House Infrastructure Bill Poised to Move Forward with New “Homework Gap” Provisions

The Moving Forward Act (H.R. 2) is set to be reviewed by the Rules Committee and then will go to the House of Representatives floor for a vote in the coming weeks. It contains $5 billion to address the “homework gap” during the pandemic, related to disparities in at-home internet access for students. The COVID-19 pandemic has widened the opportunity gap by causing students to participate in school from home full time. The bill would also provide $1.2 billion for the State Digital Equity Capacity and Competitive Grant programs and includes language requiring the Federal Communications Commission to make Wi-Fi on buses for E-rate support. The infrastructure bill would also provide funding for school infrastructure, high poverty schools, child care facilities, affordable housing, and other provisions. Read a summary of the bill. The path forward in the Senate is still uncertain. President Trump is rumored to be working on his own infrastructure proposal as well.

Source: Children’s Budget Coalition

Police Reform Efforts in Congress

After the House of Representatives introduced the Justice in Policing Act, H.R. 7120, two weeks ago, the Republican-controlled Senate came out with their own police reform bill, the Justice Act, S. 3985. On June 24, Senate Democrats garnered enough votes to stop a procedural motion that would’ve brought the bill up for a vote. On June 25, the House passed H.R. 7120. Leaders in both chambers of Congress will now work together on a compromise bill. Here are the main similarities and differences between H.R. 7120 and S. 3985:

  • The proposed bills would encourage local police departments to increase transparency and accountability by leveraging federal funding from two Department of Justice (DOJ) programs, the Edward Byrne Memorial Justice Assistance Grant program and the Community Oriented Policing Services (COPS) program. 
  • The House bill would condition funding from these programs on the outright ban of chokeholds and carotid holds, while the Senate bill would allow these maneuvers when deadly force is authorized. 
  • Both bills would make lynching a federal hate crime. 
  • To receive COPS funding under the House bill, state and local governments would have to prohibit no-knock warrants in drug cases. The Senate bill would require them to report data on no-knock warrants annually; if they do not report for multiple years in a row, the department could face reductions in Byrne grants. 
  • The Senate bill would make it illegal to falsify a police incident report involving serious injury or death, punishable by up to 20 years in prison. The House bill does not have any comparable provision.
  • The House bill would require police departments to provide use-of-deadly-force reports on a quarterly basis, with noncompliance resulting in losing up to 10% in Byrne grants. The Senate bill would require these reports on an annual basis, with the penalty being up to 25% in Byrne grants.
  • The House bill, unlike the Senate bill, creates a defined use-of-force standard, which would allow deadly use of force by police officers in cases of imminent serious injury or death and as a last resort.
  • Both bills would create more transparency around officer disciplinary records. The House bill would create a National Police Misconduct Registry, which would be public and searchable. The Senate bill would require that police departments retain records of misconduct for 30 years and review records from other departments during the hiring process. Both bills stipulate loss of federal funding for noncompliance.
  • The House bill would tackle racial profiling by allowing individuals and the federal government to sue officers and agencies in civil court over racial discrepancies in treatment. The House bill would also withhold Byrne grants from departments that do not implement anti-racial profiling measures.
  • The House bill focuses on equipping federal law enforcement officers with body cameras, while the Senate bill gives $100 million to the states to distribute to police departments for body cameras.
  • While the House bill includes a “duty to intervene” provision which compels federal officers to stop other officers from using excessive force, the Senate bill does not include any such provision.
  • To receive Byrne grants under the House bill, police departments would have to provide “duty to intervene,” profiling, bias, and procedural justice trainings to officers. Under the Senate bill, the DOJ would develop intervention and de-escalation trainings and provide grants to states to implement the trainings.
  • Finally, the House bill would curtail the Defense Department’s 1033 Program, which provides local police departments with surplus weapons and equipment from the armed forces. The bill would reverse approved counterdrug and border security transfers but allow counterterrorism transfers to continue. The Senate bill does not speak to the 1033 program.

President Trump’s executive order, signed on June 16, encourages police departments to ban chokeholds in most cases, provide de-escalation and use-of-force training, and stipulates that the DOJ create an officer discipline database. He has encouraged Republicans to reject the House bill. The Alliance will continue to monitor any new developments.

The Impact of the CARES Act on Poverty

Two major studies have been released that attempt to illustrate the early effects of the CARES Act on low-income Americans. The findings show that despite a steep rise in unemployment to 13.3%, the provisions in the bill helped keep many families afloat financially. The Columbia University study finds that the poverty rate increased from 12.5% before the pandemic to 12.7%. Without the government transfers from the CARES Act, the rate would have reached 16.3%, amounting to almost 12 million more people in poverty. The positive impact on incomes is especially striking in minority communities. The poverty rate for Hispanics is currently 20%, rather than 27% without the CARES Act. For African-Americans, the rate is 20% rather than 25%. The other study from scholars at the University of Chicago and Notre Dame, which uses a different definition of poverty, found that the overall poverty rate fell from 10.9% in January and February to 8.6% in April and May.

Researchers attribute this economic buoying effect to the following provisions in the CARES Act:

  • The one-time stimulus payments to families
  • Expansion of unemployment insurance to gig workers and other contract employees
  • The extra $600 in unemployment benefits per week from the federal government

Because of the latter, researchers found the median worker earned 134% of their pre-pandemic pay.

Though this is all good news, low-income families undoubtedly lived through increased hardship, grief, and insecurity in recent months. Many individuals and families experienced significant delays in receiving unemployment benefits, forcing them to dig into their savings or cut down spending on necessities. There is evidence that food insecurity is more than double pre-pandemic rates and child hunger is rising faster than before. Moreover, under the CARES Act, undocumented immigrants, as well as their children and spouses with legal status, were not allowed to receive stimulus payments. As a result, the Migration Policy Institute estimates that 10 million undocumented immigrants and over 5 million documented family members did not receive these one-time payments.

Source: The New York Times

Health Care Nondiscrimination Rule

The Department of Health and Human Services (HHS) issued a final rule that will make it easier for providers and insurers to discriminate based on sexual orientation and gender identity. The regulation changes the “2016 Rule” embedded in Section 1557 of the Affordable Care Act, which upholds civil rights and nondiscrimination requirements in the provision of medical services. The rule would omit sexual orientation and gender identify from the classes of persons protected by Section 1557. HHS deems parts of the “2016 Rule” as overly complex, duplicative, and financially burdensome. It is expected that the rule will be challenged in federal court. This rule was released the same week as the Supreme Court, with a 6-3 majority, banned discrimination against LGBTQ people in the workplace.

Universal Giving Pandemic Response Act

On June 22, a bipartisan group of senators introduced the Universal Giving Pandemic Response Act, which would encourage individuals and families to donate more to nonprofits. Sens. James Lankford (R-Okla.), Chris Coons (D-Del.), Mike Lee (R-Utah), Jeanne Shaheen (D-N.H.), Tim Scott (R-S.C.), and Amy Klobuchar (D-Minn.) are co-sponsoring the bill, which builds upon the first-ever universal charitable deduction of $300 in the CARES Act, which passed in late March. The Universal Giving Pandemic Response Act would increase the above-the-line universal charitable deduction to one-third of the standard deduction—$4,000 for individuals and $8,000 for joint filers. Both itemizers and non-itemizers will be able to deduct these amounts from their taxable income. 

Applicable to tax years 2019 and 2020, this bill is designed to encourage giving because nonprofits are struggling to bring in revenue, both from small donors and government agencies. Though Giving USA’s annual report for 2019 notes increased giving from individuals, foundations, and corporations, the pandemic has introduced a large dose of uncertainty into the nonprofit sector’s development plans. The Universal Giving Pandemic Response Act will alleviate these worries and incentivize giving to nonprofits throughout the health crisis.

Proposal Announced for Main Street Loan Program for Nonprofits

In recent weeks, the Federal Reserve announced it will be seeking public feedback on a proposal to expand the Main Street Lending Program to provide access to credit for nonprofit organizations. As with the existing Main Street Lending Program, which targets small and medium-sized businesses, the proposed expansion would offer loans to small and medium-sized nonprofits that were in sound financial condition before the COVID-19 pandemic and could benefit from additional liquidity to manage through this challenging period.

Loan terms under the proposed Main Street nonprofit loans, including the interest rate, deferral of principal and interest payments, and five-year term, are the same as for Main Street business loans. The minimum loan size is $250,000 while the maximum loan size is $300 million. Principal payments would be fully deferred for the first two years of the loan and interest payments would be deferred for one year. Two loan options would be offered under the proposal. Borrower eligibility requirements for the proposed nonprofit facilities would be modified from the for-profit facilities to reflect the operational and accounting practices of the nonprofit sector and include:

  • Minimum of 50 and maximum of 15,000 employees
  • Financial thresholds based on operating performance, liquidity, and ability to repay debt
  • An operational history of at least five years
  • A limit on endowments of no more than $3 billion

More details can be found in this fact sheet on the expanded loan facility and this fact sheet on the new loan facility.

Loan forgiveness is not available (due to limitations in the statute) but the Alliance continues to advocate for this in the next COVID-19 legislative package, which is expected to start moving after the Fourth of July recess. The Alliance and many member organizations submitted comments to this program, and we anticipate more feedback from the Federal Reserve within the next month.

Independent Sector Survey Results on Midsize/Large Nonprofit Needs During COVID-19

Thank you to the many Alliance members that participated in the Independent Sector survey of larger nonprofits. This data will be very helpful as we move forward on an advocacy strategy. 

Revenue Impact

Due to the shutdown, revenue was lost from cancelled events and closed operations. Individual giving among respondents also took a hit. Overall, 83% of organizations experienced a reduction in revenue and contributions as of April 2020, compared to April 2019. Of organizations that saw a decrease, the areas with the biggest decrease were:

  • Earned revenue (83%)
  • Individual giving (53%)
  • Philanthropic grants (33%)

When asked about observed changes the organization has seen or expects for May 2020, a majority responded they have already seen or expect continued additional declines in revenue.

Operational Impact

Due to the shutdown and fewer available staff, many organizations were forced to close their doors or scale back services. However, 23% of organizations that remained operational reported an increase in demand for services. In response to the crisis, organizations reported taking the following actions (respondents could choose multiple options):

  • 71% reported reduction in services/available operations
  • 67% have furloughed employees (not working but still provide benefits)
  • 55% have closed offices
  • 51% have laid off employees
  • 30% have reduced employee pay and benefits

New Child Welfare Executive Order Announced

Last Wednesday, President Trump signed a new executive order on strengthening the child welfare system. This order does not appear to direct any new funds to states. In one section, it actually calls for stricter restrictions on federal funds. The order, however, lays out new technical assistance and data collection aimed at reducing the use of foster care. Below are some of the highlights, as summarized by The Chronicle of Social Change.

  • Kinship Care – The order references relative caregivers needing adequate support. It urges states to consider federal funds for kinship guardianship agreements. This model enables relatives to take permanent custody, with financial support, without the turbulence that can come with adopting the child of a loved one.
  • Aging Out – The order talks about ensuring support for youth aging out of foster care who experience homelessness or joblessness but was not very clear on the details.
  • Legal Representation – Calls for HHS to provide guidance to states regarding flexibility in the use of federal funds to support and encourage high-quality legal representation for parents and children. It goes beyond amending the federal manual and expresses the administration’s endorsement of this model, which was updated a few weeks ago. 
  • Data on Foster Families – Encourages HHS to build a more rigorous and systematic approach to gathering data for periodic review. The data points it specifically talks about in the order include demographic information for children in foster care and waiting for adoption, the number of currently available foster families and their demographic information, average foster parent retention rates, length of time foster parents remain certified, target number of foster homes needed to meet needs, and average length of time it takes to complete foster and adoptive home certification. 
  • Reasonable Efforts Review – Requests periodic review of how states perform in making reasonable efforts to prevent removal of children and reasonable efforts to secure them a permanent home *when necessary) through reunification, guardianship, or adoption. It states that the agency should penalize states that are failing to live up to these standards, which HHS has had on the books for a long time but rarely enforce.
  • Assessing Risk Assessment – Requires HHS within 18 months to aggregate all standards used by states to conduct risk and safety assessments, which are applied to child welfare cases with steep consequences, including the removal of children.

Source: The Chronicle of Social Change

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