As a result of the COVID-19 pandemic, millions of Americans have fallen into poverty. Over ten million are unemployed, and parents are having to choose between paying rent and feeding their children. Among the myriad questions in the wake of the COVID-19 is how should the United States should help people to meet their basic needs during a crisis of this magnitude. Our chapter attempts to provide an answer. In doing so, our chapter makes three contributions. First, it summarizes how Congress and federal agencies responded to the COVID-19 pandemic with various changes to safety net programs. Second, this chapter enters a scholarly conversation that reaches beyond welfare programs. In recent years, legal academics have drawn attention to the sclerotic nature of national lawmaking. Our chapter joins this ongoing conversation by applying those insights to the specific context of the safety net. Specifically, it suggests that, given the challenges associated with Congress acting quickly to alter safety net programs in the midst of national emergencies such as the COVID-19 pandemic, Congress should now focus on legislating mechanisms, such as automatic stabilizers, that would make these programs more responsive. Third, the chapter moves from the conceptual back to the practical, outlining how Congress could enact these automatic stabilizers in the tax code, the Social Security Act, the Food Stamp Act, and the Medicaid Act.

Fiscal policy aims at stabilizing an economy through government management of spending and taxes to influence aggregate demand. Fiscal policy works through both automatic stabilizers, based on countercyclical responses of spending and taxation to income fluctuations, and active management, particularly in response to severe negative shocks. Fiscal stimulus is most effective under conditions of either a fixed exchange rate combined with high capital mobility or a floating exchange rate combined with low capital mobility. Use of activist fiscal policy is limited by cumbersome decision-making processes, the countervailing effects of government borrowing on interest and exchange rates, and debt sustainability constraints. Space to run a primary fiscal deficit while holding the debt ratio constant is greater the lower the interest rate and the higher the GDP growth rate. Debt-to-GDP ratios vary greatly across Emerging East Asia, and with that so does capacity to respond to crisis. After running deficits that exceeded the sustainbility threshold for some years, Vietnam managed to put government finances on a sounder footing by the late 2010s.