State Senate President Steve Sweeney called on the federal government to implement a two-month moratorium on mortgage, home equity, loan, utility and insurance payments due to the coronavirus crisis and accompanying financial downturn.
Sweeney (D-West Deptford) also said the U.S. government should cover the state share of Medicaid costs, supplement state Unemployment Insurance funds, cover municipal debt shortfalls and pay for laptops for school students. In return, states would agree to freeze spending on new programs unrelated to the coronavirus crisis.
“Economic lockdowns in New Jersey, New York, Pennsylvania and other states are rightfully keeping people in their homes and closing down most small businesses in an effort to reduce the spread of the deadly coronavirus,” Sweeney said in a prepared statement. “Tens of millions of Americans will not be collecting paychecks, and businesses will not be making sales, but monthly bills are still due.
“If we are going to keep this partial economic shutdown from turning into a long-term recession, the federal government needs to take decisive action to put a freeze on our largest recurring bills for at least two months, until we emerge from this unprecedented public health crisis. With the economy effectively taking a two-month pause, we need a two-month pause on fixed monthly bills, as well.”
Federal government leaders from both parties are working on possible measures to alleviate the financial pain of the COVID-19 fallout, ranging from bills working their way through both houses of Congress to Federal Reserve interest rate cuts to President Donald Trump taking action on legislation and delivering his own regular updates on the situation nationwide.
Sweeney suggested loans and other credit could be extended two months to reflect the frozen payments, with additional interest added at what he called a reasonable interest rate — no higher than 5%. Skipped payments for regular bills such as utilities could be spread over the subsequent payment year once any lockdown ends, he said.
“While this economic crisis is going to hurt everyone, including those who are still working and businesses that remain open, the federal government could limit the program, if financially necessary, to individuals and small businesses that are losing a significant portion of their income during this period,” Sweeney said.
His plan would include:
- Mortgage and home-equity loan payments for individuals;
- Bank loans, mortgage payments and lines of credit for small businesses;
- Utility, cell phone, telephone and internet bills;
- Auto and college loans, including college loans held by private lenders;
- Health, home and auto insurance premiums.
Sweeney also said a plan could be developed for renters.
“While Congress and the president are already moving on a $2 trillion package this week, we recognize that this is just the first step in providing the federal support our people and our businesses will need to come out of this crisis without a long recession,” he said. “It’s only right to require states not to spend beyond their budgets for any new programs not related to the pandemic.
“This crisis is putting our communities, businesses and institutions to the test. We need to rise to the challenge and take these comprehensive steps to maintain a sense of order, security and confidence that this crisis will pass, and we will come out stronger on the other side.”