The Economic Response to the Pandemic Proved We Can Have Nice Things

The Economic Response to the Pandemic Proved We Can Have Nice Things

The Economic Response to the Pandemic Proved We Can Have Nice Things

Biden is ending the Covid public health emergency, and with it will go some of the positive outcomes of the terrible pandemic.


During World War II, the United States faced a labor crisis. Young men were at war, and work was still needed at home. But the young women who could replace them in the factories were often busy looking after their children. In response, the US government offered child care to any community where women’s labor participation was needed for the war effort. The federal government allocated about $52 million, with $26 million added by the states, adding up to about $1.5 billion in 2023 dollars. Families paid 50 cents per day (or about $7 today), which also covered lunch and snacks. Around 600,000 kids received child care through this program.

And when the war ended, the US government abandoned this nearly universal child care program, and Americans have never seen anything like it on this scale since. The experience proved that universal child care was possible—even fiscally prudent, as the value of the labor to the economy greatly outstripped the costs. Yet we’ve never gone back to this. We have targeted support for some families, but no universal benefit that would revolutionize caregiving, parenting, and labor.

At the beginning of the pandemic in March 2020, President Donald Trump and the US Congress enacted a flurry of measures intended to soften the blow of the coming economic crisis. Just like the child care measures funded by the Lanham Act of 1940, the federal government launched us into a great experiment, pushing us closer than ever to achieving the most unlikely of outcomes: free college and universal health care. Over the past three years, tens of millions of Americans have not had to pay anything toward their student debt, and even more Americans have gotten health care through Medicaid and Children’s Health Insurance Programs (CHIP) without having to worry about maintaining eligibility.

Unfortunately, with President Joe Biden’s announcement at the end of January to formally end the public health emergency in May, these positive outcomes of a terrible pandemic will cease. For years, pundits—right-wing and liberal alike—have warned that making health care and education free would cost too much, crash the economy, and lead to laziness. Yet when we look at the actual outcomes of these three experimental years—under the most adverse circumstances—we see something different. Right now, we have reached the lowest percentage of Americans without health insurancein US history. At the same time, more than 30 million Americans have seen their credit scores rise as result of the loan repayment freeze, while having generally more money for essentials.

Recently, the Biden administration has been rightly pointing out that the economy is surging, but we’re not seeing enough progressive politicians consistently draw connections between these policies and the strong economy. As we confront losing these programs, it’s worth recognizing what we just achieved.

Let’s take “free college” first. A pause in debt repayments isn’t the same thing as zero-cost education, but for borrowers, the freeze has been transformative. It started in mid-March 2020, when President Trump suspended federal loan payments and interest for 60 days, a policy then extended for a year by the Coronavirus Aid, Relief, and Economic Security Act a few weeks later. President Biden has further extended the policy eight times. Currently, repayments will start either 60 days after his debt relief plan goes into effect (if it makes it through the Supreme Court) or at the end of August, whichever comes first. Meanwhile, nearly 37 million borrowers are not required to make payments. Their credit scores are improving dramatically, which has allowed more younger people to, for example, purchase houses. While some borrowers have spent the extra money on big-ticket purchases (good for the economy!), a majority have used the funds to pay off credit-card debt and for basic needs like housing, food, and utilities.

One article from the magazine Money, hardly a bastion of progressive thought, recounted the story of Jennifer Cardenas, a Latina first-generation college student who graduated from Columbia University. She has paid down her thousands of dollars of credit-card debt, bought a washing machine for her parents, and can now see her way clear to applying to law school. This is the kind of investment that pays off for all of society.

I have a personal stake here. As an undergraduate adviser at a public university in a history department, I know how fear of debt shapes student decisions about what to study. I’ve talked to hundreds of undergraduates over the years who have chased after a degree they thought would pay well, only to find out that being a mediocre accounting major, for example, is neither as satisfying nor lucrative as excelling in a field you love. There’s been a lot of angst lately about the decline of the study of history, angst I share. The best way forward for the humanities is to push for lowering the cost of college so people can study the topics they love without panicking about debt.

I also have a personal stake in Medicaid, because my son, an autistic boy with Down syndrome, is enrolled. Over the years, the experience of trying to keep him enrolled has required endless hours of paperwork, arguments, and stress. In fact, I have paperwork sitting in my inbox right now that I’m avoiding, because I know it will involve endless filling out of personal information just so the state can confirm, once again, that my son still has Down syndrome. But even if I don’t get it done in time, my county can’t boot my son off the program thanks to the policies enacted at the beginning of the pandemic. The Families First Coronavirus Response Act contained a provision that required states to shift all Medicaid programs to continuous enrollment (in exchange for more funding), meaning that anyone who was on Medicaid or the Children’s Health Insurance Program (CHIP) as of March 18, 2020, or who has become eligible since cannot be kicked out of the program even if their financial situation changes—or if they are late getting their paperwork in.

The paperwork problem is real. Millions of Americans every year are removed from Medicaid despite having been eligible because they didn’t receive forms (often sent in the mail to the wrong address), didn’t understand them, or were simply overwhelmed. Others lose coverage because they receive a temporary bump in income but quickly fall back under the cap as jobs end or circumstances change. This churn creates high administrative costs for the state, but, more importantly, it results in people losing the care they need.

But not so under the continuous enrollment policy. About 91 million Americans are now covered through Medicaid and CHIP, up from about 70 million before the pandemic. That includes over 41 million children. With well over a quarter of Americans now receiving free public care through Medicaid, added to Medicare, plans through the Affordable Care Act, and of course the continuation of private employment-based health care, we’ve reached the lowest percentage of uninsured Americans in our history. Only 3.7 percent of children lack insurance, down from 6.4 percent in 2020. Just as with “free” college, this isn’t truly “universal” health care, but it’s closer than we’ve ever been.

But the omnibus spending bill that Biden signed into law this last December ends the continuous enrollment policy by April 1—though it does include some new tools to strengthen the safety net. The Department of Health and Human Services estimates that over 8 million Americans will lose eligibility and hence coverage, which is fair enough, but many won’t seek out other insurance options. About 7 million will be caught up in the churn, losing coverage despite being in fact eligible. Out of these 15 million or so, 5 million will be children.

It doesn’t have to be this way. There’s no reason Democrats should agree to restart student loan payments without significant debt relief and investment in lowering college costs. There’s no reason anyone should be booted off Medicaid unless the state verifies that they are receiving health care through some other program.

But witness how we fumbled our way into (temporarily) free college and (nearly) universal health care, just as we did with universal child care so many decades ago. The programs cost a lot—the repayment freeze is projected to cost $195 billion by June and although the Medicaid disenrollment halt’s numbers aren’t in yet, that too must have cost the US hundreds of billions of dollars. And yet the boost to the economy has been worth it. The saving of lives through reliable health care, likewise.

And so there’s a lesson here. When the uninsured rate starts to rise again, as it will, and if the economy tanks because borrowers no longer have as much spending power, we’ll need to remember that these outcomes are choices. We’ve glimpsed what happens when people don’t worry about losing health care or can go to college debt free: They live longer, get the care they need, escape debt burdens, and are able to make better choices in their lives. Such programs should be the starting point for what we try to do next. Instead, we’re letting a better safety net slip from our grasp.

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