Gottheimer, Sherrill Lead Entire New Jersey House Delegation Call for Cost-of-Living Adjustments to Future Coronavirus Stimulus Funds

CARES Act checks heading to NJ residents won’t go as far to help middle-class residents & small business owners as other lower-cost states

GLEN ROCK, NJ – On April 10, 2020, U.S. Representatives Josh Gottheimer (NJ-5) and Mikie Sherrill (NJ-11) led all of New Jersey’s House delegation to urge Congressional leadership, as further negotiations for coronavirus relief packages take place, to make regional cost-of-living adjustments to stimulus funds to Americans and businesses. Cost-of-living adjustments were not included in the initial wave of direct payments from the CARES Act and including adjustments in future legislation will both help ensure that middle-class residents and small business owners in higher-cost states like New Jersey are not erroneously excluded from needed assistance and do more to support local economies in those higher-cost regions.

In lower-cost states like Mississippi or Arkansas, the same $1,200 checks that New Jersey residents will receive from the CARES Act in the coming weeks have the equivalent spending power of $1,670 and $1,605, respectively, based on data provided by the U.S. Bureau of Economic Analysis and a study recently published by the St. Louis Federal Reserve.

“The facts are clear: this health-related economic slowdown threatens the ability of New Jersey residents to pay for their housing, afford food, or purchase necessary products to protect their health during the pandemic. They must be provided with the same functional assistance all Americans deserve,” the Members wrote in a letter to Speaker of the House Nancy Pelosi and House Minority Leader Kevin McCarthy this week.

Regarding making cost-of-living adjustments in future relief packages, the Members added, “Doing so would help ensure that New Jersey residents, and other hard-working middle-class Americans and small business owners who live in high-cost states, are not excluded from needed assistance.”

According to a poll published by the Financial Times on April 7th, the negative economic impact of the COVID-19 pandemic is affecting more than 70% of Americans of all income levels.

From March 22nd to 28th, 206,253 New Jersey residents applied for unemployment insurance — compared to 6,894 unemployment insurance applications in the same period in 2019.

Middle-class salaries in New Jersey are often higher than those in lower-cost states. The median New Jersey household income is $79,363, according to the Census Bureau, which is above the phase-out level for individual tax filers receiving a CARES Act relief check. These higher median incomes do nothing to mitigate the devastation the COVID-19 pandemic is having on the 8.9 million residents and 861,373 small businesses that call New Jersey home.

New Jersey also has the unfortunate ranking of the second largest coronavirus outbreak by total number of cases — second only to New York.

A copy of the letter is available HERE, the text of which is provided below.

The Honorable Nancy Pelosi The Honorable Kevin McCarthy

Speaker of the House Republican Leader

H-232, U.S. Capitol H-204, U.S. Capitol

Washington, D.C. 20515 Washington, D.C. 20515

Dear Speaker Pelosi and Minority Leader McCarthy:

As you negotiate further legislative packages to assist our communities impacted by the novel Coronavirus (COVID-19) pandemic, we continue to request that cost of living (COL) adjustments for localities are made when considering further economic stimulus payments to residents and businesses. Although a COL adjustment was not included as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law by President Trump on March 27th, 2020, there is a greater need than ever for these COL adjustments to be made. Doing so would help ensure that New Jersey residents, and other hard-working middle-class Americans and small business owners who live in high-cost states, are not excluded from needed assistance.

The direct payments to middle-class Americans included in the CARES Act will provide much needed financial relief to our constituents in the coming weeks. However, in places such as in Mississippi or Arkansas, the same $1,200 checks that New Jersey residents will receive have the equivalent spending power of $1,670 and $1,605, respectively, based on data provided by the U.S. Bureau of Economic Analysis and a study recently published by the St. Louis Federal Reserve. Salaries are also higher in New Jersey, where the median household income is $79,363 according to the Census Bureau, above the phase-out level for individual tax filers receiving a stimulus check. These higher salaries are required for middle-class families to live comfortably in New Jersey, but it does nothing to mitigate the devastation the COVID-19 pandemic is having on the 8.9 million Americans and 861,373 small businesses that call the state home.

According to a poll published by the Financial Times on April 7, 2020, the negative economic impact of the COVID-19 pandemic is affecting more than 70% of Americans of all income levels. From March 22nd to 28th, 2020, 206,253 New Jersey residents applied for unemployment insurance, compared to 6,894 unemployment insurance applications in the same period of 2019. The facts are clear: this health-related economic slowdown threatens the ability of New Jersey residents to pay for their housing, afford food, or purchase necessary products to protect their health during the pandemic. They must be provided with the same functional assistance all Americans deserve.

We look forward to working with you further on this important matter and urge you to utilize all tools available to assist our local communities.

Sincerely,

MEMBERS OF CONGRESS

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