Legislation Seeks To Provide Automatic Cash Assistance to Struggling Families

US Sen. Brian Schatz. Courtesy photo.

US Senators Brian Schatz (D-Hawai‘i) and Jeff Merkley (D-Ore.) introduced a new legislation Friday that seeks to provide $2,000 monthly automatic cash assistance to struggling families. The Family Crisis Cash Assistance Act proposes the creation of a permanent program to provide immediate economic relief to families struggling through a natural disaster or economic crisis.

“During a crisis, we need to act fast to help families in real need. By making this process automatic and fair, we can quickly provide direct cash aid to the people who need it most,” said Senator Schatz.

“Our communities were already struggling in the face of this global pandemic when unprecedented wildfires hit and caused even more damage. The situation is nothing short of a crisis—families have lost loved ones, their homes, all of their belongings, and their jobs,” said Merkley. “When people lose everything, their needs are immense, and nobody knows better than they do what is most critical to get back on their feet. This bill would put cash in families’ hands when they need it most to secure food, shelter, and other immediate needs.”

Companion legislation was introduced in the House of Representatives by US Representatives Gwen Moore (D-Wis.), Bonnie Watson Coleman (D-N.J.), Val B. Demings (D-Fla.), Alcee L. Hastings (D-Fla.), Barbara Lee (D-Calif.), Jerrold Nadler (D-N.Y.), Eleanor Holmes Norton (D-D.C.), Bobby L. Rush (D-Ill.), Tim Ryan (D-Ohio), Gregorio Kilili Camacho Sablan (I-Northern Mariana Islands), Mary Gay Scanlon (D-Penn.), Jan Schakowsky (D-Ill.), Bennie G. Thompson (D-Miss.), and Rashida Tlaib (D-Mich.).

“Low-income families are disproportionately burdened during crises in our country. This has been only magnified during the COVID-19 pandemic. And, too often, the slow delivery of government financial relief falls short, causing people to fall deeper into financial distress. This legislation will make sure we have a mechanism for delivering cash relief quickly, before the next crisis upends the lives of countless individuals and families already struggling with financial insecurity. Economic downturns and natural disasters exacerbate struggles such as housing and food insecurity and it is precisely in response to these situations that we need to stand together,” said Rep. Moore.

Supporters of the legislation say existing disaster recovery programs are important, but they do not always reach low-income communities and communities of color, which suffer adverse impacts for years after the crisis.

The Family Crisis Assistance Act would create a new program under the Department of Health and Human Services and provide grants to states. States would be asked to develop a distribution plan and would be responsible for disbursing cash assistance to families and individuals with incomes at 200 percent of the Federal Poverty Line or below through a mandatory funding mechanism. The program phases out assistance gradually, ending at 300 percent of FPL.

Grants are available once one of the following automatic triggers has been met:

• A sudden increase in the state or national unemployment rate—the bill applies the Sahm Rule, i.e., an increase in the three-month moving average (six-month moving average for states) of the national or state unemployment rate by 0.5 percentage points or more relative to its low during the previous 12 months;
• A 20 percent increase in state unemployment insurance claims over three months; or
• A significant natural disaster, defined as a Stafford Act major disaster declaration where individual assistance is authorized at the county or state level for households in the affected area.

The cash assistance would be set at $2,000 a month for an individual, $3,000 for a family of two, and $500 more per additional member of the family, capped at $4,000 a month and adjusted for inflation moving forward. The assistance is not taxable nor can it be garnished. The program prohibits rules requiring work, participation in child support programs, an asset test, discrimination based on immigration status, or artificially limiting the length of eligibility.