Bernie Sanders's Coronavirus Relief Package
Democratic presidential candidate Senator Bernie Sanders (I-VT) released his Priorities for the Next Coronavirus Relief Package, a plan to build on the $2.3 trillion CARES Act and address the public health and economic crisis from the novel coronavirus (COVID-19) pandemic, last week. Senator Sanders's plan as we understand it would maintain all wages at pre-crisis levels, send each person $2,000 per month for the duration of the crisis, cancel rent and mortgage payments for four months, cover out-of-pocket health care costs, provide aid to states, offer hazard pay to essential workers, and make other changes. Our very rough and conservative estimates suggest the plan would cost $5 trillion if the crisis lasts for four months and $12.8 trillion if it lasts for a year – roughly 60 percent of Gross Domestic Product (GDP) – on top of the roughly $2.5 trillion already spent. Assuming the Sanders plan replaces rather than adds to certain redundant elements from the CARES Act, the plan would cost $4 trillion to $12 trillion.
This policy explainer is part of US Budget Watch 2020, a project covering the 2020 presidential election. In the coming weeks and months, we will continue to publish analyses of candidate proposals that are having the greatest impact on the debate over our nation’s future. You can read more of our policy explainers and factchecks here. US Budget Watch 2020 is designed to inform the public and is not intended to express a view for or against any candidate or any specific policy proposal. Candidates’ proposals should be evaluated on a broad array of policy perspectives, including but certainly not limited to their approaches on deficits and debt.
What's in the Coronavirus Relief Plan and How Much Would it Cost?
Senator Sanders's coronavirus relief plan proposes a bold set of policy changes that appear to be designed largely to maintain or increase disposable income over the course of the crisis. By our estimates, these policies would cost the federal government more than $1 trillion per month. Prior to the current crisis or the passage of the $2.3 trillion CARES Act, CBO estimated the budget deficit would be $1 trillion for the entire 2020 fiscal year.
The level of detail in the current plan requires us to make a number of assumptions in order to estimate cost, and different assumptions could lead to drastically different estimates. To generate our preliminary numbers, we assumed most requirements for employers (maintaining pay, offering hazard pay, etc.) would be financed by the federal government in some form. We estimated the costs under two scenarios: a four-month crisis and a full-year crisis. Overall, our estimates are conservative, as they are more likely to underestimate costs than overestimate them.
Budgetary Effect of Senator Sanders's Coronavirus Response Plan
|Provision||4-Month Crisis||12-Month Crisis|
|Send Each Person $2,000 Per Month Until Crisis Ends||$2.6 trillion||$7.8 trillion|
|Maintain Wages at Pre-Crisis Levels||$1.0 trillion||$3.0 trillion|
|Provide Direct Fiscal Aid to States and Cities||$600 billion||$600 billion|
|Suspend Rent, Mortgage, and Certain Other Debt Payments for Four Months||$500 billion||$500 billion|
|Use Medicare to Cover Out-of-Pocket Health Expenses||$150 billion||$400 billion|
|Provide Paid Medical and Sick Leave for All Workers||$100 billion||$150 billion|
|Provide Hazard Pay to Essential Workers, Expand SNAP, and Enact Other Policies||$100 billion||$300 billion|
|Estimated Cost of Proposed Coronavirus Relief Package||$5.0 trillion||$12.8 trillion|
|Elements of CARES that May Be Redundant with Proposed Package||$1.0 trillion||$1.0 trillion|
|Net Cost, Assuming Package is Partial Replacement of CARES||$4.0 trillion||$11.8 trillion|
The most fiscally significant parts of Senator Sanders's coronavirus relief plan would:
- Send each person in the United States direct payments of $2,000 per month for the duration of this crisis. According to the proposal, these payments would go to "every person in the United States, including the undocumented, the homeless, the unbanked, and young adults," and we also assume they would be given for children. Given the U.S. population of roughly 330 million, this would cost about $2.6 trillion over four months and $7.8 trillion over the course of a year.
- Maintain pre-crisis pay for all Americans. The Sanders plan declares that "we must make sure that every worker in America continues to receive their paycheck during this crisis, retroactive to the beginning of the crisis." While the mechanism to achieve this goal is not entirely clear (the plan cites the grants given to airlines to maintain payroll as an example), we assume it could be achieved by efficiently distributing roughly one-quarter of pre-crisis compensation to employers or workers, at a cost of $1 trillion over four months or $3 trillion over a year. This is likely an underestimate, as most policies designed to achieve this goal would cover some wages that would be paid anyway.
- Provide $600 billion of direct aid to cities and states. The proposal would give funds to ensure state and local governments have the personnel and funding necessary to respond to the crisis. We assume the funding is on top of the $150 billion provided in direct grants to states and localities in the CARES Act. By definition, this costs $600 billion.
- Suspend rent, mortgage, medical debt, consumer debt collection for four months. Under the Sanders plan, monthly rent and mortgage payments would be canceled for four months, and these payments would not need to be paid after the crisis ends. Student loan payments would be canceled for a potentially longer period (the duration of the crisis). We assume the federal government would cover most of these costs and that it would do so for households but not businesses. Conservatively, this would cost roughly $500 billion.
- Cover out-of-pocket health care costs. The Sanders campaign calls for using "Medicare to cover all health care expenses'" and says that "Medicare must be empowered to pay all of the deductibles, co-payments and out-of-pocket healthcare expenses for the uninsured and the underinsured." We assume, conservatively, that this would mean most insurance would continue as it currently exists and the federal government would cover medical costs for those with no insurance or high out-of-pocket costs. We believe, very roughly, that this policy would cost $150 billion over four months and $400 billion over the course of a year. It is possible the Sanders campaign is actually calling on Medicare to cover more or even all health care costs (i.e., "Medicare for All"). In that case, costs would rise as high as $1 trillion over four months and $3 trillion over a year.
- Provide paid medical and sick leave for all workers. The Sanders plan would guarantee paid sick and medical leave to all workers. It is not clear if the additional leave would be funded by the government or by employers. We assumed the proposal would extend the federally-funded leave provided by the second coronavirus response bill (for employers with less than 500 employees and the self-employed) to also apply to large companies at a cost of nearly $100 billion for four months and $150 billion for a year.
- Provide hazard pay to essential workers, expand SNAP, and enact other policies. The Sanders plan would also provide hazard pay to essential and frontline workers such as nurses, delivery drivers, and grocery store employees. We assumed the additional pay would be federally funded and the proposal would be similar to one proposed by Senator Sherrod Brown (D-OH) and provide time-and-a-half pay to these workers. The proposal would also expand nutrition funding for "food stamps," food banks, and school lunches, and increase grants given to Washington, DC and U.S. territories to be on par with those offered to states. In rough terms, we believe these policies would cost about $100 billion over four months or $300 billion over the course of a year.
The Sanders plan also includes a number of proposals with relatively little or no direct fiscal implications, including using the Defense Production Act to direct the production of Personal Protective Equipment (PPE) and other critical medical supplies; directing the Occupational Safety and Health Administration to develop stringent emergency safety standards for health care workers, patients, and the public; a moratorium on evictions, foreclosures, and utility shut-offs; and cracking down on companies or individuals guilty of price gouging, hoarding essential supplies, or otherwise attempting to profit on a moment of national crisis. Furthermore, the Sanders plan would compel the Federal Reserve to establish a program specifically designed to provide state and municipal governments with fiscal support and budgetary relief.
Overall, our rough estimates find that Senator Sanders's coronavirus plan would cost $5 trillion if the crisis lasted for 4 months and $12.8 trillion if it lasted for a year. This would be the equivalent of roughly 60 percent of pre-crisis GDP over the relevant time periods.
Many of the proposals in the Sanders plan could be partially redundant with measures in the CARES Act. For example, the $2,000 monthly checks for everyone could replace the $1,200 one-time checks being sent to most people. Additionally, expanding unemployment benefits or establishment of a Paycheck Protection Program would be largely unnecessary if another program was maintaining wages at current levels. Overall, we estimate these potentially redundant provisions cost $1 trillion in the CARES Act. Thus, the total additional cost of the Sanders proposal could be $4 trillion for four months and $11.8 trillion for a year if it also removed those aspects of the CARES Act.
Where Can I Learn More?
- Senator Sanders's Campaign – Priorities for the Next Coronavirus Relief Package
- Senator Sanders's Campaign – Video Virtual Town Hall Announcing Proposal
- Committee for a Responsible Federal Budget – What's in the $2 Trillion Coronavirus Relief Package?
- Committee for a Responsible Federal Budget – A Visualization of the CARES Act
- UBI Center - How Universal Basic Income Can Keep Poverty From Rising Amid Covid-19
- Senator Sherrod Brown – Brown Calls for Pandemic Premium Pay and Health Protections for All Frontline Workers During Coronavirus Pandemic
- House Financial Services Committee – Waters Announces Committee Plan for Comprehensive Fiscal Stimulus and Public Policy Response to Coronavirus Pandemic
- Committee for a Responsible Federal Budget – How Much Would Sending People Checks Cost?
- Committee for a Responsible Federal Budget – Primary Care: Estimating Democratic Candidates’ Health Plans
With the 2020 campaign now in full gear, the presidential candidates are putting forward many ambitious proposals aimed at solving very real problems and concerns. The voting public deserves to know how these proposals would work, how much they would cost, and what they would mean for the debt we will be leaving to our children and grandchildren.
This policy explainer is part of our US Budget Watch 2020 series covering the 2020 presidential election. In the coming weeks and months, we will continue to publish analyses of candidate proposals that are having the greatest impact on the debate over our nation’s future. You can read more of our policy explainers and factchecks here.