Congress can (and should) enact a child allowance through budget reconciliation

Last week, Senate Parliamentarian Elizabeth MacDonough effectively vetoed Democratic plans to enact a $15 minimum wage as part of the COVID-19 reconciliation bill. Now, she may be on the cusp of wounding another major element of that bill: its program to send monthly checks to families with children. According to several senators, “MacDonough[ ] might strike the monthly payment feature this week by deeming it improper according to obscure Senate rules.”

Striking out monthly payments would be a major blow to families counting on the American Rescue Plan to deliver some measure of financial security. And it would also be completely uncalled for under Senate rules.

At issue is the plan by the Biden administration and Democratic members of Congress to significantly expand the Child Tax Credit and convert it into something akin to a child allowance (the subject of a recent panel led by ACS’s New York Lawyer Chapter). Under the American Rescue Plan, families would receive up to $300 each month this year for every child under six years old, and $250 per month for children ages 6-17. As President Biden has said, “If we get this done, it will cut child poverty in half.”

That would be a transformational accomplishment. And the monthly element of the plan is particularly important to its real-world impact on families -- monthly checks would simply be worth more to families than a once-a-year reduction in their tax liability. In their 2015 study of low-income families It’s Not Like I’m Poor, researchers Sarah Halpern-Meekin, Laura Tach, Kathryn Edin, and Jennifer Sykes found that families are forced into a boom-and-bust cycle, where they scrape by for most of the year until they claim benefits for working families -- such as the Child Tax Credit and the Earned Income Tax Credit -- during tax season. For these families, “[g]etting into debt and trying to dig out of it were near-universal experiences.” One study found that more than 80 percent of families receiving the EITC fork over some of their refund to pay down debt and overdue bills.

The status quo provides one month of feast and eleven months of famine based around the tax calendar. But paying out the government’s family benefits throughout the year rather than as an annual lump-sum refund would help lift more people out of poverty year-round. A 2014 study found that in comparison to those receiving a lump-sum tax credit refund, families who received advance periodic payments experienced improved financial stability, stress levels, and overall mental health. Advance-check recipients were also better able to stay out of debt, build savings, reduce their reliance on payday loans, and pay far fewer late fees in comparison to those receiving a single lump sum.

The upshot is that by withholding tax credits until filing season, the government forces families into debt and inflicts financial and emotional stress upon them. This imposes a scarcity mindset on low-income families, where poverty itself taxes their mental bandwidth, impedes effective decision-making, and takes a general toll on their psychic wellbeing. Researchers Sendil Mullainathan and Eldar Shafir have found that boom-and-bust cycles -- where people receive a large share of their income in a single lump sum -- produce these very harms associated with conditions of scarcity.

Monthly benefit payments would help combat these harms. Researchers have found that expansions of Canada’s child benefit -- which is paid out monthly instead of annually -- have led to improved health outcomes for children and higher test scores. That type of program would make a huge difference in the United States, where our abysmally high child poverty rate has been shown to impede children’s ability to learn and develop, and warp their physical brain composition, among other documented harms.

This all explains why monthly payments are so important to American families. But it’s also why monthly payments should easily pass muster under the Senate’s budget reconciliation rules. Budget reconciliation is the fast-track legislative process that allows the Senate to avoid the sixty-vote filibuster threshold to pass spending bills with just 51 votes (or 50 votes plus a vice-presidential tiebreaker). The limitation is that reconciliation can only be used for legislation with an impact on the federal budget, and excludes provisions that are “merely incidental” to budgetary purposes.

There’s no doubt that the American Rescue Plan’s increased value of the Child Tax Credit impacts the federal budget. And paying out those benefits on a monthly basis is hardly “incidental” to the budget either. Monthly payments are instead a way for Congress to ensure that benefits provided to families have their maximum impact. They allow the government’s dollars to most effectively alleviate the harms associated with poverty -- the strained mental health for families, jeopardized maternal health for new parents, deficient physical health for children, and more. These health gains in turn may well reduce federal spending on health care programs like Medicaid and CHIP.

Monthly payments to families should easily meet the standard for Senate budget reconciliation. And this is only an issue because the Senate refuses to do away with minority rule enshrined by the filibuster’s sixty-vote requirement for most legislation. But an end-run around the filibuster to create a child allowance is a worthy goal, and would have significant benefits for the families who need it the most.

Joel Dodge is a Staff Attorney for Judicial Strategy at the Center for Reproductive Rights, Lecturer in Law at Columbia Law School, and Co-Chair of ACS New York Lawyer Chapter.

Employers and Covid Vaccines – What’s Legal and What’s Not?

As the vaccines roll out and hopes rise about a return to pre-pandemic life, the reluctance of some to get the vaccine has led to questions about what employers can do to either mandate or encourage vaccination.  While it is far too early for any judicial decisions on the issue, Guidance from the Equal Employment Opportunity Commission (“EEOC”) provides some assistance in making the determination. The EEOC’s Guidance is not binding on courts, but may be considered by the courts because of the EEOC’s role in enforcing the relevant laws.  There is some case law regarding mandatory flu vaccines as well, which is largely consistent with the EEOC Guidance.

In general, the guidance indicates that mandating vaccines is lawful, but requires accommodation of individuals whose disabilities or religious beliefs would prevent vaccination.  In addition, depending on the vaccine provider, the questions that are asked before vaccination may constitute a medical exam, which the employer would have to justify under the Americans with Disabilities Act (“ADA”) if covered by the statute.  Providing incentives for vaccination instead of a mandate might also implicate the ADA.  Employers implementing vaccine programs must carefully consider their approach to avoid running afoul of legal protections for employees.

Employers that require vaccination must reasonably accommodate employees who have disabilities that prevent vaccination, unless the employer can establish that accommodation would cause undue hardship.  Undue hardship under the ADA is defined as “significant difficulty or expense.”  Under the ADA, the determination of the reasonableness of any accommodation and of whether undue hardship exists is always case specific.  Nevertheless, one can imagine accommodations that might be reasonable such as telecommuting, wearing personal protective equipment, or changing the structure of the workplace or job to minimize contact with other people. Some employers may be able to establish that having an unvaccinated employee in a job that requires close contact with other people poses a significant risk of viral transmission that cannot be ameliorated by other means, i.e., that the employee poses a direct threat to health and safety. For other employers, the accommodations will be sufficient to reduce or eliminate that risk.  The availability of accommodations should always be discussed with the requesting employee, as the law requires the parties to engage in an interactive process to ascertain the possibility of accommodation.  Further, the employer is permitted to request medical documentation of the need for an alternative to vaccination as an accommodation.

Like employees with disabilities, employees with sincere religious beliefs that preclude vaccinations must be accommodated, unless the employer can show that there is no accommodation that does not cause undue hardship.  Undue hardship for religious accommodations is easier for an employer to demonstrate, as it is anything more than de minimis cost or burden. If personal protective equipment and social distancing would reduce or eliminate the risk and is consistent with job responsibilities, an employee who brought and wore his or her own mask could probably be accommodated without undue hardship.

These determinations regarding accommodation will almost certainly be influenced by evolving medical knowledge about the pandemic. At present, it is not clear that vaccination eliminates the risk of transmission so if that is the concern, personal protective equipment may well be deemed equally protective. If scientific knowledge were to change, however, the accommodation requirement will change with it.

If no reasonable accommodation is possible and the unvaccinated employee poses a direct threat to self or others in the workplace, the employee may be barred from the workplace.  The determination of direct threat is guided by the statute and regulations. A direct threat is defined as a “significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.”  Like reasonable accommodation, the determination of whether someone poses a threat must be individualized to the person and the workplace, and must be based on current medical knowledge. The regulations also contain factors that guide the determination, including the duration of the risk and the nature, severity, likelihood and imminence of the potential harm. Finally, while the individual posing the threat may be prohibited from coming to the workplace, before any discharge, the employer should be careful to insure that the termination does not violate any existing laws, including those that may be enacted as part of the next Covid relief bill.  For example, while the specialized leave provisions for Covid enacted in 2020 have expired, leave requirements may be reenacted. In addition, in light of the understandable suspicion that some people of color have of the medical community, terminations may fall more heavily on certain racial or ethnic groups, raising questions about discrimination.

According to the EEOC, employers who mandate the vaccine and provide the vaccine to their employees or employ a contractor to do so will be conducting a medical exam or inquiry under the ADA when they ask the pre-vaccination questions designed to ensure that the vaccine is safe for that individual.  Such inquiries of employees must be justified as “job-related and consistent with business necessity.” The guidance points out that to satisfy this test, the employer must show that an unvaccinated employee would pose a direct threat to self or others.  Voluntary vaccines provided by the employer do not implicate this statutory provision nor does a requirement that the employee obtain the vaccine from any available source. The difficulty with the latter is that in many places, obtaining a vaccine remains challenging without, and maybe even with, employer assistance.

Given the legal uncertainties surrounding mandatory vaccines, it is appealing to employers to offer incentives for the vaccine without requiring it, and some employers are choosing that route. Vaccine incentives come with their own legal uncertainties, however. If the incentive is substantial, it may raise the question of whether the vaccine is truly voluntary or effectively mandatory. The EEOC has addressed employer wellness programs in the context of the ADA and there is a possibility that a vaccine incentive program might be deemed a wellness program. ADA regulations require that wellness programs be voluntary if they require disclosure of any disability-related information, and as discussed above, the administration of the vaccine does.

In 2016, the EEOC promulgated regulations on wellness programs which limited the size of any incentive to 30% of the cost of self-only coverage for the employer’s lowest cost major medical plan. These regulations were legally challenged, however, and did not ultimately become effective. In January 2021, the EEOC issued a new proposed rule on wellness programs but its publication has been delayed by the Biden administration. It is unclear whether the proposed rule will be published in the Federal Register for comment as is, revised, or simply withdrawn. The as-yet-unpublished rule indicated that only small incentives were allowed in wellness programs that required response to disability-related inquiries.  But as indicated, there is no certainty that a vaccine program will be considered a wellness program. Regardless, the law relating to wellness programs certainly suggests that any incentive to vaccinate should not be too generous.

Finally, any incentive program, like a mandatory vaccine, may require reasonable accommodation for employees who cannot receive the vaccine because of a disability.  Employers should be prepared with alternative ways for such employees to earn the incentive. A Kroger program, for example, allows employees to earn the $100 vaccine bonus by taking an educational class.  Education about vaccine safety or paid time off to obtain the vaccine may be other ways to encourage employees to get vaccinated.

The Covid-19 pandemic has raised a host of new legal issues and caused us to rethink accepted ways of doing and being. While we all long for a return of the days when we can go to shops, restaurants and gyms without fear, employers should carefully consider what approach to take to the vaccines, in light of the ongoing legal uncertainty.

Black History Month: Continue the Conversation

Headshot of Aaron Ford
Aaron D. Ford, Nevada Attorney General

Every February, my family and I celebrate Black History Month. For the Fords, Black History Month begins with a conversation. We discuss the pertinent happenings of our time; we talk about great black leaders; and perhaps most importantly, we take the time to thank and recognize those around us who in different ways have been a part of black progress.

For me, Black History Month isn’t just a date to calendar every year. This month is rooted in black struggle. A few years ago, I learned that an ancestor of mine, William Berry, was on the auction block in Fordyce, Arkansas. That day he protested his own sale saying, “I will not be treated like cattle. You will not sell me and separate me from my family.” Unfortunately, his words were not met with mercy. Instead, he was killed on the spot and his three young sons were sold to slavers in Texas. One of those sons is my great, great, great grandfather. This story of my ancestry really gave new meaning to my plight for equality. In a time when black men, women and children were silenced, William stood up for his own humanity. He said ‘no’ to slavery and inequality, even at the expense of his own life.

I was elected to office about two years ago as the first African American attorney general in Nevada and the first African American to hold statewide constitutional office in Nevada. It is, without a doubt, the honor of a lifetime, and I don’t take my representation in the African American community lightly. William’s story has become a mantra for me in my day-to-day work. It serves as a reminder of where I came from—both as an African American and as a Ford. But it also reminds me that there are so many individuals, families and communities that struggle and that are vulnerable. Irrespective of what backlash I may face for my choices and decisions while in office, I am determined to stand up for those who need a voice and a platform, and am determined to seek out justice at every available corner.

In thinking about what I wanted to share with you about Black History Month, I went back to the roots of black history to Carter G. Woodson who many consider to be the “Father of Black History.” Born in 1875 to former slaves, Woodson was the second African American to earn a doctorate from Harvard. He was unable to attend school for much of his childhood and began high school at age 20. He had to put off schooling while he worked in the coal mines of West Virginia, and went on to earn degrees from Berea College, the University of Chicago and Harvard. In 1926, he created what he called “Negro History Week”, before later going on to lobby extensively to establish Black History Month. Woodson believed that appreciating a people’s history was a prerequisite to equality. He wrote, “If a race has no history, if it has no worthwhile tradition, it becomes a negligible factor in the thought of the world.” What Woodson is so eloquently saying is that no amount of legislation can grant you equality if a country doesn’t value you.

Black History Month is more than just a celebration and it’s more than a commemoration of African American contributions to this country. Black History Month at its core was an effort to establish equality: an effort to highlight and encourage diversity. A time to reflect and think ahead. Black History Month is a reminder that differences should be celebrated not segregated. This month puts a spotlight on the great pioneers before us who have shaped our lives and communities: Rosa Parks, Nelson Mandela, Malcolm X, Maya Angelou, and so many more. And they have provided us with the tools we need to move forward as a community under one human race. Here are some of their words and I hope they will inspire your action.

  • “If you want the cooperation of humans around you, you must make them feel they are important—and you do that by being genuine and humble.” –Nelson Mandela
  • “You must never be fearful about what you are doing when it is right.” –Rosa Parks
  • “When ‘I’” is replaced by ‘we’ even illness becomes wellness.” –Malcolm X
  • “If my mind can conceive it, and my heart can believe it, then I can achieve it.”  –Muhammad Ali

Diversity must always be a conversation that we continue in our daily lives. It’s about what we all bring to the table regardless of our race, age, background and experience. Together, we bring a lot to the table. When I think about Black History Month, I think about love, honor, respect and possibility. As Nevada’s attorney general, I have made it a focus of my administration to protect and advocate for Nevadans of every age, color, creed and background. I use the term “Nevada Family” broadly—whether you’re a three generation Nevadan or you moved to Nevada a week ago, you’re Nevada family. Whether you’re a single mother with two kids or a family of nine, you’re Nevada family. Regardless of whether you’re affluent or indigent, you’re Nevada family, and my office stands ready to help and support you.

To all of you taking the time to read this article, I thank you. Change and diversity require learning and education. They require a conversation—many in fact. And finally, they demand action. Black history should be shared, celebrated and discussed this month and every month, and I hope you will join me in doing just that.

Aaron D. Ford is Nevada's 34th Attorney General and the first African American to hold statewide constitutional office in Nevada.

 

First But Not Finished...

In this moment in my life—and this Black History month especially—I find myself focusing and reflecting on firsts. I am a first born child of a single mother. I am the first college graduate on my mother’s side. I am a proud member of the first sorority for African American college women. I am the first lawyer in my family. I am the first judge in my family. Being first is such a running theme in my life that my dad often greets me lovingly as “Hello my first!” as if “first” is the name that appears on my birth certificate. I assure you … it does not!

I am a recently elected African American woman judge in Texas. The 2018 election was not my first rodeo, however. Like so many other firsts, my successful journey to the bench involved many hurdles (I am a former hurdler and hurdle coach currently, so settle in for a slew of hurdle analogies). No one—not even myself—would have ever predicted that I would eventually become a judge. Given my background, it was hard enough to envision myself as a lawyer.

I shelved the dream of becoming a judge early in my legal career, more than twenty years ago, when I fully understood how you really become a judge in Texas. I did not have the generational Texas family history, wealth, or connections to make it happen. With the dream shelved, I turned my focus on trial experience, partnership election, community service, and family. It was not until someone approached and encouraged me to take my dream off the shelf in 2009, and later in 2013, that I first ran for judge. I campaigned hard in 2014 and crisscrossed the 1,778 square miles of Harris County. I lost.

Losing was painful. However, like an inevitable fall or scrape on a hurdle, you have to right yourself quickly, gather courage, and tackle the next inevitable hurdle to the finish. After grieving my loss and giving my family time to recover from politics, I ran again in 2018 and won. I am fortunate to be a part of the history making diverse group of women judges campaigning together known as the “Houston 19.” With our election, we filled every type of judicial seat in Harris County, except for probate, with experienced and qualified African American women judges. Like my own court, many of the new judges were the first in their court. People across America and beyond shared in this historical moment (I saw a self-printed t-shirt of the Houston 19 on a stranger in New Orleans). And, hopefully, we inspire girls and African American children to have the courage to never shelve their dreams and to make necessary changes to the status quo.

Focus on First 

Every single day, I am incredibly honored by and thankful for the awesome and unique privilege of serving as the first African American judge of a 124-year-old district court. I also focus on other firsts such as Thurgood Marshall, who became the first African American Supreme Court justice in 1967. I focus on Jane Bolin, who became the first African American woman judge in the United States in 1939. I focus on Alice Bonner, who became the first African American woman state judge in Harris County, Texas in 1979. I focus on Vanessa Gilmore, who became the first African American woman federal judge in Texas in 1991.

Why focus on the first? Because the particular change brought on by the infusion of judges with the uniquely African American and female experience and perspective is important—and very much needed in our justice system. The mere accomplishment of being the first to change the status quo, immediately changes what we as a society believe is and should be possible.

As a college hurdler, the first hurdle was the most important hurdle to set the pace and tone of your race. Judges are the ultimate interpreters of the rule of law, Constitution, and the independent third branch of government, and as such, they set the tone and pace for the United States of America’s achievement of one of its highest ideals—justice for all. The first judges courageously set and changed the tone and pace of justice in American society. Most of my lawyer experiences in court were very rarely in front of an African American woman judge or even a judge who I believe knew and understood the experiences of African American, female, or poor people.

Then, Focus on the Finish

The work toward achieving a fair, equitable, and just judicial system is not finished. Diverse judges can lead the way in making the system fairer by ensuring all litigants have as much notice as possible to exercise their rights in court. Diverse judges can ensure the equal application of the law to claims or defenses from the richest litigant to the poorest litigant. Diverse judges can also make sure that justice contemplates and includes all by making sure access to the justice system is not limited by the color of a lawyers or litigants’ skin or the lack of resources available to them.

Because of my uniquely African American female experience, I am specially poised to bring positive change to the judiciary in Harris County and Texas. As is my duty as presiding judge, I focus on making sure our trials are devoid of bias—both explicit and implicit—toward litigants, lawyers, witnesses, and participants. I also focus on making sure litigants not represented by counsel are given as much notice about their case as possible. We have increased this particular effort because of the pandemic and the judiciary’s move to electronic, video hearings and cancellations of in-person appearances.

On the rare occasion that I have minors in my court (I do not have family law cases), I take the opportunity to encourage the minors to become lawyers and judges and allow them five minutes of fame to try on my robe, take pictures, and command “order in the court” with my gavel! Given the pandemic, this action has turned into an open invitation to visit the Court when the courts are freely open to the public. I probably enjoy it more than the minors, but I hope they remember it as a positive experience in the courtroom and, because of it, return as lawyers and judges someday.

The future is why the focus on the finish is important. As our newly elected first African American woman vice president Kamala Harris proclaimed, “I may be the first, but I will not be the last.” I hope to leave the court, the judiciary, and this world better than I found it. One hurdle at a time.

The U.S. Rejoins the Paris Agreement: Symbolism or Success?

On Inauguration Day, one of President Biden’s first acts was signing an order enabling the United States to re-join the Paris Agreement on climate change. With the stroke of a pen, President Biden signaled to the international community that after four years of isolationism under former President Trump, the U.S. was ready to reassume its global leadership role.

The United States’ re-entry into the Paris Agreement is not just symbolically important. In fact, it is critical to the treaty’s success and to the global community’s ability to mitigate the disastrous effects of climate change. Turn on the news on any given day and you can see the catastrophic consequences of extreme weather, such as floods, droughts, severe heat, or most recently, Arctic temperatures in southern states. Climate change also has disproportionate impacts on vulnerable and marginalized communities, raising environmental justice concerns.

U.S. leadership on global climate change is crucial because the Paris Agreement is structured around voluntary targets and peer pressure.  Each country sets its own goals, which are called “Nationally Determined Contributions” (NDCs). Thus, when President Trump railed against the “unfair economic burden” of the Paris Agreement, he was actually criticizing the targets set by the Obama administration. When he complained that the Agreement unfairly gave China an advantage, what he really meant was that China’s voluntary targets were less ambitious than those of the U.S.  In fact, President Trump arguably could have kept the U.S. in the Paris Agreement but submitted a less stringent NDC that was more in line with the goals of China.

The Paris Agreement operates on peer pressure because the only internationally mandated rules relate to the disclosure and monitoring of the voluntary national targets. The parties hoped that a transparent system for accountability would motivate nations to “ratchet up” the ambition of their goals. By withdrawing, Trump dis-incentivized ambitious climate targets and created a leadership vacuum that other nations tried to fill.

For those familiar with the history of international climate policy, the U.S. withdrawal from the Paris Agreement felt like déjà-vu. Two decades earlier, the failure of the U.S. to join the Kyoto Protocol to the U.N. Framework Convention on Climate Change, an international treaty intended to reduce global greenhouse gas emissions, had disastrous consequences. Without U.S. leadership, it took much longer for the treaty to enter into force. The absence of U.S. participation also encouraged defection from the Kyoto Protocol’s targets.

President Biden has sought to turn the tide by making climate change a priority for his administration. He issued several important executive orders, including on Tackling the Climate Crisis at Home and Abroad and on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis. These orders highlight that climate change is a multi-faceted issue with national security, economic, public health, ecological, and environmental justice dimensions. In addition, President Biden has appointed former U.S. Secretary of State and U.S. Senator, John Kerry, as the Special Presidential Envoy on Climate, making it a cabinet-level position on the National Security Council.  On Earth Day this year, April 22, President Biden will also host a Leader’s Climate Summit.

The U.S. must now lead by example and submit an ambitious new Nationally Determined Contribution under the Paris Agreement.  Unfortunately, the widespread rollback of environmental policies by the Trump administration means that this will not be easy. President Trump undermined just about every initiative that the Obama administration relied upon in its initial Nationally Determined Contribution. These included rollbacks on clean power, vehicle fuel efficiency, energy efficiency for appliances and buildings, and on methane emissions. The Obama administration also hoped to curb highly potent greenhouse gases known as hydrofluorocarbons (HFCs), but the D.C. Circuit, in an opinion written by now-Justice Kavanaugh, limited the EPA’s ability to do that. In rare good news, however, Congress adopted a phase-down of HFCs as part of its 2020 year-end omnibus bill.

The Biden administration can also build on the efforts of states and cities that sought to fill the global leadership void on climate change in the Trump-era. Many blue states played a key role in slowing down Trump’s deregulatory bonanza through litigation filed by state Attorneys General, which often pointed out procedural and administrative law missteps. In addition, many states and cities pledged to uphold the Paris Agreement, thereby acting as subnational “norm sustainers” of international environmental law. For example, when a bi-partisan coalition of states called the U.S. Climate Alliance pledged to benchmark their own progress on the U.S. targets under the Paris Agreement, they signaled to other nations that a significant portion of the United States was still committed to the climate treaty’s goals.

The Trump administration sought to stifle these state-led global efforts. For example, in the fall of 2019, the Trump administration sued California over its linked cap-and-trade program with Quebec. The federal government alleged that the cross-border agreement was an unconstitutional treaty or compact, and that it was preempted by federal action, including by Trump’s withdrawal from the Paris Agreement. In its pleadings and briefs, the Trump administration also raised concerns about a host of other state activities on global climate change, including the creation of the U.S. Climate Alliance and statements by state leaders pledging to uphold the Paris Agreement.  Nonetheless, the district court ultimately upheld the constitutionality of California’s cap-and-trade program with Quebec. This litigation underscored Trump’s desire to squelch any and all state efforts on global climate change.

But, what goes around, comes around. As the Biden administration looks to implement its own ambitious environmental goals, it will no doubt face challenges from red states. Indeed, Obama’s signature Clean Power Plan was immediately challenged in court. It was left in legal limbo until it was eventually repealed and replaced by Trump’s Affordable Clean Energy rule. That rule, however, did not stand up in court. On January 19, 2021, the U.S. Court of Appeals for the D.C. Circuit vacated the Affordable Clean Energy rule on the grounds that it “hinged on a fundamental misconstruction” of the Clean Air Act. The court did not expressly re-instate the Clean Power Plan but instead remanded to the Environmental Protection Agency for further proceedings.

If there is one lesson that we can learn from the past two decades, it is that the executive branch cannot go it alone on climate change. President Biden needs to prioritize working with Congress to pass comprehensive climate legislation. Agency action premised on existing statutory authority, like the Clean Air Act, will almost certainly be subject to greater legal challenge. Moreover, as the federal courts have become increasingly conservative, judges may be more skeptical of agency deference on environmental issues. The last serious effort at passing comprehensive climate legislation in 2010 failed. Special Presidential Envoy for Climate John Kerry was a key member of that Senate coalition and should understand this first-hand.  The time to act on climate legislation is now.

It is not yet clear whether the United States’ re-entry into the Paris Agreement on climate change on February 19, 2021 will be remembered as a mere symbol of our country’s renewed aspirations of global leadership or as a moment when we began to make real progress in addressing the climate crisis. As Robert Putnam’s famous two-level game theory posits, domestic politics and international relations are often inextricably entangled, such that leaders must “strive to reconcile domestic and international imperatives simultaneously.” In other words, the U.S. will only be able to catalyze meaningful global action on climate change if it leads by example and reduces domestic greenhouse gas emissions here at home. If the climate crisis has taught us anything, it is that we are all connected.

Correcting Past Mistakes: PPP Loans and Black-Owned Small Businesses

We may be nearing the end of Black History Month but there are always lessons to be learned about the disparate racial impacts of federal programs. There is always time to rectify past mistakes, particularly recent ones. As was recently announced, the Biden Administration is taking steps to more equitably administer the Paycheck Protection Program, but it must do more to reach Black-owned small businesses in particular.

Failing to Reach Black Communities

The CARES Act and Paycheck Protection Program & Healthcare Enhancement Act funded 5.2 million loans, worth $525B from April 3 to August 8, 2020. This money failed to reach Black communities. Data analyzed by the Associated Press shows that nearly twice the number of PPP loans were approved for business owners living in the 20% of zip codes with the greatest proportions of white residents than were approved for business owners living in the 20% of zip codes with the smallest proportions of white residents. Another post-mortem study of PPP loans found that the success rate of white applicants was 60% compared to a success rate of 29% for Black applicants.

The data is unsurprising. Structural racism pervades our financial institutions; while administered by the Small Business Administration, PPP loans are distributed primarily through banks, with the top lenders being large commercial banks, that have a long history of reserving their services for white people and white communities while excluding people and communities of color. Rather than grapple with this structural inequality, Senator Marco Rubio, then Chair of the Senate Committee on Small Business and Entrepreneurship, refused to require the SBA to collect demographic information from borrowers. As a result, 75% of all first- and second-round PPP loans did not include the race of the business owners applicants.

Early Data on Third PPP Loans Not Promising

Despite attempts to rectify the failure of the first- and second-round PPP loans to reach Black-owned businesses, third-round PPP loans have not yet proven more successful in breaking down racial barriers. PPP lenders are still not required to collect demographic data from borrowers. The third round of PPP loans began being disbursed on January 11, 2021. Financial institutions funded 1.8 million PPP loans worth $100B from the start of 2021 through February 19, 2021. This third round set aside at least $15 billion for small community banks, credit unions, and community development financial institutions, intending to reach minority and other underserved businesses. But similar to the first and second rounds of PPP loans, 78.6% of the total value of PPP loans have gone to small businesses that did not report the owner’s race or ethnicity. Of the loans that did report demographic data, 13.6% of the total value of loans went to self-reported white-owned small businesses, 2.9% went to Hispanic-owned businesses, 2.4% went to Asian-owned businesses, 0.8% went to Native-owned businesses, and 1.6% went to Black-owned businesses.

Ditch the Color-Blind Approach

In the highly inequitable society in which we live, a color-blind approach is an inequitable approach; those with privilege, power, and access receive a disproportionately larger share of the pie. As many others have pointed out, when it came time to access PPP loans, businesses that already had strong relationships with the lending banks were the most successful. America’s long history of systemic racism in banking fostered the resulting and foreseeable disparities in PPP loan distribution. The Biden Administration should be applauded for halting PPP loan applications for two weeks for all but the smallest of small business borrowers and for also making PPP loans available to self-employed individuals who are disproportionately people of color. Nevertheless, the Biden Administration and Senator Cardin, the new Chair of the Small Business & Entrepreneurship Committee, need to ditch the color-blind approach. Here are some proposals to stem the PPP’s inequities and reach Black-owned business owners:

Require Demographic Data on Race for Applicants & Loan Forgiveness

As a May 2020 report of the SBA inspector general recommended, the SBA should require lenders to collect demographic data from PPP applicants, including race. Loans without such data should be returned for correction and re-application with the necessary racial demographic data. The SBA inspector general also recommended that the SBA request, but not require, demographic data from PPP borrowers when they apply for loan forgiveness. Given the racial equity failures of the PPP rounds, the SBA should require demographic data of PPP borrowers. We will then get a clearer picture of which small businesses benefitted from the program. The SBA can then use that data to prioritize loan forgiveness in underserved markets, as was originally intended under the CARES Act.

Prioritize Socially and Economically Disadvantaged Businesses for Loan Forgiveness

The CARES Act required the SBA to issue guidance to PPP lenders to prioritize loans to small businesses owned by socially and economically disadvantaged individuals, which includes Black-owned small businesses. As the SBA inspector general noted, the Trump Administration’s SBA never issued this guidance. The SBA should now rectify this problem by issuing such guidance but also by prioritizing the loan forgiveness applications of such small businesses. Black-owned small businesses need to know with certainty that their loans will be forgiven in order to start planning their recovery and next steps, whether that be renegotiating their rents with landlords, relocating to cheaper rental space, hiring new employees, or retooling their websites to grab greater shares of the online marketplace. That certainly will help Black-owned business weather the rest of the pandemic and choose to remain open rather than shutter their businesses or apply for bankruptcy. Process these loan forgiveness applications first and fast. The SBA should also issue an Interim Final Rule instituting a presumption of loan forgiveness for socially and economically disadvantaged borrowers as well as borrowers within low- and moderate-income neighborhoods who either have 10 or fewer employees or borrowed less than $250,000 (these borrowers meet the third-round PPP criteria for certain set-asides).

Improve Long-Term Equitable Lending Infrastructure

In the longer term, the SBA should improve its lending infrastructure by (1) requiring diversity, equity, and inclusion (DEI) training for loan officers in banks that participate in SBA lending programs, and (2) targeting its outreach and lending programs to counties and neighborhoods where data shows the largest declines in Black-owned businesses.

President Biden reversed Former President Trump’s executive order banning federal agencies, contractors, and grant recipients from conducting DEI training. Now is the time for proactive steps to confront white supremacy within American institutions. The SBA should require any bank that participates in SBA programs, including future PPP loans, to adopt a DECI training plan. Loan officers who have not undergone DEI training should not be allowed to process and distribute SBA loans. DECI training is not a panacea, but loan officers need to understand the depths of structural racism and the role that financial institutions play in contributing to the racial economic disparities and the black-white wealth gap.

The third-round PPP uses community banks, credit unions, and CDFIs as proxies for racial and geographic diversity for its lending programs. The SBA should also use Federal Reserve data to map where Black-owned businesses have declined and overlap it with CDC data on communities where Covid-19 has hit the hardest. Then publish that data to lenders who participate in SBA lending programs. In the wake of the Black Lives Matter movement, large commercial banks have committed to helping Black communities. The Biden Administration should help hold them to their commitments through financial partnerships that target future small business lending and investments to Black communities.

Alicia Plerhoples is Professor of Law and Director of the Social Enterprise & Nonprofit Law Clinic at Georgetown Law. She also serves at the Faculty Advisor for the ACS Student Chapter at Georgetown Law. Follow her on Twitter or connect with her on LinkedIn.