues' responses to 
COVID-19. They want to be hyper-partisan rather than trying to 
remake the bipartisan success of the CARES Act. Rather than 
coordinate between the House and the Senate and the White 
House, what they want to do is just up the ante because they 
view it as good politics.
    And I have to tell you, responding to the American people's 
concerns is the best way for us to be good stewards of the 
taxpayers and also good stewards of our constituents. Through 
the bipartisan success of the CARES Act, we have deployed rapid 
support to our fellow Americans. The Administration has done a 
great job of implementing it, and we have portions of America 
that are reopening. We still have enormous challenges ahead, 
and that is the reason why we should continue our bipartisan 
work.
    Instead, we are here today considering a partisan COVID-
response bill by a far-left progressive Member that seeks to 
hold American workers and employees hostage unless they consent 
to a laundry list of unpopular social mandates from the far-
left wing.
    The bill that this hearing is about was so far to the left 
that it wasn't even part of that left-wing package called the 
HEROES Act that a couple of Democrats weren't even willing to 
go along with that partisan approach.
    This bill is nothing more than protecting Democrats' left 
flanks, and instead, we should get serious about crafting 
legislation that will get the American people back to work and 
grow our economy, not codify a partisan wish list.
    So, it is quite frustrating, as a policymaker, that we are 
wasting this subcommittee's time by having a hearing like this, 
when we should be crafting and working through the things that 
will have a very good impact and get people back to work, and 
keep people safe and healthy. I think that should be our focus, 
rather than really a laundry list of left-wing ideas that this 
bill--that this hearing is about.
    Let's stay focused on getting the American people back to 
work. Let's not focus on social mandates and extraneous 
partisan measures, and let's get back to the work that the 
American people want us focused on. With that, I yield back.
    Chairman Cleaver. Thank you, Mr. McHenry. I did yield you 
too much time, not that you used it all. So, I apologize that 
we didn't present you with less time. But nonetheless, we will 
now go to the ranking member of the subcommittee, Mr. Hill.
    Mr. Hill. Thank you, Chairman Cleaver. I appreciate you 
convening this virtual hearing, and I appreciate this 
distinguished list of witnesses for their expertise. Today, we 
are discussing the paycheck security topic with a specific 
focus on H.R. 6918, the Paycheck Recovery Act of 2020, 
sponsored by Representative Jayapal, which would require the 
Treasury Secretary to provide grants to small businesses that 
have been impacted by COVID-19.
    Before making my comments on the legislation, I, too, want 
to make some procedural comments. This legislation should not 
be moving through this committee, let alone this subcommittee. 
The essence of this bill is to create a grant Paycheck 
Protection Program for small businesses, which implies that the 
Small Business Committee should be managing this effort.
    I understand the bill was referred to our committee because 
it involves the Treasury. However, we are using our very 
limited subcommittee time to discuss a partisan bill, sponsored 
by a Member who is not on this committee. It is just 
disappointing that there are plenty of bipartisan bills that we 
should notice and have influence over our direct work in 
international institutions, sanctions, and monetary policy.
    Now, let me turn my attention to the topic of the hearing 
at hand. The Federal Government responded to COVID-19 by 
authorizing nearly $2 trillion of direct spending, 65 percent 
of what we spend in a full year, including $454 billion to the 
Treasury's Exchange Stabilization Fund, which can be leveraged 
up to 10 times. Therefore, we have nearly $7 trillion, Mr. 
Chairman, of resources available to help get our economy back 
to full capacity, as we fight this virus, almost 35 percent of 
GDP.
    All that said, the money is still flowing, and before we 
start creating new programs, we ought to assess the current 
programs that we have and the amount of money that we have 
gotten out into the economy.
    H.R. 6918 would create a program at Treasury to provide 
grants to small businesses. As a former Treasury official, I 
have long opposed Treasury becoming just another program agency 
in the Cabinet. And if we have learned anything about the CARES 
Act that we passed, it is that the Government is not always 
well-equipped to carry out programs on a broad-based scale. 
Look at the PPP program, how it is operated, versus the 
Economic Injury Disaster Loan Program.
    Using the banks, the PPP program, while not perfect, got 
over $500 billion of assistance out to our small businesses, 
preserving millions of jobs in just a month, whereas the 
Economic Disaster Loan Program still suffers from a 
bureaucratic approach that is limited in its effectiveness.
    The PPP program, Mr. Chairman, has $134 billion of 
available funding. Let's focus on improving that program to 
help our small businesses over the weeks to come, and let's fix 
the idle program in the right way.
    Further, I would like to mention the role that State and 
local governments play. Our State of Arkansas used CARES Act 
funding to set up its own program for small businesses, the 
Arkansas Ready for Business Grant Program. It received over 
2,300 applicants within 1 hour, and helped over 200,000 
Arkansas employees across the State stay at work. Ninety-four 
percent of those businesses had 50 employees or less, and a 
quarter were minority-owned and women-owned.
    So, Mr. Chairman, I think we have the solutions here to 
help our small businesses and provide guidance to our State and 
local governments, and let's fix the idle program and the PPP 
program so that more small businesses can be helped as we 
continue to fight this terrible virus across our country. Thank 
you for the time, and I yield back the balance of my time.
    Chairman Cleaver. Thank you, Mr. Hill.
    And I want to apologize again for the mismanagement of the 
time early on with you and Mr. McHenry.
    Today, we welcome the testimony of Ms. Lisa Cook, Ms. Lily 
Eskelsen Garcia, Mr. Joseph Stiglitz, and Mr. Diego Zuluaga.
    First, Ms. Cook is a professor of economics and 
international relations at Michigan State University, and is a 
member of the American Economic Association's executive 
committee.
    Previously, she served as a Senior Economist on the Obama 
Administration's Council of Economic Advisers. As an authority 
on international economics, she has also advised policymakers 
from the Nigerian and Rwandan governments. Thank you for 
appearing before this committee.
    Second, Ms. Eskelsen Garcia is the president of the 
National Education Association (NEA), the largest union in the 
United States. Prior to holding this position, she served as 
the NEA's secretary treasurer and vice president. A life-long 
educator and advocate, Ms. Garcia served as a member of the 
Clinton Administration's White House strategy session on 
improving Hispanic education, and was named a member of the 
President's Advisory Commission on Educational Excellence for 
Hispanics. Thank you for appearing before the committee.
    Third, Mr. Stiglitz is an economist and professor at 
Columbia University. He was the chief economist of the World 
Bank, and Chair of President Clinton's Council on Economic 
Advisers. He is the founder of the Initiative for Policy 
Dialogue, a think tank on international development, and he is 
a recipient of the Nobel Memorial Prize in Economic Sciences, 
and the prestigious John Bates Clark Medal. Thank you for 
appearing.
    And finally, Mr. Zuluaga is the associate director of 
financial regulation studies at the Cato Institute's Center for 
Monetary and Financial Alternatives. Prior to holding this 
position, he was the head of financial services and tech policy 
at the Institute of Economic Affairs in London.
    He has written on a variety of financial regulatory topics, 
and his work has been featured in a number of reputable media 
publications. Thank you for appearing before this committee.
    Witnesses are reminded that your oral testimony will be 
limited to 5 minutes. A chime will go off at the end of your 
time, and I would ask that you respect the Members' and other 
witnesses' time by wrapping up your oral testimony as quickly 
as possible. And without objection, your written statements 
will be made a part of the record.
    Ms. Cook, you are now recognized for 5 minutes to give an 
oral presentation of your testimony.

STATEMENT OF LISA D. COOK, PROFESSOR, DEPARTMENT OF ECONOMICS, 
        JAMES MADISON COLLEGE, MICHIGAN STATE UNIVERSITY

    Ms. Cook. Thank you, Chairman Cleaver, Ranking Member Hill, 
and members of the Subcommittee on National Security, 
International Development and Monetary Policy. The coronavirus 
pandemic and the resulting human, economic, and financial 
crises are unfolding at breakneck speed. Nonetheless, the rent 
and bills of Americans were and are still due.
    The quick action of Congress has gone a considerable way to 
lessen or postpone the pain associated with this pandemic-
induced recession, specifically, these measures: adding $600 
per week to unemployment checks; providing assistance to small 
businesses through the PPP; and giving Americans a direct 
payment of $1,200.
    With an unemployment rate of 11 percent, we have now 
entered the history books with the second highest unemployment 
rate than at any other time since 1940. The unemployment rate 
for African Americans is 15.4 percent, and for Hispanic 
Americans, it is 14.5 percent.
    These data are especially disturbing because Black and 
Hispanic wealth fell significantly during the Great Recession, 
making it more difficult to weather the COVID recession. By 
early June, 44 percent of adult Latino renters and 41 percent 
of Black renters, compared to 21 percent of White renters, 
reported not being able to pay their rent. Twenty percent of 
rental households face eviction by September 30th.
    A wave of bankruptcies could ensue if small businesses 
cannot stay afloat, renters cannot pay their rent, and 
landlords cannot pay their mortgages. Early evidence shows that 
the direct Federal payments of up to $1,200 per adult and $500 
per child are a critical, first lifeline for many households in 
the U.S. economy, allowing them to purchase food and pay their 
bills.
    To minimize the likelihood that a liquidity crisis for 
these households becomes a bankruptcy crisis for them and for 
the economy, Congress should authorize another round of direct 
payments along with extended unemployment benefits.
    By mid-June, of the businesses that were listed on Yelp, 
140,000 of those closing since March 1st were closed by mid-
June. Thirty-five percent of shopping and retail businesses 
listed had closed their doors permanently. Fifty-three percent 
of restaurants listed had closed their doors permanently. 
Forty-one percent of African-American businesses report being 
closed, compared to 35 percent overall.
    In the only survey providing demographic data on PPP loan 
recipients, a report by Color of Change indicates that 45 
percent of Black and Latino businesses will close by the end of 
the year, without more relief.
    Prior to reopening, States that recovered, that received 
more PPP loans and with more generous unemployment benefits had 
less severe declines and faster recoveries.
    Macroeconomists are expecting a slower recovery. Given that 
consumer spending is 70 percent of GDP, it is clear that more 
and extended help to the American people and small businesses 
will be urgently needed.
    I agree with the economic security project and colleagues 
who signed their letter, that regular, lasting, direct stimulus 
payment would be a critical part of ensuring that the economic 
recovery does not grind to a halt.
    In addition, more aid to State and local governments is 
desperately needed now, to continue to fight the pandemic and 
to prepare for job losses stemming from impending austerity 
budgets being adopted by State and local governments.
    This relief should be directed at healthcare providers, 
community colleges, universities, mental health, and other 
social services, universal broadband, and the arts.
    Any and all relief to the American people should be 
authorized and disbursed with all deliberate speed. Thank you.
    [The prepared statement of Ms. Cook can be found on page 38 
of the appendix.]
    Chairman Cleaver. Thank you very much.
    Ms. Garcia, you are now recognized for 5 minutes.

    STATEMENT OF LILY ESKELSEN GARCIA, PRESIDENT, NATIONAL 
                  EDUCATION ASSOCIATION (NEA)

    Ms. Eskelsen Garcia. Thank you, Chairman Cleaver, Ranking 
Member Hill, and members of the subcommittee. This is an 
important opportunity, and I really appreciate your time.
    My name is Lily Eskelsen Garcia. I am a 6th grade teacher 
from Utah, and I am the current president of the National 
Education Association (NEA).
    And as NEA's president, I am honored to represent more than 
3 million educators, teachers, education support professionals, 
specialized instructional staff, K-12 schools, preschool to 
graduate school, including university and college campuses.
    NEA also represents educators in the Department of Defense 
schools, college students who are planning to become educators, 
those student teachers, retired educators, and public employees 
in local and State Government.
    I am so proud, but I am not the least bit surprised by how 
NEA members have risen to this moment, and demonstrated 
resilience, creativity, and team work, as we have tried to 
cultivate in our students those same characteristics. We have 
been called on to organize car caravans through student 
neighborhoods to deliver a message: Even though our school 
building is closed, we are still learning, and we are still 
here for you.
    We have helped parents who, overnight, had to become their 
kids' substitute teachers, and I have had more than one of my 
members who has cried with me over how worried they are about 
their students, because school was the only stable place in 
their lives.
    And as we speak today, governors and mayors are taking note 
of very steep budget cuts that are going to harm our students. 
This is the result of the pandemic, not someone who didn't plan 
for something no one even knew would come.
    Without Federal assistance, we are going to see massive 
educator layoffs, and that is going to be incredibly harsh, 
especially for those who struggle the most to make ends meet, 
even during normal times, such as our wonderful, amazingly 
devoted, education-support professionals. These are the lunch 
ladies, the school bus drivers, the maintenance staff. Many of 
these workers stayed on the job, putting themselves in harm's 
way to deliver meals to students and families, to drop off work 
packets to students, and to keep our schools sanitized and 
safe.
    According to the Bureau of Labor Statistics, nearly 900,000 
public education jobs have already been lost because of budget 
cuts. By comparison, more than 350,000 education jobs were lost 
due to the Great Recession. In other words, COVID-19 has done 
more damage in 3 months than a recession that lasted for a 
year-and-a-half did.
    If this damage goes unchecked, nearly 2 million educators 
could lose their jobs over the next few years. According to 
NEA's analysis--and we studied the same numbers that school 
boards are receiving all over the country--this could represent 
one-fifth of the entire workforce that powers public schools 
and higher education institutions.
    The COVID-19 recession could be 6 times worse for education 
than the 2008 financial crisis. Our nation now has 1.4 million 
more K-12 students than we had in 2008, but we have 135,000 
fewer educators than we had 12 years ago. These layoffs could 
stem from pandemic-related budget cuts.
    It is just going to worsen an already dire situation. No 
community is going to go unaffected. But the schools in wealthy 
communities are more likely to weather the storm, while schools 
in poorer communities, that are already struggling, might not.
    Job losses in these schools would profoundly affect low-
income students whose schools rely on Title I funding to reduce 
class size, hire specialists, and offer a rich curriculum.
    We know that we are going to need more, and we thank the 
House for taking the bold action to pass the HEROES Act. We 
call on Mitch McConnell in the Senate to please abandon the 
wait-and-see, till-we-get-around-to-it approach. The Senate 
needs to hit the panic button.
    I thank you for your time, and I am happy to answer any 
questions.
    [The prepared statement of Ms. Eskelsen Garcia can be found 
on page 42 of the appendix.]
    Chairman Cleaver. Thank you, Ms. Eskelsen Garcia.
    I now recognize Mr. Stiglitz for 5 minutes.

STATEMENT OF JOSEPH STIGLITZ, PROFESSOR OF ECONOMICS, COLUMBIA 
                           UNIVERSITY

    Mr. Stiglitz. Thank you very much. Sad to say, the U.S. 
response to COVID-19 has been disappointing. We have done a 
much poorer job than other countries, both in maintaining the 
health of our country and that of our economy. And the two are 
related. There will not be a strong recovery until the pandemic 
is brought under control.
    Congress responded to the pandemic with a massive amount of 
assistance. It succeeded in preventing much suffering that 
would have otherwise occurred, but in many ways the programs 
were badly designed and badly implemented, with much of the 
money not going to where it was most needed, and with the 
unemployment rate soaring far higher than elsewhere. This put 
strains on our unemployment insurance system, resulting in many 
of the unemployed not receiving money for weeks and weeks.
    The increase in unemployment is especially inopportune in 
the United States, because so many depend on employer-provided 
health insurance. Losing health coverage in the midst of a 
pandemic is a calamity.
    The program of assistance was predicated on there being a 
short shutdown, in other words, a V-shaped recovery. Such 
beliefs appear now to be utter fantasy. With the pandemic 
continuing the pace, no one thinks that we will be back to 
normal by the end of the month.
    There are a few principles and priorities that should guide 
the next package of assistance. First, because we cannot have a 
healthy economy without a healthy population, health should be 
given priority. While some of your earlier programs did this, 
there were important lacunae.
    It was, for instance, foolish, shortsided, and 
unconscionable not to have ensured that everyone was provided 
with paid sick leave. We don't want people with the disease 
going to work and spreading the disease, but with so many 
Americans living paycheck-to-paycheck, it was inevitable that 
that would happen without paid sick leave.
    As another example, there are likely to be large increases 
in demand for Medicaid. And the States will be suffering large 
losses in tax revenue, as was just pointed out. With States 
having balanced-budget frameworks, only the Federal Government 
can help them meet these needs.
    Second, hysteresis effects are enormous. Bankrupt firms 
don't become unbankrupt when the pandemic is over. Balance 
sheets of households and firms often take a long time to 
recover. That is why you did the right thing in responding 
quickly and massively. But all of these investments in our 
future will be for naught if assistance is not continued so 
long as the pandemic and its economic aftermath persists.
    There is a third powerful force that will depress the 
economy: precautionary behavior. As long as there is 
uncertainty, both about the course of the disease and the 
economy, there will be a reluctance to spend, either by firms 
or households.
    In the previous downturns like that of 2008, we provided 
assurances to workers that there would be extended unemployment 
insurance so long as the unemployment rate remained elevated. 
We need to do that now, and we have to provide similar 
assistance assurances for all of the other critical assistance 
that we provided.
    We also need to provide income-contingent loans, where 
repayment and the duration of the loan automatically adjust to 
the circumstance of the economy and the firm, providing an 
automatic stabilizer to the economy. Thus, there must be a 
commitment, in the famous words of Mario Draghi, to do, 
``whatever it takes.''
    But at the same time, we must spend our money well, which 
is why the design of the program is so important. As I wrote in 
my Roosevelt Institute Policy Brief in April, even before the 
passage of the CARES Act, the alternative approach of direct 
payments to employers to retain workers seemed more likely to 
be more effective than the disparate programs included in that 
bill.
    The evidence over the last few weeks seems consistent with 
those expectations, and the evidence since then, both in those 
countries around the world that adopted these programs--and let 
me emphasize, these are not left-wing countries that adopted 
programs similar to H.R. 6918, the bipartisan Paycheck Recovery 
Act--and the United States, which took an alternative course, 
strongly reinforce the conclusion I had reached at that time.
    Both the forecast that additional funding would be needed, 
and that the PPP program would not be as effective as had been 
hoped have unfortunately been more than fully realized.
    I went on to argue that the Paycheck Recovery Program 
represents a significant improvement over the existing PPP. It 
is simpler to administer, with more of the money going to where 
it is needed, and considerably less costly and more effective.
    Some will say, yes, we should have adopted the Paycheck 
Guarantee Program, but that is water over the dam. It is now 
too late. That argument might have had some validity if, as 
thought at the time these measures were adopted, the pandemic 
had been of short duration. But since then, it has flared up, 
and there is a good chance that it will be with us for a long 
time.
    As I have already said, we will need to maintain some kind 
of support, and this program is the best way forward. Among the 
virtues of the program I cited is its transparency, its 
administerability, its comprehensiveness, its power to get the 
money where it is needed, in prescribing important links 
between workers and employers, its ability to deliver money in 
a timely way, and its role as an automatic stabilizer.
    I want to conclude with two more general comments. First, 
our assistance to the economy has to be far more comprehensive. 
There were some important sectors that did not receive the 
assistance they needed.
    One sector is States and localities. I already referred to 
the severe budgetary constraints that they faced. These 
authorities are responsible for many of the services on which 
so many of our citizens depend, including education--which has 
been discussed--and health and welfare.
    But cutbacks in spending will greatly weaken our economy, 
in that the law has multiplier effects. It is austerity from 
below. In previous downturns, we have seen the devastating 
macroeconomic effects. Already, layoffs of government workers 
are among the large sources of increasing unemployment. We will 
not have a robust recovery without adequate support for this 
vital sector of our economy. One of the virtues of the Paycheck 
Recovery Act is that it allows States and localities to access 
grants.
    Second, our aspirations to not be in recovery in which some 
time, some say in 2022, when we get back to where we were in 
late 2019, we simply pick up where we left off. Never has 
government played such a role in economy, not even in the 
Great--
    Chairman Cleaver. Mr. Stiglitz?
    Mr. Stiglitz. --Recession. Citizens have the right--
    Chairman Cleaver. Your time has expired Mr. Stiglitz, thank 
you. Thank you very kindly. I appreciate it.
    [The prepared statement of Mr. Stiglitz can be found on 
page 46 of the appendix.]
    Chairman Cleaver. Mr. Zuluaga, you are now recognized for 5 
minutes.

  STATEMENT OF DIEGO ZULUAGA, ASSOCIATE DIRECTOR OF FINANCIAL 
               REGULATION STUDIES, CATO INSTITUTE

    Mr. Zuluaga. Chairman Cleaver, Ranking Member Hill, and 
members of the subcommittee, thank you for the opportunity to 
testify before you today. My name is Diego Zuluaga, and I am 
the associate director of financial regulation studies at the 
Cato Institute.
    America's 30.7 million small businesses have taken a very 
severe hit from the COVID-19 pandemic. The share of small 
businesses reporting that the health emergency has had a large 
negative effect on them was 37.7 percent in late June, down 
just 14 percentage points from 8 weeks earlier.
    Another survey found in April that 1.8 percent of small 
businesses have permanently closed because of the pandemic 
which, if true, would mean that more than 550,000 firms are 
gone forever.
    Yet economic activity and employment are so far recovering 
faster than many expected. Early action to support small 
businesses through the Paycheck Protection Program has helped. 
According to my estimates, around 77 percent of small 
businesses with employees had gotten a PPP loan by June 30th.
    And while the proportion of employing small businesses with 
a PPP loan varies considerably across States, nowhere is it 
below 60 percent. By allowing millions of small businesses to 
keep paying their workers, as well as utility and rent bills, 
the Paycheck Protection Program has prevented a greater 
destruction of livelihoods and valuable business relationships 
than has actually happened.
    It doesn't follow, however, that a program of grants, based 
on lost revenue, will assist the recovery. I believe, on the 
contrary, that it will hinder the recovery by delaying 
businesses' necessary adaptation to changing consumer demand.
    The pandemic has not just caused all sorts of businesses to 
suffer losses. It it has also led to permanent changes in 
economic activity, mainly because production processes and 
consumer preferences have shifted in response to new health 
risks.
    Restaurants are cooking more meals for take-away and 
outdoor consumption. More retail activity is moving online, as 
are larger transactions such as home purchases. These changes 
are unavoidable and permanent.
    Any recession involves the reallocation of workers across 
firms and industries. But because of the pandemic's wide-
ranging consequences, recovery from the present recession will 
likely involve a larger redeployment of workers and capital 
than previous downturns.
    Attempting to freeze America's productive structure in its 
pre-COVID-19 state will, therefore, only delay the return to 
full employment and steady growth. The bounce-back will be 
swifter, on the other hand, the more quickly businesses adapt 
to the new conditions.
    I don't at all mean to suggest that government policy can't 
play any additional valuable role, but it can best do so by 
removing barriers to geographic mobility and business 
investment.
    Instead of rigid support programs that impede mobility and 
risk prolonging financial insecurity, workers need flexible 
support in the face of uncertain economic conditions. A program 
of direct grants to cash-strapped households, whether or not 
their members are employed, would address paycheck insecurity 
while preserving the incentive to adapt to the post-pandemic 
economy.
    A conditional grant program, on the other hand, would tie 
up capital and labor in firms whose long-term viability is far 
from assured.
    Besides delaying adaptation, conditional grant programs are 
costly to administer, as officials must verify applicants' 
declarations and monitor the use of funds.
    These programs also raise fairness concerns. Why should 
laid-off employees, who find new work, not be entitled to a 
reward, whereas those lucky enough to keep their job, get a 
bonus? Why should taxpayers support businesses while the 
national unemployment rate remains above the threshold but not 
thereafter?
    The macroeconomic arguments about supporting demand are 
unpersuasive since direct, unconditional cash grants would have 
at least the same effect on demand, for two reasons. First, a 
larger share of available funds would go to recipients instead 
of program administrators.
    And second, because grant funds would go to the least well-
off, regardless of employment status, and the least will have 
consumed more of their disposable income, the immediate impact 
on aggregate demand might be greater.
    Congressional action, to support the solvency of small 
businesses in the most dire weeks of the pandemic, has enabled 
a speedier recovery than many expected. Now, the goal should be 
to encourage adaptation so American workers and businesses can 
resume productive activity.
    Achieving this goal will require their ingenuity, on which 
we can count, but also flexible, change-friendly support from 
policymakers.
    Thank you. I will be happy to answer your questions.
    [The prepared statement of Mr Zuluaga can be found on page 
51 of the appendix.]
    Chairman Cleaver. Thank you very much. I will now recognize 
myself for 5 minutes for questions.
    This morning, I woke up to the news that Mexico is now 
closing some of its borders to the United States because we are 
losing this battle with COVID-19, and apparently we are losing 
worse than anybody else. If we believe we are losing and it is 
okay, then we will never win.
    But I am troubled by what I am seeing and reading, and it 
is probably a little embarrassing--it should be to the whole 
country--but The New York Times headlines yesterday read, 
``European Workers Draw Paychecks and American Workers Scrounge 
for Food.''
    Dr. Stiglitz, you are a renowned economist and former chief 
economist, and you have had some outspoken comments on this 
whole issue of COVID-19 and the crisis that it has created for 
the United States, and comparing them to others.
    Do you believe that Mark Zandi's report assessment that the 
prospects are higher that we may suffer from an economic 
depression? What is your analysis of his analysis?
    Mr. Stiglitz. Yes. I am very concerned. The fact, as I said 
in my testimony, is that we are not getting a V-shaped 
recovery. And even moderate economists, like the Chairman of 
the Federal Reserve, do not think we are going to be back to 
where we were at the end of 2019, until sometime in 2022, if we 
do everything right.
    And if we don't do things right, if we follow Herbert 
Hoover and don't provide the assistance the economy needs, then 
we are setting ourselves up for another depression, for a 
severe economic downturn.
    Chairman Cleaver. Thank you. Somebody said that, now I 
guess Mexico will build a wall to protect itself from us, so I 
guess something good can come out of something bad.
    But I would like to know, Ms. Eskelsen Garcia, what is 
going on with educators? How are they faring in this COVID-19 
world? What kind of difficulties are they experiencing and what 
are the prospects of opening schools in September in the 
current atmosphere?
    Ms. Eskelsen Garcia. You can't see the back of our head. We 
have been pulling our hair out for, like, 4 months now, and we 
are so frustrated. We love our students. I am a 6th grade 
teacher. I had 39 kids in my room--39--12-year-olds one year. 
That was not healthy on the best day of the year, but we have 
millions now facing overcrowded classrooms, trying to figure 
out how do you make that work coming back in the fall.
    When they told us to leave the building, it was like 
someone pulled the fire alarm. Everybody grabbed what they 
could, and ran out, and the next day, we were trying to figure 
out how we could deliver--to 52 million public school 
students--reading, writing, and arithmetic online. It has been 
incredibly challenging.
    Under the best of circumstances, it is frustrating. That is 
when you have Wi-Fi in the home, and mom and dad have a laptop 
or a tablet, and it is just kind of annoying. But it can be 
alarming when you get into communities of poverty, where the 
only technology in some homes was mom's telephone, and she took 
it with her to work, because she stocked shelves in a grocery 
store, and the kids didn't even have adult supervision in their 
home.
    And so our members, these are America's educators, have 
said, we raced out and had to make up things and do the best we 
could to have a meaningful, educational experience for our 
students.
    But now they are alarmed because they see politicians--I 
know I am talking to some politicians here--but they see people 
who are making decisions to race back into that school without 
the proper plan to distance, to disinfect, to have the PPE, to 
have the health checks and the COVID testing. And it is like, 
no, no, no, we have to warehouse those kids, put those 39 kids 
back into my classroom and don't worry, don't worry that 
somehow they will be at risk, or put their own families at 
risk, put their teachers and the lunch lady and the janitor at 
risk. And so--
    Chairman Cleaver. Thank you.
    Ms. Eskelsen Garcia. --we are scared. We are scared.
    Chairman Cleaver. Yes, understandably so. Thank you very 
much.
    The Chair now recognizes the ranking member of the 
subcommittee, Mr. Hill, for 5 minutes.
    Mr. Hill. Thank you, Mr. Chairman. I appreciate it. This is 
a very interesting discussion.
    Mr. Zuluaga, would you tell me what you think, having 
watched the PPP program put out $500 billion into the economy, 
helping millions of people stay employed--here in Arkansas, it 
was $3 billion--three and a half billion dollars for about 
40,000 businesses. We have $134 billion left in that program.
    With work in the House and work in the Senate, we extended 
that date now to August 8th, which I want to thank Marco Rubio 
for his leadership, and thank my friends in the House for not 
blocking that earlier in the week, last week.
    What should we change in that program to make it more 
helpful to people who are still fighting various shutdown 
issues in some States, while others are doing better? What 
should we change in that program?
    Mr. Zuluaga. I think additional flexibility, in terms of 
the timing within which the funds can be spent would be quite 
helpful, as would probably adjusting the percentages that may 
be allocated to the different types of expenses authorized.
    Increasingly, it seems that it is going to take longer for 
the pandemic to get resolved, and maybe the timing is different 
in different States, and as a result of that, it would be 
useful to give funds that, for example, help businesses change 
their premises to become safer for what is to come over the 
next few months, at least before we have a vaccine.
    In addition to that, I would say that what is left of the 
PPP is about proportional to the share of employing small 
businesses that haven't gotten a PPP loan just yet. There is 
still funding available, and I think that program has worked 
well so far.
    Mr. Hill. If a business was still significantly down 
because they are in a hotspot and in trouble, and say revenues 
are still down 50 percent, or something off, would you allow a 
business to go back and get a second PPP loan?
    Mr. Zuluaga. I would. Because I think the key distinction 
here is between a supply shop, something that makes a business 
that is otherwise perfectly viable and has the same customer 
base as it did before, from being able to be in business as a 
result of a new outbreak, or because the second wave or 
something like that, distinguish that from a demand shop, which 
is, the longer this goes on, and the more people change for it, 
the more people decide to move from cities to the suburbs or to 
other parts of the country, the more the changes in demand and 
industrial patterns become permanent. And in that case, 
sustaining existing industrial structure is counterproductive 
because you don't get the adaptation that needs to happen.
    Mr. Hill. And the issue of the $600 of unemployment 
compensation that is on top of the States' existing 
unemployment compensation benefits, Members are really looking 
at how should that be extended or modified before the end of 
the month? This is an important component of the next 
legislative effort that we collectively make, hopefully on a 
bipartisan basis. What are your thoughts about the unemployment 
compensation, the pandemic piece, the $600 extra per week?
    Mr. Zuluaga. I think it is still unclear as to whether 
there is a disincentive effect in raising the unemployment 
benefit in, for example, making the PPP work. Because in some 
places and for some businesses, it became more attractive for 
workers to earn unemployment benefits than to remain and work, 
particularly given the insecurity of going to work in the midst 
of a pandemic.
    So, I think even though it may be well-intentioned to boost 
those incomes, it is probably more helpful to have a direct 
support that is regardless of your employment status, because 
in that case, you don't get those incentive effects.
    And from the analysis I have done of the PPP program so 
far, it seems to be the case that in some States, taking of PPP 
was less, and there was a relationship with those posted 
unemployment benefits.
    Mr. Hill. Yes. Thank you for that.
    Ms. Eskelsen Garcia, I want to thank you for your 
leadership at the NEA. I spent a lot of time talking to my 
teachers, and there is nothing more fun than 6th graders. I 
don't know if I want 39 of them all day, but I want to thank 
you for leading the NEA this year and helping be a constructive 
voice to try to find bipartisan support for what our teachers 
need to go back to the classroom.
    Would you agree, though, that we really need to get kids 
back in school, and that it is better in so many ways? Do you 
agree with that?
    Ms. Eskelsen Garcia. There is no parent, no Republican 
parent, no Democratic parent,who wants their kid in an unsafe 
situation. And so here is the good news--we don't have to do it 
in an unsafe way.
    People keep asking me the question, they will say, okay, 
overcrowded classrooms, we need hand sanitizers, and we need 
PPE, and we need all of these things while we are talking about 
maybe laying off almost 2 million educators. That is 
unimaginable.
    But they said, obviously, we have to talk about whether we 
should close that unsafe school or open that unsafe school. 
Wrong choices. We need to make those schools safe. We need--
    Mr. Hill. Thank you.
    Ms. Eskelsen Garcia. --to make sure we have everything that 
teacher needs and that the parents want to keep those kids 
safe.
    Mr. Hill. Thank you so much. I yield back.
    Chairman Cleaver. Actually, Mr. Hill, if you would like to 
proceed with another question, please feel free to do so. We 
went a bit longer earlier, so you are welcome to go ahead with 
another question if you have one.
    Mr. Hill. I yield back, Mr. Chairman.
    Chairman Cleaver. Okay, thank you.
    Mr. Perlmutter, you are now recognized for 5 minutes.
    Mr. Perlmutter. Thank you, Mr. Chairman.
    And to Mr. Zuluaga, I think you were saying two things, and 
I kind of agreed with both of them, even though they are 
opposite of one another. You said the PPP has generally been 
pretty good, and I would agree, and that it ought to be 
extended and some people ought to get a second loan, and maybe 
I agree with that.
    And I should just let you know that I practiced bankruptcy 
law, business bankruptcy law, for 25 years before I got elected 
to Congress. And what I am worried about is, you say, well, it 
is the demand shock.
    Now, economists have the advantage of hindsight as to what 
the demand shock is. We are seeing unavoidable, permanent 
changes, but you really don't know it for a while.
    So, I am worried that we are going to continue to throw 
good money after bad with respect to a lot of businesses that 
aren't going to make it, no matter what we do.
    I agree with some of your statements, and I appreciate the 
desire to tap into ingenuity and improvisation and innovation. 
That is all right, but we are in an emergency situation right 
now.
    We came through 3 months of hell, and we still have some 
ahead of us. Mr. Stiglitz, you didn't get to finish your 
statement. I want to hear your closing remarks, and then I have 
some questions for Ms. Garcia and Ms. Cook.
    Mr. Stiglitz. Thank you very much for giving me this chance 
to finish. What I wanted to say is that we need to have a 
vision of what kind of economy we want coming out, and agreeing 
with what has been said, there are going to be structural 
changes. We are going to be worried about another pandemic. 
Those are some of the examples. The aviation sector is going to 
be weaker.
    But as we think about providing money, we ought to be 
thinking about, how do we move the economy to the future 
economy? Part of that is, we want to have more of a knowledge 
sector. Our comparative advantage as an economy is our 
technology. It is really what makes it strong.
    And one of the very disturbing aspects of what has happened 
is, we haven't given support to our knowledge sector, to 
education. We heard from Ms. Eskelsen Garcia about how the 
number of teachers has gone down. Our universities are being 
devastated. All of the sources of the revenues are going down.
    The decision yesterday of ICE to make it more difficult for 
foreign students to come to the United States--one of the 
things that has made us strong is having the most talented 
people come to the United States and often stay to study and to 
start up a lot of our new enterprises. We are making that 
extraordinarily difficult. ICE has just made a policy statement 
to encourage them to stay here on their visas.
    So what I wanted to urge is, as you think about spending 
money, have a comprehensive view, making sure that no sector is 
devastated, and that we have a vision of what kind of economy 
that we want emerging in 2022.
    Mr. Perlmutter. Okay. Thank you very much. Ms. Eskelsen 
Garcia, Ms. Cook, my wife is an NEA lifetime retiree, and she 
has been called back 3 times, and she is making a list of 
things that she thinks, as a math teacher in high school, need 
to be done for her to be able to teach and deal with the 
potential hazards of the virus. But she also knows tax revenue 
is way down--State, local, and school districts.
    I will start with Ms. Cook. You were talking about a number 
of things to try to avoid a wave of bankruptcies. I think they 
are coming anyway. But I feel like we really have to support 
our State, local, and school districts, or we are going to hit 
a wall by the end of this summer. How would you react to that?
    And you need to unmute. I still can't hear you, Ms. Cook. I 
am not sure what is going on with your audio.
    Chairman Cleaver. Ms. Cook?
    Mr. Perlmutter. We can talk about it offline.
    I am just worried we are going to hit a brick wall at the 
end of this month. To all of our economists, and to the head of 
the NEA, when the unemployment runs out, when State and local 
school districts are broke, we will have problems and huge 
layoffs, and we are going to have to deal with it. And I will 
yield back to the Chair.
    Chairman Cleaver. Mr. Perlmutter, we had a technical 
problem. Ms. Cook, if you would like to respond to Mr. 
Perlmutter's question, please proceed. I am doing this a little 
bit lax because we are still experimenting with things. So, Ms. 
Cook, please?
    Mr. Perlmutter. And you will need to unmute.
    I am not hearing anything, Mr. Chairman.
    Chairman Cleaver. Ms. Cook, if you can hear me--
    Mr. Perlmutter. There you go.
    Ms. Cook. I absolutely agree with you. We want to avoid the 
problems that we saw in the Great Recession--the fiscal cliff 
that led to so much pain, so much suffering, and so much 
unemployment because State and local governments laid off so 
many people, because we didn't come to help, because Congress 
didn't come to help, because there wasn't enough aid.
    And all of the problems that we are talking about, from the 
schools, to the universities, to community colleges, to the 
arts, and certainly healthcare workers--all of these support 
the economy. This is 70 percent of GDP. It is consumer 
spending.
    All of them need support. And I think it would be foolhardy 
to think that they are adopting austerity budgets, the State 
and local governments that are adopting austerity budgets, that 
they won't follow through. They have a hard budget constraint.
    So, I think that aid has to be quick, it has to be now, and 
this is from learning the lessons of 2008 and 2009. Thank you.
    Mr. Perlmutter. Thank you very much.
    I yield back, Mr. Chairman.
    Chairman Cleaver. Thank you. The Chair now recognizes Mr. 
Williams for 5 minutes.
    Mr. Williams. Thank you, Mr. Chairman. I appreciate your 
bringing everybody together today, and thanks to all of the 
witnesses.
    We saw some promising economic data come out last week, 
with over 4.8 million jobs being added to the economy during 
this month of June. We still have a long way to go before we 
are back to the pre-pandemic levels, but from the data, it 
looks like the economy is bouncing back sooner than many people 
had predicted.
    Unfortunately, the legislation that is attached to this 
hearing today, the Paycheck Recovery Act by Congresswoman 
Jayapal, is not a realistic path forward that would help 
continue this growth trend. The bill contains such a radical 
proposal that they were not even, as we have heard, included in 
the $3 trillion partisan HEROES Act that was passed in May.
    So, Mr. Zuluaga, do you think that drastic new government 
interventions would be the best way to get our economy to 
recover quickly?
    Mr. Zuluaga. I don't think it would help. The thing, I 
think, that we need the most right now is flexibility. We have 
seen from the start of the pandemic that relaxing regulation--
how about, for example, educational licensing, or the practice 
of telemedicine, or where one can purchase different types of 
food and drink, that all of those things are helpful in terms 
of getting the economy moving even in the context of a lot of 
uncertainty about the future.
    And, to the extent that you are introducing new rigidities 
by tying support to one's pre-pandemic employment status, I 
think that can make recovery more difficult, and it can make 
people's financial position more precarious rather than more 
assured.
    Mr. Williams. Okay. We have heard everyone talking about 
the need for another aid package--that is constantly what we 
hear--to come through Congress before August. However, 
Congress, as we have said, has already allocated $2.2 trillion 
from the CARES Act and other bills that we have passed relating 
to the coronavirus, but the Paycheck Protection Plan Program, 
as we know, still has over $130 billion that is currently 
untapped.
    So, again, Mr. Zuluaga, how would or how should Congress be 
looking at the economy to make sure that the industries in most 
need of assistance receive it, while the other money we have 
already injected in the economy makes its way into the system?
    Mr. Zuluaga. I would pay attention to where the need is, 
particularly in terms of local shutdowns of activity or places 
where the pandemic has had a resurgence at the State level. I 
think it is useful because that is an indicator that that 
activity has stopped because of health emergency rather than 
because of the response, the medium-term and longer-term 
responses to the health emergency.
    As you indicated, there is still funding left over in the 
PPP, and I mentioned earlier how additional flexibility in 
terms of how one can spend amounts and so forth could be 
helpful.
    Mr. Williams. Okay. Small business owners, of which I am 
one--I have been a small business owner, still am, for 50 
years--are the engines of job growth of our economy. 
Unfortunately, I have heard from many businesses across Texas 
that they are concerned that they are going to be sued if they 
attempt to reopen and some individuals get the coronavirus, 
even if they follow all of the State and local and Federal 
safety guidelines.
    We need to pass liability protections in the next 
coronavirus relief bill so that this economic recovery will not 
be hijacked by trial lawyers. I believe this is the major thing 
we have to do as we move forward.
    So, again, Mr. Zuluaga, how important is passing liability 
protections to protect businesses who are trying to open 
safely, to getting our economy back on track?
    Mr. Zuluaga. Congressman, thank you for the question, but I 
am not a lawyer, so I cannot respond with expertise. I would 
say that, as with other areas, having flexibility here for 
employers, particularly those operating in good faith, is 
essential to speeding up the recovery.
    Mr. Williams. I think our economy can and will get going. I 
am one of those who thinks we could see growth in the fourth 
quarter, and actually, into next year, even better. But I will 
say that liability protection is important regardless of what 
the business is, because if employers are going to get back to 
hiring people and getting the income going, Main Street America 
deserves that liability protection. So, I think it is very, 
very important.
    With that in mind, Mr. Chairman, I yield back.
    Chairman Cleaver. Thank you, Mr. Williams.
    The Chair now recognizes Mr. Himes for 5 minutes.
    Mr. Himes. Thank you, Mr. Chairman, and thank you to our 
witnesses today. This is a very interesting and important 
conversation, given the ongoing difficulties in the economy.
    I was a little sad to hear my Republican colleague say that 
Ms. Jayapal's proposal is somehow way out there on the fringe. 
It simply gives money to employers that have suffered 10 
percent declines in revenue, to pay their employees. It looks a 
lot to me like the PPP program that we are all praising right 
now.
    And, by the way, my understanding is that it has been 
employed with some success in countries like Australia and New 
Zealand, maybe in Israel, hardly left-wing places.
    But I have a different concern about the program, which has 
been a larger concern I have had with the efforts we have made 
across-the-board with the PPP, and with many of the efforts on 
the part of the Federal Reserve, including the primary and 
secondary purchases that they are making.
    Other than the unemployment insurance and the direct branch 
to individuals, this has been a very business-oriented 
recovery. And I understand the attraction of trying to help 
small businesses, but the reality is, as Mr. Perlmutter said, 
an awful lot of businesses are going under anyway, already 
have, and certainly will.
    And that is not a happy thing, but there is a process of 
bankruptcy that often will keep a business operating and people 
employed while a company rejiggers its capital structure.
    So my question is--and let me start with Professor Stiglitz 
on this, and, if I have time, I would like to maybe hear from 
Dr. Cook and Mr. Zuluaga, but why should we not be focused on 
delivering money directly to the individuals who need it? In 
other words, if you are unemployed, you get money. If you never 
had a job, you would get money. When you go business-focused 
PPP, an awful lot of people will have paid their lease 
payments, will have paid for insurance. God only knows a lot of 
the efforts of the Federal Reserve are there to make 
bondholders whole.
    Professor Stiglitz, let me start with you. Why should we 
not reorient around what is clearly, to me, an obligation to 
the government, which is to keep American citizens--not 
businesses, large or small--directly whole as efficiently as we 
can?
    Mr. Stiglitz. I agree very much with your overall 
sentiment, and I think congressional response has to have a 
balance, but let me explain why I think the Paycheck Recovery 
Program is a good way of helping, because maintaining the link 
between workers and their firms is important for the recovery. 
We know that when that link gets broken, the recovery will be 
impaired.
    We also know that our unemployment insurance system has not 
been able to manage well this constant surge of newly 
unemployed. People have had to wait weeks and weeks to get the 
money.
    We also know, as I mentioned in my talk, that in America, 
more than in these other countries, workers depend on employer-
provided health insurance, and, if they get disconnected from 
their firm, they then go on Medicaid or on very expensive Cobra 
provisions. And so, this is actually an efficient way of 
delivering money to a lot of lower-income individuals. 
Remember, the way the program is set up, it only goes to people 
whose income is less than a certain amount, and you could 
obviously jigger that amount.
    So, it is actually directing money via an efficient, you 
might say, administrating process, to low-income and middle-
income workers who need it. It actually uses the existing set 
of relationships to disperse money. That is the way to think 
about it.
    Mr. Himes. Thank you, Professor. I appreciate it.
    Mr. Zuluaga, I only have 30 seconds, but you caught my 
attention, because you were sort of arguing in favor of direct 
aid to individuals. How do you respond to Professor Stiglitz's 
value placed on maintaining the employer-employee connection 
for purposes of health insurance, training, et cetera?
    Mr. Zuluaga. I think, in specific circumstances, it is very 
important, particularly when you have short-term disruptions 
and you have very few other changes to the underlying structure 
of the economy, because then that intangible capital doesn't 
get destroyed by whatever is happening around it.
    But increasingly, as time goes on and as people start 
making decisions about their future lives on the basis of the 
experience, those relationships become no longer sustainable, 
regardless of what you do with funding.
    Mr. Himes. Okay. Thank you, Mr. Chairman. I yield back.
    Chairman Cleaver. Mr. Gonzalez, you are now recognized for 
5 minutes.
    Mr. Gonzalez of Ohio. Thank you, Chairman Cleaver. And 
thank you, everybody, for your testimony today on this 
important topic.
    I want to start by commenting--I don't know if this was 
intentional. I think I have heard a couple of times that maybe 
we shouldn't be so focused on business bankruptcies, and I just 
fundamentally disagree with that. I think we need to be focused 
on bankruptcies, period, whether it is in the household sector, 
in the business sector, or the government sector. And having 
bankruptcies in any of those sectors and on a massive scale, I 
would argue, is net negative for the recovery and just in 
general.
    But I want to start, Mr. Stiglitz, with a question to you. 
In your written testimony, you have a comment here, ``We need 
to provide income-contingent loans where repayments and the 
duration of the loan automatically adjust to the circumstances 
of the economy and the firm.''
    I think that is an interesting concept. It is different 
from H.R. 6918. I am just curious, could you flesh that out a 
little bit for me? What do you mean specifically there? How 
would you see that administered? Just kind of drill down on 
that for me if you could.
    Mr. Stiglitz. Good. Thank you very much for the question. 
The point I have tried to emphasize is that no one knows the 
course of this pandemic, as we have seen. We thought in the 
beginning, it would be very short. We are now going through a 
very difficult time in certain States. We don't know whether, 
back in New York, we will have another wave. So, there's a lot 
of uncertainty.
    And we want homes and households to begin to spend as the 
economy recovers, but one of the things that dampen that 
spending is they don't know what is going to happen. So what I 
am proposing is that there be a lending program, a program that 
says, look, if there is a second wave or a third wave, fourth 
wave, a perpetual wave, we will suspend your payment 
conditional on the state of the pandemic, and it could be made 
very State-specific, national specific.
    But it builds in an automatic stabilizer, gives them some 
certainty. Some of the things that we are talking about, 
restructuring in response to the need to social distance, some 
of the investments that were needed. This would encourage them 
to do it, and then, if it turns out they have to shut down 
anyway, they will say, okay, you don't have to make a repayment 
until the economy starts going again. It really gives the 
flexibility that we need.
    Mr. Gonzalez of Ohio. Thank you.
    And then, Ms. Eskelsen Garcia, a question for you. I share 
the goal of needing to support, first off, our State and local 
governments, but also, in particular, our schools, so that we 
can get our children back in the classroom safely.
    In your proposal, you talk about $170 billion in the 
education stabilization fund, $56 billion for PPE. Can you just 
walk me through kind of where those numbers came from, because 
I am somebody who believes, if we don't get our kids back, the 
economy is going to suffer, but, boy, there are some massive 
long-term ramifications there, and--but we need to do it 
safely, so just expand on that if you could?
    Ms. Eskelsen Garcia. And thank you for that, because, 
finally, I heard someone say we have to open schools safely, 
and it will cost money.
    We have 4 million, more or less, folks who work inside 
those schools, and that is the teachers, the paraprofessionals, 
the school principals, the counselors, and, if you are lucky 
enough to have one, a school nurse.
    So, we have looked at that. We have looked at the cost of 
what it costs for a hospital to buy the protective gear that 
you need.
    I will tell you it is probably a low ball, because we also 
need--I used to ask parents if they would donate Kleenex, 
toilet paper, and soap. We have always run out of soap for the 
kids in the bathrooms. Now, we are going to need something much 
more sophisticated to disinfect and sanitize. There is no 
budget for that.
    And the most expensive part is going to be--we have thought 
of some very, very creative ways that you can distance kids, 
but it means that you have to creatively use the space--the 
library, the gym--or you have to look at split sessions, and 
that means you might have to run the school buses twice a day 
instead of just that one round trip.
    So, we have put all of that into the calculation of what we 
are going to need just to maintain what we have right now. And, 
like I said, it is probably on the low side.
    Mr. Gonzalez of Ohio. Great. Thank you. I yield back.
    Chairman Cleaver. Thank you.
    The Chair now recognizes Mr. Sherman for 5 minutes.
    Mr. Sherman. Thank you. And, Mr. Chairman, thank you for 
your opening comment about how apparently, by mishandling 
COVID, we might be able to persuade Mexico to build the wall. 
While we are talking about spending money and getting the 
economy going, I want to put in a strong pitch for the $5 
billion in the HEROES Act for doing the research necessary to 
ameliorate this disease.
    As it happens, our professional medical researchers are at 
home because all of the non-COVID research projects have been 
suspended. And, every time I ask a medical researcher or 
medical expert about this disease, how is it transmitted, et 
cetera, the answer is always, well, we need to research this, 
we need to research that. There is no better way to fight the 
economic effects of COVID than to actually defeat the disease.
    Part of that would also be to make sure that everybody has 
enough sick days. It is very easy to tell people, ``Stay home 
if you have a fever,'' and we provided funding for smaller 
employers to have sick days, but everybody needs sick days, and 
some people used up their sick days on other illnesses.
    Professor Stiglitz, when I first got to Congress, the focus 
was on the enormous Federal budget deficit, that deficits cause 
inflation, that they cause high interest rates, and, yet, the 
inflation is running lower than we want it to. Interest rates 
are so low that savers are very frustrated. And we can avoid 
future interest on the debt if we monetize the debt, that is to 
say, we have the Fed own the debt instead of issuing it to the 
public.
    The world seems to have an insatiable desire for U.S. 
dollars. Is our thinking now emoted on deficits? Can we spend 
trillions of dollars, monetize the debt--that is to say, have 
the Fed own it instead of selling it out to those who would 
expect interest payments--and get through this crisis?
    Mr. Stiglitz. I am not worried about the deficit. The 
interest rates are very low. Servicing the debt costs 
essentially nothing. And, as you said, history shows that the 
enormous increase in the balance sheet of the Fed after 2008 
did not cause any inflation.
    When you go to war, you don't ask the question: Can we 
afford it? We are at war with this virus, and we have to win 
this war, and we don't want our economy destroyed as we are 
fighting the virus. So, I don't think you really have any 
choice.
    At the same time, you want to spend the money well, and 
that is why I think the Paycheck Recovery Act is really a good 
bill, because it actually targets the money very effectively. 
It doesn't spend billions of dollars in paying the banks to 
administer the program and administer it in a way that the 
money goes to those who are well-connected. It does it in a--
the recovery program doesn't--can disperse money very very 
quickly.
    So, to me, I do always worry about spending money well, and 
one of the things I like about this particular bill is that it 
seems to actually have been very thoughtful about getting money 
where we need it and get a big bang for the buck.
    Mr. Sherman. Ms. Eskelsen Garcia, I think you have done a 
good job of illustrating why we need more funds for our schools 
to be able to reopen safely. I point out also that many 
schools, particularly here in Los Angeles, will not open in 
August, and they need technology for home learning. And, while 
that is happening, you need a lot of money to reopen, you need 
a lot of money for distance learning. While you have those 
increased costs, we have a tremendous decline in revenue for 
State and local governments.
    I would like to ask whether the $90 billion State fiscal 
stabilization fund grants to support State funds of education 
in the HEROES Act is helpful, and to what degrees it is--
    Ms. Eskelsen Garcia. We have asked for $175 billion for--an 
extra $4 billion for technology and the E-rate. And so, to 
answer your question, we need everything we can get, and the 
thought of not getting any help at all--if you just gave us 
what you gave Shake Shack, that would be a giving. That is what 
I am thinking, is this is no different. We are talking about 
massive layoffs. We are talking about your public schools 
facing, are we able to open with any plan? And we can't do it 
without extra resources. We just can't.
    Chairman Cleaver. Thank you. Thank you, Ms. Eskelsen 
Garcia.
    The Chair now recognizes Mr. Timmons for 5 minutes.
    Mr. Timmons. Thank you, Mr. Chairman. I appreciate you 
holding this hearing, and it is good to see you all, even if it 
is on video conference.
    I was going to end my remarks talking about debt, but, 
given the previous questions, I would like to also begin with 
it.
    The cost of our debt last year was $593 billion. Next year, 
I would imagine that we are going to spend more on our interest 
payment on our debt than on the entire Department of Defense 
budget. So, debt is not free. It does come with a cost, and it 
is something that we need to be mindful of.
    That said, it is not the time to pinch pennies. We need to 
get help to the people who need it, we need to get help to 
businesses, and we need to get the help to individuals who have 
lost their jobs. Those two endeavors are not mutually 
exclusive.
    As the owner of multiple small businesses--I have a gym, a 
Yoga studio, and a real estate development--I am very fortunate 
that we had a good year, last year. Between our cash reserves 
and the PPP loan that we got, we are likely going to make it. I 
say, ``likely,'' because, if this goes past April, May, if we 
don't have a vaccine before then, we probably won't make it.
    I have a number of small business owners who have reached 
out, and they have said, if we re-close the economy, they will 
just file bankruptcy. They have to close up shop, and it is a 
reality that a large percentage of small businesses will not 
survive this.
    And it is not right that the government has shut everyone 
down. I realize that we had to flatten the curve, slow the 
spread, but we need to get help to the businesses that have 
been affected by this, and we need to get help to individuals 
who have lost their jobs. Those two things are not mutually 
exclusive. And I look forward to the conversations around the 
phase 4 legislation.
    Obviously, there does have to be a component of business 
liability protections. If you tell a business they can reopen, 
and then you tell them they are going to get sued because they 
reopened, even though they are following best practices, that 
is not consistent. So we need to reopen, but we have to do it 
safely.
    Mr. Zuluaga, I would like to hear your thoughts on phase 4 
legislation and what you think is the most effective way to get 
that relief to those who need it most?
    Mr. Zuluaga. Sure. Thank you for the question. I think 
focusing the business support on the areas that are shut down 
or have experienced a second wave is very important, because 
that is where the supply shop is happening and where the help 
is going to be most useful.
    Besides that, I would focus on incentivizing reentry into 
employment. I think some of the protections you mentioned to 
businesses that are getting back into business and want to do 
so safely and want to buy the protective equipment and so forth 
is important so that there is no legal uncertainty.
    But, in addition to that, I would say, if there is going to 
be spending on supporting demand generally, it should be 
unrestricted. It shouldn't be conditional on business 
regulations and on businesses taking on new regulatory burdens 
that didn't exist before. I think that is the wrong approach, 
because, right now, we face a little bit of uncertainty in 
businesses, particularly because of all the uncertainty in the 
future, and they need that flexibility.
    Mr. Timmons. So you would agree that the additional $600 of 
unemployment insurance benefits that those who lost their jobs 
have received, that perhaps we need to have a more surgical 
method to facilitate workforce reentry to encourage workforce 
reentry?
    Mr. Zuluaga. I would indeed focus on incomes. I would look 
at how much people are earning and, below a cutoff, I would 
suggest some financial support regardless of their employment 
status rather than boost unemployment benefits, because I think 
there can be a disincentive to work, and it can cause people to 
become more and more removed from the labor market, which we 
don't want.
    Mr. Timmons. Okay. Just to be clear, I want to help these 
people, but we have to get back to work, and we need to do it 
in a strategic and surgical way. I think the CARES Act overall 
was great, but there were a lot of shortcomings that we could 
have modified the approach, and it would have had a better 
impact, and it would have helped people, and it would have 
helped businesses.
    And, again, I think that is the whole point of phase 4 
legislation. We have to be very intentional about helping those 
who need it without casting a larger net.
    And, like I said, I am going to end the way I began--$7 
trillion is what we probably have spent thus far. We are going 
to have $30 trillion in debt by the middle of next year, if not 
shortly after that. We can't keep spending money that isn't 
ours. It is our children's, and it is our grandchildren's 
money. Now is not the time to pinch pennies, but now is also 
not the time to spend recklessly.
    So we need to make sure that our dollars have the effect 
that we want, we need to get people back to work, and we have 
to do it safely, and I am just praying for a vaccine in 
November or December as opposed to April.
    With that, Mr. Chairman, thank you for holding this 
hearing, and I yield back.
    Chairman Cleaver. Thank you.
    The Chair now recognizes Mr. Vargas for 5 minutes.
    Mr. Vargas. Thank you very much, Mr. Chairman, for holding 
this hearing, and I thank the ranking member, as well. I 
appreciate it very much.
    When I first came to Congress, I sat on the Agriculture 
Committee, and the Farm Bill was up that year, and they wanted 
to make deep cuts to the Supplemental Nutrition Assistance 
Program (SNAP). Of course, I was very much against that and 
argued against that. That is the old food stamp program.
    And I happened to quote the Bible by Matthew 25:33-46, 
where it says, ``for I was hungry, and you gave me something to 
eat,'' and went on and on. But, anyway, a colleague of mine 
from Tennessee took issue with that, and I think he quoted 2nd 
Thessalonians, saying: ``If a man will not work, he shall not 
eat.''
    But what I didn't know in that conversation was that my 
friend from Tennessee had received $3.6 million from the 
Federal Government for his farm and his family's farm. The New 
York Times pointed that out the next day, and I went and had a 
conversation with him. I said, ``I find it somewhat 
hypocritical that you don't want us to feed hungry people, and, 
yet, you put $3.6 million of government money in your pocket. 
How do you balance that?''
    He said, ``Well, we are a business, and they are just 
people.''
    I said, ``Oh, okay. I understand.''
    That is his view, and that is fine.
    Now, I am on this committee, and I have heard people 
pontificate lots of times about the Troubled Asset Relief 
Program (TARP), saying, ``Oh, no, no. Let the businesses sink. 
We should never subsidize them. If they can't make it, let them 
sink.'' Yet, that view has changed somewhat now, for some of my 
colleagues, and I think that is good.
    But it seems to be the same thing. You don't mind putting 
money in the hands of the businesses, but when it comes to 
putting that money in the hands of the people who need it, the 
employees, there is a problem.
    I think that is what this bill basically does. It says, 
``These people are unemployed. We have to help them.''
    Professor Stiglitz, am I wrong on that? The ideology says, 
well, because this is socialism, and we are against socialism. 
I have been to New Zealand. I have been to Australia. They 
didn't seem very socialist to me, but maybe I am wrong about 
that. Could you comment?
    Mr. Stiglitz. No. You are absolutely right. I have talked 
to government officials in many of these countries, and these 
are not radical countries. This is not Venezuela or anything 
like that. These are middle-of-the-road, center-left, center-
right governments, by the way, in which there is across-the-
board support for these programs. And it is that across-the-
board support that has created a kind of solidarity that allows 
the disease to be curbed, because they respect each other, 
trusting government.
    And, as a result of curbing the disease, the economy is 
back, and that really echoes what Ms. Eskelsen Garcia said: If 
you have a safe environment, people can go back to work, and 
you can go back to school.
    Mr. Vargas. Thank you. I agree. I did want to ask Ms. 
Eskelsen Garcia, though--I have to tell you that I am very much 
in favor of reopening the schools when it is safe. The reality 
is that not only do children get educated in the schools, but 
it would also help the parents with childcare, to be frank. A 
lot of people can't work if their kids can't go to school.
    That is what I hear from my educators here in San Diego and 
from school board members. They want to open the schools, but 
they only want to do it safely. And yet, they are constrained 
because they get money from the State Government, and, if the 
State doesn't have the money, they can't help out the schools.
    Could you comment on that?
    Ms. Eskelsen Garcia. It is not rocket science. It is basic 
adding and subtracting. School boards are hitting the panic 
button. They are being told all over the country, ``Do not 
expect what you thought you were going to have next year. Start 
cutting your budgets.''
    We already have people who are getting pink slips at a time 
when we need all hands on deck. There is no other funding 
source than the Federal Government. We cannot hold a bake sale 
and hire people back. If it was bad for business to have to 
have massive layoffs, how can it not be even worse to have 
massive layoffs of the only people who can open the schools 
safely?
    There are some folks who don't see how that connects, that 
you can't open schools safely if you don't have enough people 
and you don't have the supplies that you are going to need to 
do it.
    Let's do it safely. We can do it.
    Mr. Vargas. I agree. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Cleaver. Thank you.
    The Chair now recognizes Mr. Taylor for 5 minutes.
    Mr. Taylor. Thank you, Mr. Chairman. I really appreciate 
this hearing. Thank you, everybody, for being here.
    I just want to kind of take us back a little bit and think 
about the economic step that we as a Federal Government took 
toward our economy. We basically put our economy in a coma, 
basically went to a shelter-in-place strategy really across the 
country, and then took a series of steps to try to--when we put 
the economy in a coma, what do we need to do? One of the things 
we did is we did the PPP program. We increased unemployment 
benefits. We created a series of different programs that were 
absolutely massive, in the trillions of dollars across-the-
board.
    One of the things that we did that I think is really 
important is we forbeared on mortgages, and we did that 
basically in two ways. One was going to Fannie Mae and Freddie 
Mac by statute and telling them, ``You need to forbear people's 
home mortgage payments. Obviously, if people aren't working, 
they are not earning revenue, and they can't make their 
mortgage payments.''
    And the second way we did that is by going to the banks 
through the Office of the Comptroller of the Currency (OCC) and 
creating guidance for them that said, ``Hey, you guys can 
forbear on your mortgages, right?''
    So those two steps were really massive and really allowed 
about a little over $30 trillion of debt in this country to 
forbear.
    A place where we have not seen forbearance is in the real 
estate space, and particularly the collateralized mortgage-
backed security market, they don't really--they have not been 
given guidance from on high. The Federal Government hasn't 
passed legislation. They haven't really taken a step to allow 
or encourage them to forbear. I think that they feel some 
market pressure to do that, some public pressure to do that, 
but we are not really seeing that.
    A group of 105 Members--and many of you who are in this 
hearing right now were part of this--signed the letter to the 
Treasury and to the Fed encouraging them to come up with some 
kind of facility, probably using their Section 13(3) authority, 
to encourage forbearance on commercial real estate loans so 
that those properties are not foreclosed.
    And, just so everybody is clear on what we are about to 
see, I think we are about to see a wave of foreclosures 
starting this fall going into next year that some analysts 
estimate will be 2 or 3 times worse than anything we have ever 
seen before. So, it is very serious. It is coming at us at a 
relatively quick pace. In other words, it is going to happen so 
fast that, by the time we are here to pass--we pass a lot a 
day--it would be very difficult for it to be implemented fast 
enough to forbear on all of the different pieces of 
foreclosures that are coming up.
    So my question, Mr. Zuluaga, is: Do you think that getting 
mortgages in a place where they are forbearing while we are 
putting the economy in a coma makes sense in order to try to 
keep things going for the other side--we get to the other side 
of this from an epidemiological point of view?
    Mr. Zuluaga. I think it can work. There is a risk that you 
will get delinquencies accumulating at the end of the period, 
and this is something that we are still uncertain about with 
regard to Fannie and Freddie, for example.
    They have had forbearance for a long time. And, actually, 
the forbearance rates, even though the take-up was high, the 
actual mortgages in forbearance are much less than most of us 
expected, which is good news.
    Mr. Taylor. Right.
    Mr. Zuluaga. I think forbearance can help, but, so long as 
we don't have much certainty around when the recovery is going 
to take place, we are really then hiding delinquencies as 
forbearances and potentially defaults, and, eventually, when 
foreclosures are again allowed, that may happen again.
    Mr. Taylor. Sure. And I guess, as part of this 
conversation, it is important that, being from Dallas, Texas, 
we remember the Resolution Trust Corporation (RTC) days, when 
the RTC, through the FDIC, went in and programatically 
foreclosed every property that was in default and then just 
liquidated it, and it really collapsed values within that 
market. It was a very brutal experience for everybody involved 
and really harmed a lot of jobs.
    I think the important thing here is that, particularly in 
the hospitality space, of the first 24 million Americans who 
lost their jobs, 6 million were working in hospitality.
    And so, that industry has been really, really injured, very 
harmed. It is going to be a while until it recovers, and so, if 
we could give them a liquidity bridge to get to the other side 
so they can start paying their mortgage, so--we lend them money 
to pay their mortgage.
    I was talking to one hotel operator yesterday who was 
looking at the legislation that we are working on. I have a 
member of this committee working on filing that bill later this 
week. And he is saying, ``Look, without this bill, I am 
probably going to lose every single property I own. With this 
bill, I probably can keep every property that I own.''
    What is important about that is it means they can pay the 
money back and that those jobs will be saved.
    Mr. Chairman, I yield back.
    Chairman Cleaver. The gentleman yields back.
    The Chair now recognizes Mr. San Nicolas for 5 minutes.
    Mr. San Nicolas. Thank you, Mr. Chairman, and thank you for 
holding this very important hearing.
    For me, I sat back, and I observed the discussions, and I 
listened to the ideas, and I looked at the recommended policy 
provisions that were being put forward, and I think that one of 
the first things we need to reconcile is somewhat of the 
undertone of our witness testimony here today, and that is the 
question of whether or not we really view this current set of 
circumstances as something that requires permanent adaptation, 
or are we looking at a white squall event that we just need to 
get through in order to return to a place of normalcy in our 
economy and in our daily lives?
    And, Mr. Zuluaga, you mentioned that a lot of the necessary 
adaptation--that was a phrase you repeated over and over again, 
that businesses need to adapt, and I am a little concerned 
about that, because, right now, the adaptations that we are 
seeing, for example, are 50 percent occupancies in restaurants.
    We are seeing lines being drawn on sidewalks leading into 
businesses, keeping people apart. And I am worried that, if we 
adapt in a way that results in permanent changes, we are going 
to actually hinder our ability to recover.
    And so I wanted to enter into my comments with that 
context, because, as we all know, our economy in this country 
is predominantly consumer-driven.
    What the consumer needs in order for them to be able to 
have the confidence to drive our economy with their own 
spending is they need certainty. Any kind of uncertainty 
paralyzes them, and, right now, while we have done a good job 
as a Congress putting forward stopgap measures, it hasn't done 
a lot to ameliorate the uncertainty of our consumers when they 
look out 3 months, 6 months, or 1 year ahead.
    On July 25th, our eviction moratoriums are going to expire. 
On July 31st, the extra $600 in Federal Pandemic Unemployment 
Compensation (FPUC) is going to go away. On August 8th, the PPP 
is no longer going to be available. And so, when we have all of 
this uncertainty out there, it is going to make our consumers 
afraid of spending the money that we are even providing now.
    And so, I appreciate my colleague's bill that we are kind 
of discussing here today, because it kind of helps us provide a 
sense of certainty for our consumer.
    But I think one of the biggest things on the horizon for 
all of our consumers is, how are they going to pay for their 
housing? And I wanted to thank my colleagues for moving H.R. 
7301 recently to try and address the housing concern.
    Dr. Cook, I really appreciated your testimony. You came at 
us with a lot of hard data and information that was very 
concrete. I would like to focus in more on what you mentioned 
earlier about the 20 percent evictions that we are looking at 
having to deal with on September 30th.
    If you can elaborate more on that, and potentially what 
that might do in terms of a domino effect, spilling over into 
our housing, a second housing crisis that we have already 
just--we have been through in 2008?
    Ms. Cook. Thank you for your question.
    So, yes, this is something that I am certainly concerned 
about. Twenty percent of rental households face eviction by 
September 30th, and, as you know, there are moratoria 
everywhere, but these are coming to a close now. And this is 
happening in the fourth largest city in America, in Houston, 
and these courts are working through these cases.
    So, I think this is certainly something that has to be 
taken quite seriously, and what we know is, from the surveys of 
homeowners, of renters and of homeowners, 44 percent of Latino 
renters and 41 percent of African Americans won't be able to 
pay their rent.
    That is somebody's mortgage that is not going to get paid, 
and a multifamily home, for example, a multifamily mortgage 
that won't be paid. So, 40 percent of those mortgages are 
Fannie and Freddie mortgages, but there are a lot that aren't. 
And, even with these being covered by Fannie and Freddie, there 
is a problem of enforcement. The individuals have to figure out 
whether these mortgages are Fannie and Freddie mortgages.
    So, there is a lot of danger, I think, ahead if this isn't 
straightened out now.
    Mr. San Nicolas. Thank you, Dr. Cook.
    And, quickly, Dr. Stiglitz, we saw that the housing crisis 
was created back in 2008 from a bottom-up problem--I am sorry--
a top-down problem in the debt. Is it possible we are going to 
have a similar bottom-up problem with these renters not being 
able to pay?
    Mr. Stiglitz. Oh, very much. Whenever you have a major 
crisis like this, it spreads throughout the economy, and even 
good loans turn out to be bad, and you can wind up with a 
problem in the financial system, which is why--
    Mr. Hill. Time, Mr. Chairman.
    Chairman Cleaver. Thank you. Thank you, Dr. Stiglitz.
    The Chair now recognizes Ms. Wexton for 5 minutes.
    Ms. Wexton, you need to unmute your--we will proceed with 
Mr. Garcia, and we will come back to you, Ms. Wexton, if we 
can.
    Mr. Garcia, you are now recognized for 5 minutes.
    Mr. Garcia of Illinois. Thank you, Chairman Cleaver and 
Ranking Member Hill, for convening this hearing, and a 
bipartisan proposal--I am referring to the Payroll Recovery 
Act, as it has support from across the aisle in both the House 
and the Senate, and this discussion about protecting workers' 
paychecks is urgent and badly needed for my constituents here 
in Chicago and for working-class communities like mine across 
the country.
    From what our panelists have shared today--and thank you 
for joining us today--it sounds like we haven't done enough in 
Congress to help ordinary people during this crisis and to 
prevent a deeper collapse. Unfortunately, I am not surprised, 
because many people in my community are getting more and more 
worried.
    Wall Street got the guarantees they needed, but my 
neighbors are in a very precarious situation. The additional 
unemployment benefits provided by the CARES Act expire this 
month, and so does the bill's protections against eviction.
    Many businesses in my district that were supposed to close 
temporarily are now announcing permanent closures. I have lived 
in my neighborhood for 50 years, and I was stunned by the scale 
of suffering and loss that my community faced during the great 
financial crisis of 2008-2009. We had barely started to recover 
from that crisis when COVID-19 hit.
    Ms. Eskelsen Garcia, you mentioned a looming crisis facing 
our public sector workers. Many of my constituents are public 
sector employees, and even more rely on teachers and social 
workers, nurses, and librarians every day. Cuts in public 
services fall disproportionately on communities like mine.
    Can you talk about the cuts that you are hearing about at 
the bargaining table and how those cuts will disproportionately 
affect poor and Black and Brown communities across the country?
    Ms. Eskelsen Garcia. I have heard from people from Hawaii 
to Wyoming to New York to Florida. Everybody is alarmed by 
either school districts saying, we have four 3rd grade classes 
of 32 kids. We are going to not replace the 3rd grade teacher 
who is retiring, and so we will redistribute those kids, and we 
will end up with 40 kids or more in a classroom. Or they are 
saying, we are going to lay off the band teacher. We are going 
to lay off the foreign language teacher. We are going to lay 
off counselors.
    At a time where we need every single person to help us open 
those schools safely, they are facing budget cuts that will 
mean massive layoffs in every community. This will ripple 
through the economy and have the double effect of saying--
something that people say is essential to getting people back 
to work, a healthy public school open, will be almost 
impossible to accomplish, and, in some areas, completely 
impossible to accomplish.
    Mr. Garcia of Illinois. Thank you.
    For Mr. Stiglitz, the COVID-19 pandemic demonstrated how 
connected the world is, but also how disconnected the response 
to the virus has been in different countries. Unfortunately, I 
think the virus could expand the gap between richer countries 
and poorer countries, and the burden of additional debt put on 
countries in Latin America, for example, could slow down our 
global economic recovery.
    In April, I introduced the Systemic Risk Mitigation Act to 
support an International Monetary Fund (IMF) issuance of 
special drawing rights, better known as SDRs, to help 
countries' access the currency they need during this crisis. I 
was glad to see that Senator Durbin introduced a similar bill 
in the Senate last week.
    Professor, do you worry that our global economic downturn 
will get worse without some form of international stimulus, and 
do you think special drawing rights would help?
    Mr. Stiglitz. Yes. We live in a very interconnected world, 
and a downturn in the rest of the world will inevitably affect 
us a great deal. And right now, Latin America is one of the 
hotspots, and so the downturn there will have a big effect on 
us.
    I have been advocating very strongly for a special issuance 
of SDRs. If the United States supported it, they can issue $500 
billion, and it wouldn't cost American taxpayers a thing, but 
it would be of enormous benefit to American citizens, because 
it would be a boost to our economy as it helps the rest of the 
world, and it would help us in our diplomacy enormously.
    Mr. Garcia of Illinois. Thank you.
    I yield back, Mr. Chairman.
    Chairman Cleaver. Thank you.
    Ms. Wexton, are you able to get on now? Ms. Wexton, you are 
recognized for 5 minutes. We still can't hear you.
    Mr. Garcia of Illinois. Mr. Chairman, I have one more 
question if--
    Chairman Cleaver. Ms. Porter, you are now recognized for 5 
minutes.
    Ms. Porter. Thank you so much.
    Mr. Stiglitz, in an April 2020 Roosevelt Institute report, 
you identified four design problems with the PPP, and I would 
like to talk about those, because one of the most common 
questions I get is, why support a paycheck guarantee approach 
if we have already done the PPP? So, I would like to spend our 
time kind of trying to answer that question.
    First, in your Roosevelt Institute report, you mentioned 
the randomness of who was going to get helped, and we certainly 
saw that. Some industries got help while others were left 
behind. Industries like construction and professional firms 
that weren't very impacted got PPP loans while other 
industries, that are really suffering, were left behind.
    Second, you mentioned that those who were best-connected, 
most likely to know about the program, were more likely to get 
relief. That certainly happened. Congress went back and tried 
to adjust the PPP loan by setting aside money for some of our 
community lenders to try to address that.
    I want to pick up on the third thing that you identified as 
a problem with the PPP, that the Paycheck Recovery Act would 
take a distinctly different approach. You flagged the 
introduction and the use of banks as intermediaries in the PPP 
as a problem. What is the problem with having lenders be 
intermediaries, and how is the Paycheck Recovery Act different?
    Mr. Stiglitz. That is a great question.
    The point is that having the banks as the intermediaries 
meant that those who were most connected with the banks got 
first in line. And I saw this very vividly. Small business 
owners, but very small, called up their bank, and they couldn't 
get an answer.
    And there were others who were very well-connected, and it 
wasn't just random. Some sectors that were very badly affected 
didn't get as much money as some sectors that were not very 
badly affected.
    I also pointed out that we were paying the banks an awful 
lot of money to administer it. So, in fact, our taxpayers' 
money wasn't going to where we--small businesses. It was going 
to the banks.
    Ms. Porter. Yes. As I look at it, we paid the banks an 
average fee of around 1 percent. It is something in the 
neighborhood of $6 billion, taxpayer dollars, that went to 
these banks for a loan program in which they took on no credit 
risk and did no assessment of the applications. So, it just 
seems like that $6 billion could be buying a lot of actual help 
for American families right now.
    You also raised concerns with the PPP's lack of clarity and 
transparency, and I have been pushing hard with regard to 
making more data about the PPP transparent.
    Can you tell me why you think the Paycheck Recovery Act 
would be more clear and would be more transparent and could 
avoid some of the problems and abuses that we have seen with 
the PPP?
    Mr. Stiglitz. The basic idea of the Paycheck Recovery 
Program is it is defined by clear rules of who can get access. 
You just apply, and, if you are eligible, there is a set of 
eligibility criteria. You know exactly what the formula is.
    And so, it is available to everybody; not first-come, 
first-served. It is available to everybody who meets certain 
criteria, so we know that whether or not you are a minority, 
you get it.
    On the other hand, when you go through the banks, it 
depends on who has the connections with the banks. I have been 
very disturbed that it took a lawsuit under the Freedom of 
Information Act to get the information about where the money 
was going.
    We, as citizens, should have the basic right to get that 
kind of information without having to sue.
    Ms. Porter. Yes, and I think one of the things I want to 
highlight for everyone who is listening is, for my colleagues, 
that the small businesses across the country agree with these 
concerns about the PPP and recognize that a Paycheck Recovery 
Act remains a necessary step to helping make sure that we are 
keeping people on payroll.
    When I talk to constituents, they don't want to be on 
unemployment. They don't want to be applying for these 
programs. They want a paycheck. They want to be able to 
continue to make ends meet for their families. They want to 
know they are going to have a job to go back to.
    That is the help that they are looking for. They are 
looking for help in continuing to get that paycheck and to have 
that dignity and provide for their families.
    Mr. Chairman, I would like to submit for the record an 
April 29th letter from over 30 national, State, and regional 
small business organizations calling for the passage of the 
Paycheck Recovery Act, as well as an op-ed written by Mark 
Zandi.
    Chairman Cleaver. Without objection, it is so ordered.
    Ms. Porter. Thank you, and I yield back.
    Chairman Cleaver. Thank you.
    Ms. Wexton, you are now recognized for 5 minutes, I hope.
    Ms. Wexton. I hope that I am now unmuted.
    Chairman Cleaver. Yes.
    Ms. Wexton. Great. Thank you very much, Mr. Chairman. And 
thank you to the witnesses for coming before us today. I want 
to touch on the issue of expanded unemployment benefits a 
little bit more. As has been noted, they are set to expire on 
July 31st.
    And, in my home State of Virginia, the weekly unemployment 
benefit is only $378, so it is not the lowest in the country, 
but it is not enough for a family to live on, so the additional 
$600 a week provided by the CARES Act has been a huge benefit 
to people just to be able to pay their rent and their car 
payments and things like that. But many are claiming that this 
benefit is way too generous.
    Larry Kudlow, one of the President's economic advisors, 
says we are paying people not to work, and that we are 
disincentivizing people to not return to work. That is a lot of 
double negatives there, but I think he is saying that it is too 
much money for people, that they are living large on $600 a 
week.
    And we are hearing from various talking heads that 
employees are refusing to come back to work, and that employers 
are struggling to bring people back to work because of this 
extra $600 a week.
    Now, we had Federal Reserve Chairman Jerome Powell before 
us a couple of weeks ago, and I asked him this very question. I 
asked him if he was seeing anything in the data or business 
activity surveys that supported this claim, and he said that he 
did not see anything like that, and he opined that more likely 
what is happening is that people in the service economy jobs 
are more reluctant to go back to work because they don't feel 
safe, because they are likely going to come in contact with a 
lot of people, and a lot of them are not going to be wearing 
masks because that is not mandated in a lot of places, and a 
lot of employers are not requiring that they do so.
    That is pretty consistent with what I am hearing, as well 
as people who are having trouble accessing childcare. Many 
childcare centers have closed, and they don't have those 
options anymore.
    And it is not just in the service economy that the jobs are 
lost. From April to May in Virginia, we have seen thousands of 
jobs lost across the sectors, including 1,300 manufacturing 
jobs, nearly 2,600 healthcare and education jobs, 5,900 State 
Government jobs, and 15,000 local government jobs.
    Ms. Eskelsen Garcia, you mentioned the 900,000 public 
education jobs already lost nationwide because of local budget 
cuts. Those people don't have the option of returning to work 
even if they wanted to. So, Professor Cook, do you think that 
now is the time to pull back on this enhanced unemployment 
support?
    Ms. Cook. Absolutely not. If we are learning the lessons of 
2008-2009, now is the time to augment that support, not to 
withdraw it, because we will be looking at even higher 
unemployment numbers.
    There are still 19 million people receiving unemployment 
benefits. This is unprecedented for the modern era, for the 
post-1940 era. The unemployment rate is 11 percent. So, this is 
not the time to withdraw support from State and local 
governments, especially given the health crisis.
    The health crisis is not over, and all of these hospitals, 
the healthcare providers, they need the support. We are going 
to need a lot of mental health support once this is all over 
for people to be able to go back to work. I think that has been 
underrated and has been underestimated. People are going to 
need a lot of support to be able to go back to work whenever 
that happens, whenever it is safe to do so.
    Ms. Wexton. Professor Stiglitz, do you agree that it is not 
the time to pull back on that support? It would be wonderful if 
we could maintain that employer-employee relationship, but many 
people are not going to have that option, so what is your 
position on these enhanced unemployment benefits, whether we 
should let them expire?
    Mr. Stiglitz. I agree very much with Professor Cook. I 
don't believe that we should allow those to expire. The fact is 
that, with a high probability, we will have significantly 
elevated unemployment levels for a long time. And in many, many 
States, the basic levels of unemployment insurance are among 
the poorest in the western world, and the coverage doesn't 
cover a lot of people.
    And that is one of the things that you did in the CARES 
Act, is extend the coverage. So, both in terms of amount and 
the coverage, both of those were deficient, and you addressed 
that in the CARES Act.
    Ms. Wexton. Thank you. And you guys are in good company, 
because one of the things that Chairman Powell indicated was 
that he thought that resetting that to zero would have an 
extremely detrimental effect not only on the economy as a 
whole, but on our recovery, so thank you very much.
    And, with that, I will yield back, Mr. Chairman.
    Chairman Cleaver. Thank you. We apologize for the technical 
problem, whatever it was.
    I now recognize the gentlewoman from Texas, Ms. Garcia, for 
5 minutes.
    Ms. Garcia of Texas. Thank you, Mr. Chairman, and thank you 
for allowing me to join you in this very important hearing.
    I have been listening, and it just reminds me of some of 
the debates we had at the beginning of all this where we were 
trying to figure out where do we start, what do we do, and we 
focused on making sure that we address the health pandemic, 
because, no matter what, we still have to address the health 
issues, make sure our hospitals are ready, the frontliners, 
they are working at the hospitals and providing the care, and 
the research that is necessary to find the treatment.
    And then, we decided to make sure that we put money in 
people's pockets, like Mr. Himes said earlier, and to make sure 
that they were able to buy the things that they needed, which 
is why we had to support businesses.
    So, I think you can't do one without the other. They are so 
connected that I want to focus on the need for the Paycheck 
Recovery Act, because I know that, in my own family, it took my 
brother maybe 3 weeks of calling and online applications, et 
cetera, to even get on unemployment insurance, and then he 
loses benefits, he loses his longevity pay, he loses so much.
    I think there is still a need for us to take a serious look 
at the Paycheck Recovery Act, and I wanted to start with Ms. 
Eskelsen Garcia. Every time I heard you being addressed, I 
looked up, because I thought it was me.
    But you signed onto a letter, Mr. Chairman, and I do want 
to ask unanimous consent that it be submitted for the record, a 
letter supporting the Paycheck Recovery Act.
    And that clearly said that, we know there have been three 
packages, but there are still layoffs. The economy is still in 
a freefall. Working families are still hurting. They are 
worried about putting food on the table. They are worried about 
their rent. They need a paycheck. They need a job, as my 
colleague, Representative--
    Chairman Cleaver. Without objection, it is so ordered.
    Ms. Garcia of Texas. Thank you.
    Do you continue to believe that the relief packages passed 
by Congress so far are insufficient given the scale of this 
public health and economic crisis?
    Ms. Eskelsen Garcia. Is this for me?
    Ms. Garcia of Texas. Yes, ma'am. From one Garcia to 
another.
    Ms. Eskelsen Garcia. Gracias. I kept thinking, too, there 
are a couple of Garcias on here. Great name.
    But I don't want to say that it is enough, give us this, 
and life will be rosy. This is a beginning, and we know we 
can't do what we have to do with less, and we are facing our 
funding falling off a cliff.
    So, this is something that can at least stop the bleeding, 
and we are willing to be incredibly creative about what we can 
do, but we will not be able to open schools in so many 
districts in a safe way without some significant help, and, as 
was said, we have already lost, since this pandemic began, 
almost a million support staff.
    This might be the bus drivers, the paraprofessionals who 
aren't delivering instruction with a Zoom call the way a 
teacher is. They have just been told, ``You don't have a job,'' 
like everyone else who has been told, ``You don't have a job.''
    Ms. Garcia of Texas. We may not get them back, but if they 
would have stayed on payroll, as the Paycheck Recovery Act 
would do, that would be most helpful. So, you feel like workers 
still need the Payroll Recovery Act?
    Ms. Eskelsen Garcia. Yes, I do. And part of it too is, yes, 
the workers that I represent but their family members, and by 
the way, our students, and their parents who are out of a job. 
Anything that impacts a community impacts that child and that 
school, so this is more than just the teacher or the bus 
driver. These are the parents of our students who are just 
trying to put food on the table.
    Ms. Garcia of Texas. Yes. Thank you. Now, I have a question 
for Mr. Stiglitz. What are your thoughts on the Paycheck 
Recovery Act? Do you think there is a need for that today, as 
States are still struggling? I know my State of Texas is 
reaching a crisis point, my City of Houston. Do we still need a 
Paycheck Recovery Act?
    Mr. Stiglitz. Is that for me?
    Ms. Garcia of Texas. Yes.
    Mr. Stiglitz. Yes, very much so. One of the things that I 
emphasized is that the previous CARES Act wasn't comprehensive 
enough, didn't provide enough support to the State and 
localities. And it was so clear that the revenues of the States 
and localities would plummet, and with the balanced-budget 
frameworks, they were going to be strangled.
    And they provided essential services--education, health, 
welfare--and the suffering that would result, and the 
macroeconomic effects, I call it in my testimony, ``austerity 
from below,'' which would have large, multiplier effects, and 
it would mean that we would not have a robust recovery.
    So it is, in my mind, absolutely essential for not just 
businesses, but also the States and local communities, 
educational institutions, the research foundations. It is not 
just businesses that are having a hard time now.
    Ms. Garcia of Texas. I agree.
    Chairman Cleaver. Thank you.
    Ms. Garcia of Texas. And Mr. Chairman, I would like 
unanimous consent to submit for the record an April 29th letter 
to Speaker Pelosi from 100 economists supporting the Paycheck 
Recovery Act.
    Chairman Cleaver. Without objection, it is so ordered.
    Ms. Garcia of Texas. Thank you, sir. I yield back.
    Chairman Cleaver. Thank you. And I would like to thank the 
witnesses for their testimony today.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
 This hearing is adjourned. Thank you, everybody.
[Whereupon, at 2:13 p.m., the hearing was adjourned.] 

 
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