On The Money: Coronavirus exposes scars of Great Recession | House, Senate return next week for next coronavirus relief bill | McConnell state bankruptcy remarks raise questions | Small business coronavirus loan program reopens

On The Money: Coronavirus exposes scars of Great Recession | House, Senate return next week for next coronavirus relief bill | McConnell state bankruptcy remarks raise questions | Small business coronavirus loan program reopens

<p><strong>Happy Monday and welcome back to On The Money</strong><span style=”font-weight: 400;”>. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.</span></p><p><span style=”font-weight: 400;”>See something I missed? Let me know at </span><span style=”font-weight: 400;”>slane@thehill.com</span><span style=”font-weight: 400;”> or tweet me </span><a href=”http://www.twitter.com/sylvanlane”><span style=”font-weight: 400;”>@SylvanLane</span></a><span style=”font-weight: 400;”>. And if you like your newsletter, you can subscribe to it here: </span><a href=”http://bit.ly/1NxxW2N”><span style=”font-weight: 400;”>http://bit.ly/1NxxW2N</span></a><span style=”font-weight: 400;”>.</span></p><p><strong>Write us with tips, suggestions and news: </strong><strong>slane@thehill.com</strong><strong>, </strong><strong>njagoda@thehill.com</strong><strong> and </strong><strong>nelis@thehill.com</strong><strong>. Follow us on Twitter: </strong><a href=”http://www.twitter.com/sylvanlane”><strong>@SylvanLane</strong></a><strong>, </strong><a href=”http://twitter.com/njagoda”><strong>@NJagoda</strong></a><strong> and </strong><a href=”http://twitter.com/nivelis”><strong>@NivElis</strong></a><strong>.</stro… BIG DEAL—Coronavirus exposes scars of Great Recession: </strong><span style=”font-weight: 400;”>The coronavirus and the desperate economic measures used to fight it are exposing some of the </span><a href=”https://thehill.com/policy/finance/494625-coronavirus-exposes-scars-of-g… style=”font-weight: 400;”>wounds inflicted during the Great Recession.</span></a></p><p><span style=”font-weight: 400;”>While some Americans may be able to recover quickly when the pandemic subsides, the outbreak poses bigger threats to vulnerable communities that didn’t benefit as much as others from the past 10 years of economic growth.</span></p><ul><li style=”font-weight: 400;”><span style=”font-weight: 400;”>The recovery from the 2007-09 financial crisis and recession paved the way to record lows in unemployment for African Americans and Latinos, with women exceeding men as a share of U.S. workers.&nbsp;</span></li><li style=”font-weight: 400;”><span style=”font-weight: 400;”>At the same time, the combination of slow wage growth and a massive rise in equity and housing prices widened both income inequality and the racial wealth gap.</span></li><li style=”font-weight: 400;”><span style=”font-weight: 400;”>More than a decade later, the pandemic is threatening to drive similar economic wedges between classes and races as the country braces for a grueling climb from the depths of the downturn.</span></li></ul><p><span style=”font-weight: 400;”>“These are not equalizing crises. These crises have only spread people further apart,” said Mehrsa Baradaran, a University of California, Irvine, law professor who studies banking law and financial inclusion.</span></p><p><span style=”font-weight: 400;”>I </span><a href=”https://thehill.com/policy/finance/494625-coronavirus-exposes-scars-of-g… style=”font-weight: 400;”>explain why here</span></a><span style=”font-weight: 400;”>.</span></p><p><strong><em>Unequal impact: </em></strong><span style=”font-weight: 400;”>As the U.S. inches toward reopening the economy, experts say that much of the risk in doing so will be borne by the most vulnerable Americans.</span></p><ul><li style=”font-weight: 400;”><span style=”font-weight: 400;”>A </span><a href=”https://thehill.com/homenews/state-watch/491518-black-latino-communities… style=”font-weight: 400;”>disproportionate number</span></a><span style=”font-weight: 400;”> of African Americans and Latinos have contracted and been hospitalized for COVID-19, an increasingly urgent focus for public health officials crafting the response to the pandemic.</span></li><li style=”font-weight: 400;”><span style=”font-weight: 400;”>Experts attribute the stark racial differences in coronavirus cases to the legacy of public policy decisions that have left communities of color with relatively higher levels of diabetes, hypertension and other </span><a href=”https://thehill.com/homenews/administration/491528-surgeon-general-says-… style=”font-weight: 400;”>risk factors for COVID-19 complications</span></a><span style=”font-weight: 400;”> — not the personal choices or health traits of those groups.</span></li></ul><p><span style=”font-weight: 400;”>The same communities facing the highest levels of COVID-19 cases are also less likely to be able to work from home or draw from savings to replace lost wages, potentially forcing at-risk individuals to make dangerous choices to stay afloat.</span></p><p><span style=”font-weight: 400;”>“These are individuals who are overrepresented in the types of jobs that don’t allow them to socially distance, so they’re making the unfortunate choice between their health for them and their families and a paycheck,” said Danyelle Solomon, vice president of race and ethnicity policy at the Center for American Progress, a liberal think tank</span></p><p><strong>LEADING THE DAY</strong></p><p><strong>House, Senate return to session next week to begin next coronavirus relief bill: </strong><span style=”font-weight: 400;”>The House will </span><a href=”https://thehill.com/homenews/house/494900-house-to-return-to-dc-next-mon… style=”font-weight: 400;”>come back into session</span></a><span style=”font-weight: 400;”> next week despite concerns about adhering to social distancing measures for the coronavirus pandemic in the Capitol, after Congress has been mostly on recess for the past several weeks.</span></p><p><span style=”font-weight: 400;”>Majority Leader Steny HoyerSteny Hamilton HoyerCoronavirus culture war over reopening economy hits Capitol Hill The Hill’s Morning Report – Presented by Facebook – House set to pass 3B COVID bill; Lawmakers jockey over next package House leaders enact new safety precautions for votes MORE (D-Md.) announced on a conference call with House Democrats that the chamber will come back into session on May 4.</span></p><p><span style=”font-weight: 400;”>The announcement came hours after Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellMnuchin: ‘If we need to spend more money we will, and we’ll only do it with bipartisan support’ Pelosi: Governors’ impatience ‘will help us get an even bigger number’ for state coronavirus funding Mnuchin: ‘You’re going to see the economy really bounce back in July, August, September’ MORE (R-Ky.) confirmed that the upper chamber </span><a href=”https://thehill.com/homenews/senate/494861-mcconnell-senate-will-return-… style=”font-weight: 400;”>would return the same day</span></a><span style=”font-weight: 400;”> and “modify routines in ways that are smart and safe.”</span></p><p><strong><em>Battle over next phase of coronavirus relief looms: </em></strong><span style=”font-weight: 400;”>Leadership in both chambers are already jockeying over the next coronavirus bill, which McConnell has vowed will not pass until all senators are back in Washington to discuss what should, or should not, be in it.&nbsp;</span></p><ul><li style=”font-weight: 400;”><span style=”font-weight: 400;”>McConnell took a shot at Democrats on Monday, saying Americans don’t need “tangential left-wing daydreams” and that lawmakers should not “get distracted by pre-existing partisan wish-lists or calls to paper over decades of reckless decisions that had nothing to do with COVID-19.”</span></li><li style=”font-weight: 400;”><span style=”font-weight: 400;”>Democrats have outlined a list of priorities for the next bill, including more help for state and local governments, food assistance and funding for vote-by-mail amid concerns that the coronavirus could prevent voters from wanting to turn out to polling locations in person.&nbsp;</span></li></ul><p><strong>Small business coronavirus loan program reopens under crush of demand: </strong><span style=”font-weight: 400;”>The Small Business Administration’s (SBA) emergency lending program reopened Monday to</span><a href=”https://thehill.com/policy/finance/494821-small-business-coronavirus-loa… style=”font-weight: 400;”> a crush of applications</span></a><span style=”font-weight: 400;”> as business owners hit by coronavirus restrictions scramble to secure aid before the new round of funding runs dry.</span></p><p><span style=”font-weight: 400;”>The SBA’s Paycheck Protection Program (PPP) began accepting new applications this week for an additional $310 billion in forgivable loans to small businesses with new rules and money set aside for certain groups in order to broaden the initiative’s reach.</span></p><p><span style=”font-weight: 400;”>But the agency’s electronic filing system crashed within minutes of the program reopening, as a week-plus of backlogged applications poured through, raising concerns about how long the second round of funding may last. </span><a href=”https://thehill.com/policy/finance/494821-small-business-coronavirus-loa… style=”font-weight: 400;”>I have more here</span></a><span style=”font-weight: 400;”>.&nbsp;</span></p><p><strong>McConnell state bankruptcy remarks raise constitutional questions:</strong><span style=”font-weight: 400;”> Municipal finance experts say that it may be unconstitutional for Congress to allow states to declare bankruptcy, and that even if it is constitutional, </span><a href=”https://thehill.com/homenews/senate/494612-mcconnell-state-bankruptcy-re… style=”font-weight: 400;”>it would be a bad idea</span></a><span style=”font-weight: 400;”>.</span></p><p><span style=”font-weight: 400;”>Experts on state and local government finances say that Congress may not have the right to grant states the ability to file for bankruptcy under the Constitution.&nbsp;</span></p><p><span style=”font-weight: 400;”>They also argued that bankruptcy wouldn’t be particularly helpful in addressing states’ coronavirus-related challenges.</span></p><ul><li style=”font-weight: 400;”><span style=”font-weight: 400;”>The U.S. bankruptcy code does not include provisions that allow states to declare bankruptcy.&nbsp;</span></li><li style=”font-weight: 400;”><span style=”font-weight: 400;”>Local governments have the ability to file for bankruptcy under Chapter 9 of the code, but only if their state authorizes them to do so.</span></li><li style=”font-weight: 400;”><span style=”font-weight: 400;”>Municipal finance experts also said that even if a law on state bankruptcies was found to be constitutional, it would be an unwise policy because it would make it harder for states to sell bonds used to finance capital projects.</span></li></ul><p><span style=”font-weight: 400;”>The Hill’s Naomi Jagoda </span><a href=”https://thehill.com/homenews/senate/494612-mcconnell-state-bankruptcy-re… style=”font-weight: 400;”>explains here.</span></a><span style=”font-weight: 400;”>&nbsp;</span></p><p><em><span style=”font-weight: 400;”>Read more: </span></em><span style=”font-weight: 400;”>President TrumpDonald John Trump US capping how much banks can lend as part of coronavirus emergency program Trump on ‘Noble’ Prize tweets: ‘Does sarcasm ever work?’ Pompeo plans to force extension of arms embargo against Iran: NYT MORE on Monday questioned why the federal government should provide financial relief to states and cities with Democratic leaders facing budgetary strains due to the coronavirus pandemic, </span><a href=”https://thehill.com/homenews/administration/494807-trump-asks-why-taxpay… style=”font-weight: 400;”>portraying it as a partisan issue</span></a><span style=”font-weight: 400;”>.</span></p><p><strong>GOOD TO KNOW</strong></p><ul><li style=”font-weight: 400;”><span style=”font-weight: 400;”>The Federal Reserve on Monday expanded the range of cities and counties eligible for relief from an emergency coronavirus lending program for local governments after </span><a href=”https://thehill.com/policy/finance/494919-fed-expands-emergency-coronavi… style=”font-weight: 400;”>criticism about the facility’s narrow reach</span></a><span style=”font-weight: 400;”>.</span></li><li style=”font-weight: 400;”><span style=”font-weight: 400;”>Stimulus checks to help Americans weather the COVID-19 pandemic are quickly becoming </span><a href=”https://thehill.com/policy/cybersecurity/494609-scammers-pounce-as-stimu… style=”font-weight: 400;”>a favorite target of scammers</span></a><span style=”font-weight: 400;”>, who see the newly rolled out funds as an easy way to profit during the ongoing crisis.</span></li><li style=”font-weight: 400;”><span style=”font-weight: 400;”>Markets have rebounded since an initial dive during the coronavirus pandemic, recovering more than half their losses and raising questions about their seemingly </span><a href=”https://thehill.com/policy/finance/494613-markets-dismiss-pandemic-fears… style=”font-weight: 400;”>oblivious reaction</span></a><span style=”font-weight: 400;”> to an onslaught of dire economic projections.&nbsp;</span></li><li style=”font-weight: 400;”><span style=”font-weight: 400;”>The Treasury Department and IRS have announced enhancements to a web tool that people can use to </span><a href=”https://thehill.com/policy/finance/494845-irs-makes-enhancements-to-coro… style=”font-weight: 400;”>check the status</span></a><span style=”font-weight: 400;”> of their coronavirus relief payment.</span></li></ul>