Schatz Introduces New Legislation To Provide Automatic Cash Assistance To Help Struggling Families Recover From A Natural Disaster Or Economic Crisis

WASHINGTON – Today, U.S. Senators Brian Schatz (D-Hawai‘i) and Jeff Merkley (D-Ore.) introduced the Family Crisis Cash Assistance Act. The legislation will create a new permanent program to help families struggling through a natural disaster or economic crisis with immediate cash assistance. As the COVID-19 pandemic has made clear, direct cash provides families with immediate relief and gives them the flexibility and choice to use on rent, food, or other expenses.

“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 U.S. 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 Representative Moore.

The United States is hit with more frequent and more severe natural disasters every year. 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. For those already struggling, natural disasters lower credit scores and increase debt collections, bankruptcies, credit card debt, and mortgage delinquencies and foreclosures. Economic crises also cause lasting damage. The 2008 financial crisis and resulting recession caused median household wealth to drop 39 percent between 2007 and 2010. This loss of wealth and increase in poverty disproportionately impacted younger, lower income, and minority households. There is mounting evidence that basic and quick cash assistance is more effective to support recovery.

The Family Crisis Assistance Act will create a new program under the Department of Health and Human Services (HHS) and provide grants to states. States will be asked to develop a distribution plan and will 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 is 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.

The Family Crisis Cash Assistance Act is supported by Prosperity Now, Economic Security Project Action, Children’s Defense Fund, the NETWORK Lobby for Catholic Social Justice, Children’s HealthWatch, the Friends Committee on National Legislation, Congregation of Our Lady of Charity of the Good Shepherd - U.S. Provinces, National Advocacy Center of the Sisters of the Good Shepherd, Young Invincibles, Supporting Our Mothers Initiative LLC, Western Center on Law & Poverty, Global Women’s Strike, Women of Color/Global Women’s Strike, National Welfare and Caregivers Working Group, Every Mother is a Working Mother Network, Payday Men’s Network, Kids Forward, Greater Hartford Legal Aid, and Center for Popular Democracy.

For a copy of the bill text, click here.

###