Pelosi’s Plan to Help Those Who Don’t Want to Pay Bills Instead of Those In Need

This article was originally published in RealClearPolicy on June 2, 2020.

In May, the Democratically-controlled House of Representatives led by Speaker Nancy Pelosi (D-Calif.) passed the 1800-page Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. At an astounding cost of more than $3 trillion, the HEROES Act was the single largest spending bill in U.S. history. While the legislation was ostensibly designed to help the nation cope with the economic fallout from the pandemic, it is in fact nothing more than an ideological wish list of radical policies and bailouts for connected special interest groups. But some of the most obscure provisions — such as language barring debt collectors from disconnecting utilities — would have devastating unintended consequences. Congress should wipe the slate clean on these half-baked ideas and pass a clean relief bill that would help those struggling the most.

Despite its lofty name, the “HEROES Act” in reality lavishes bailouts to special interest groups instead of offering a hand up to ordinary Americans. There has been significant media coverage about the most egregious provisions, including an unnecessary billion-dollar bailout to the U.S. Postal Service and blank checks to chronically mismanaged states and localities. But the debt collection provisions have received little scrutiny, despite the potential problems posed by these proposals. The legislation dictates that, “no debt collector may during a covered period…disconnect or terminate service from a utility service, including electricity, natural gas, telecommunications or broadband, water, or sewer for nonpayment.” This part of the HEROES Act notably fails to target this relief to Americans impacted by the pandemic and unable to pay their bills as a result. Rather, these provisions cover anyone who does not want to pay — for any reason at all — and shields even the wealthiest Americans from being disconnected. And these “protections” are open-ended, considering that the “covered period” could go on for several months or even years depending on the severity of the pandemic and the ability of the world’s scientists to develop a viable vaccine.

Shielding everybody from Warren Buffett to Joe Exotic’s husband from utility bills would spell catastrophe for electric, gas, water, and telecommunications services, which rely on regular revenue to finance their operations. These companies and non-profit organizations have continued to shoulder large, fixed infrastructure and maintenance costs, while facing declining revenue from the COVID-19 economic crisis. Millions of shuttered businesses are no longer keeping their lights on, resulting in difficult choices for thousands of utility operators. While targeted relief makes sense for closed restaurants and retail stores, and utilities are already voluntarily assisting with this, the HEROES Act bizarrely frees everybody from normal payment obligations.

If and when these policies succeed in bankrupting utilities, it will be taxpayers who pay the price. A wave of utilities going belly up would force the federal government — and taxpayers by extension — to spend tens of billions of dollars to keep the lights on and water flowing for households and businesses. Taxpayers already face a $4 trillion deficit load for the year, and disastrous debt collection provisions would only deepen the hole.

If Congress truly wants to target utility-related aid to help those in need, there’s no need to reinvent the wheel. Programs already exist to help people pay their utilities if they lack the financial resources. The Low-Income Home Energy Assistance Program (LIHEAP) has been around since the Reagan era and could surely be updated to assist people struggling from the pandemic. Improving LIHEAP would help Americans impacted by COVID-19 pay their bills and ensure that the people applying for the assistance are genuinely struggling.  Similarly, state energy authorities have the ability to tailor policies based on the conditions in their own states, rather than a one-size-fits-all “solution” which doesn’t take local conditions into account.

Policymakers should be looking for ways to help struggling households manage this tragedy without bizarre, bank-breaking provisions that have nothing to do with the Coronavirus. Congress must reject reckless debt-forgiveness policies, and instead focus on real relief for struggling Americans.