$2.9B for Marianas in HEROES Act

May 18, 2020
$2.9B for Marianas in HEROES Act
The Marianas gets over $2.9 billion to deal with the health and economic crisis caused by the coronavirus in the relief act the U.S. House of Representatives passed today. 207 Democrats voted for the bill, 1 Republican. Much of what I asked for—direct aid to schools and the Commonwealth government, continued relief for individuals and households, and CIP funding for health-related infrastructure—has been included in the Health and Economic Recovery Omnibus Emergency Solutions, or HEROES, Act. I particularly thank Speaker Nancy Pelosi. In the many Democratic Caucus conference calls we held during drafting of this bill, Speaker Pelosi always talked about the need to care for the territories. And the HEROES Act delivers:
 
  • Over $2B to CNMI for lost revenue
“Direct aid to offset local government revenue losses” was one of my top requests to the Speaker; and the HEROES Act responds generously. The Commonwealth government would receive about $2.14 billion within 30 days of enactment. The money is to “cover costs or replace foregone revenues not projected on January 31, 2020 stemming from the public health emergency, or its negative economic impacts.” Cuts to retirees and essential services could be restored. And the funds remain available until expended, which is necessary because our tourism-based economy is not likely to recover until visitors can be tested comfortably and quickly and there is renewed willingness to risk air travel. The HEROES Act also includes money for county-level governments, like Saipan, Tinian, Rota, and the Northern Islands municipalities. One problem with putting so much money in the hands of governors, everywhere in America, it does not always trickle down to where it is needed. So, we made sure Marianas municipalities, which provide many public services, get about $29 million.  
 
  • Money to cover school year 21-22
More funding for schools was first in the bipartisan requests I put together with my Pacific Delegate colleagues on April 14 , as the new legislation took shape. The HEROES Act builds on the CARES Act Education Stabilization Fund with another $81 million for Marianas schools. The CARES Act provided $27,940,945 for Marianas education, which became available for draw-down this week. Altogether this new money, together with annual federal grants, and the schools’ share of the $2.14 billion, that replaces lost general revenues to the Commonwealth, would more than cover the costs of this school year and the next for PSS, NMC, and NMTI. Funding can cover teacher and staff pay, distance learning technology, sanitation of schools, transportation, and health services. There is, also, over $10 billion in the HEROES Act just for colleges, which Northern Marianas College will qualify for.
 
  • More help for families
 Direct cash aid to individuals encourages taxable consumption and employment and is a more economically efficient use of federal resources,” I wrote the Speaker. And the HEROES Act provides direct aid in a number of ways. 
  • The CARES Act Pandemic Unemployment Assistance of about $342 weekly in the Marianas, for those who lost work because of the coronavirus, would continue through the end of January 2021, along with the additional $600 weekly being paid nationwide. Together, CARES Act and HEROES Act unemployment benefits could put $350 million into the Marianas economy. 
  • The HEROES Act also includes a second round of the recovery rebates—$1,200 for individuals, $2,400 for joint tax-filers—now being paid out in the Marianas. Up to three dependent children would qualify for $1,200 each, an increase from the $500 benefit in the CARES Act. And, retroactively, all dependents, including full-time students below age 24, become eligible for the CARES Act credit, as do those who use an individual taxpayer identification number and not a social security number. 
  • Federal funding for the Earned Income Tax Credit, which I have been working to get since I introduced H.R. 4309 in 2015, also made it into the HEROES Act. Taxpayers can use the credit to offset what they owe or get a cash refund. The HEROES Act also makes the Child Tax Credit fully refundable for 2020 and increases the amount to $3,000 per child up to age 17, or $3,600 for a child under age 6.
  • The HEROES Act provides another $30 million to help cash-strapped Marianas families with the costs of water and other utilities and for homeowner expenses, such as mortgage payments and insurance. And $1.82 million is set aside specifically for the Marianas Nutrition Assistance Program.
 
  • $945m for insular infrastructure
Together Pacific Delegates asked for infrastructure funding and the HEROES Act delivers $945 million. Our request linked water and sewage infrastructure to public health and the HEROES Act money can be used for that purpose as well as for hospitals and other facilities providing direct care. The Environmental Protection Agency estimates that $1.05 billion is necessary over the next twenty years to bring water infrastructure in the Marianas, American Samoa, Guam, and the U.S. Virgin Islands up to the first-world standard that is necessary to keep us all healthy, protect our environment, and rebuild our tourism economy. The HEROES Act also supports hardening infrastructure by allowing the use of disaster funds as a local match for FEMA grants; and sets aside $55 million for technical assistance to the insular areas, as did the CARES Act.
 
  • More Medicaid improvements 
Pacific Delegates’ goal of repealing the cap on federal Medicaid expenditures in the islands was partially addressed in the HEROES Act. The cap is removed for expenditures that result from the increased federal Medicaid share in the Act from the current 89 percent to 97 percent beginning July 1. The cap would also be removed for care to citizens of the Freely Associated States, if the Marianas Governor so chooses. Meanwhile I will continue to work to add full repeal of the Medicaid cap to the HEROES Act or some follow-up relief bill. My repeal bill, H.R. 6495, now has 22 co-sponsors , including a number of committee and subcommittee chairs. Medicaid is the federal health insurance program for low-income persons and demand has increased during the coronavirus crisis from 15,970 to 17,537, according to the Commonwealth Medicaid Agency.
 
  • Full subsidy for COBRA premiums
The HEROES Act covers health insurance premium costs for workers who qualify for COBRA continuation coverage due to loss of unemployment or underemployment. “COBRA” refers to the Consolidated Omnibus Reconciliation Act of 1985, which allowed workers to continue their employer-sponsored health coverage after being terminated or having work hours cut. The HEROES Act premium subsidy would be available for the period beginning March 1, 2020 through January 31, 2021. A special 60-day extended election period would be granted to allow eligible workers, who did not enroll in COBRA or were enrolled and dropped off, to re-enroll for their plan. Furloughed workers and workers in multiemployer plans are not eligible for COBRA, but will also have their premiums covered. All premium subsidies would be reimbursed through a credit against employer-side Social Security payroll taxes. No workers will be responsible for claiming the subsidy or seeking a refund - the employer will treat the worker’s plan as having been paid in full.
 
  • Relief for veterans
Another underserved group, often at special risk from the coronavirus and highlighted in my May 5 letter to the Speaker , is the veterans community in the Marianas. The HEROES Act responds to veterans’ needs in a number of ways. All veterans, regardless of disability, determined to have a financial hardship, would qualify for VA’s health care system, and be exempt from hospital and medical care copays. Deadlines to file claims and appeals for VA benefits, including disability compensation, are extended through the duration of the coronavirus public health emergency and for 90 days after the emergency has ended. And the Act prohibits the Veterans Secretary from taking enforcement actions to collect payments for benefit debts, establishing new benefit debts, sending notices regarding benefit debts to individuals or consumer reporting agencies, allowing interest to accrue on benefit debts, or applying administrative fees on benefit debts.
 
  • PPP and EIDL expanded
The HEROES Act makes important fixes to the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program to protect jobs and ensure more small businesses and nonprofits get the help they need. 315 Marianas businesses and nonprofits have already qualified for PPP and 109 for EIDL (see following story). The HEROES Act better targets PPP funds by carving out 25 percent for businesses with 10 or fewer employees and another 25 percent solely for nonprofits, no matter their size or type. The HEROES Act adds more flexibility by eliminating the requirement that 75 percent of the loan go for payroll and by extending the spending period through December 31. The Act, also, extends loan terms from two years to five years to lower monthly payments. And the Act boosts funding for EIDL grants by $10 billion. Read more about these changes and other improvements here .
 
  • More HUD program funds
The U.S. Department of Housing and Urban Development manages numerous programs that the HEROES Act funds and that aid the Marianas:
  • Tenant-Based Rental Assistance. $2.5 billion is provided for increased rental voucher costs and another $1 billion for new incremental vouchers. An estimate of the Marianas allocation is unavailable, as the distribution of funds will be determined by formula and methodologies to be developed by the HUD Secretary. 
  • Emergency Solutions Grant. $4 billion is to be allocated using the FY2020 ESG appropriation formula which should net the Marianas at least $4 million. Another $7.5 billion would be distributed under criteria set out in the CARES Act, which the Department has yet to implement.
  • The Community Development Block Grant program receives an additional $5 billion. The CARES Act, which had $2 billion for CDBG, provided the Marianas $549,270, and the same formula will be used for allocating the new money. The Marianas should receive about $1.4 million.
 
  • What’s next for HEROES?
The HEROES Act now goes to the Senate and an uncertain future. Senate Majority Leader Mitch McConnell has said it would be better to let state and territorial governments go bankrupt than help them cover their lost revenues. And the White House says the President will veto the HEROES Act. It is true the HEROES Act would be a financial windfall for the Marianas, far greater even the American Recovery and Reinvestment Act of 2009. But the amount of money matches the size of the problems created by the coronavirus. The Marianas faces a very, very long road to recovery and we will have to use any money Congress provides in the wisest way possible.